Canada Pension Plan and Employment Insurance Rates in 2026

Canada Pension Plan (CPP) – 2026

Contribution Basics

CPP contributions are mandatory for most employed and self-employed individuals
aged 18–70 who earn more than the minimum exemption amount. Contributions help
fund retirement pensions, disability benefits, and survivor benefits.

2026 CPP Rates & Limits

Year’s Maximum Pensionable Earnings (YMPE)	$74,600
Basic Exemption Amount	$3,500
Contribution Rate (employee & employer)	5.95%
Maximum Employee Contribution (CPP-base)	$4,230.45
Self-employed Rate (both halves)	11.9%
Self-employed Maximum Contribution	$8,460.90

CPP contributions are calculated on earnings above the basic $3,500 exemption up to
the YMPE.

CPP Enhancement (CPP2)

Since 2024, an enhanced CPP component (CPP2) applies to higher-income Canadians.
For 2026:

• Pensionable earnings between $74,600 and $85,000 are subject to additional CPP contributions.
• The CPP2 rate for employees and employers is 4.00%.
• This creates an extra maximum contribution of $416.00 per employee (and employer) once earnings exceed the YMPE up to $85,000.
• Self-employed individuals pay both portions (8.00% on the same range).

Employment Insurance (EI) – 2026

EI premiums are deducted from employee paychecks to fund temporary income support
during job loss, maternity/parental leave, and other qualifying events.

2026 EI Rates & Limits (Federal)

Maximum Insurable Earnings	$68,900
Employee Premium Rate	1.63%
Maximum Employee EI Premium	$1,123.07
Employer Premium Rate (1.4×)	2.28%
Maximum Employer EI Premium	$1,572.30

EI rates are automatically indexed each year based on changes in average wages and
the financial needs of the EI system.

What This Means for Employers & Employees

Employers

• Must withhold CPP and EI from employee paychecks using 2026 thresholds.
• Must match CPP contributions dollar-for-dollar (base + CPP2) and remit EI employer premiums at 1.4× the employee rate.

Employees

• Contributions increase slightly in 2026 compared to prior years because of higher income thresholds (YMPE and EI maximum).
• Self-employed individuals are responsible for both employee and employer portions of CPP and CPP2.

Need Help With Payroll or Tax Planning?

If you handle payroll, HR, accounting or run a small business, it’s important to update
your systems each year to reflect these thresholds so your deductions and remittances
are compliant and accurate.

Our accountants and tax experts at TAAG can assist - whether you need payroll setup,
year-end reporting, or tax planning support. Contact us today, either online or by calling
our office at 613-234-6006.