On October 30, 2025, the Government of Canada announced contribution rates, maximums and exemptions for both Canada Pension Plan (CPP) and Employment Insurance (EI) for the 2026 calendar year.
The changes in how CPP is treated on a personal tax return (which began in 2019) mean that of the $3,519.45 of normal max contribution, $711.00 will be deductible on the T1 (rather than being a tax credit). This amount reflects the annual increase that began in 2019 – so the 4.95% rate that was in place in 2018 is still applicable as a credit, and the excess is deductible.
Additionally, as of 2024, there is a “CPP2” rate of 4% applied on the amount of earnings above the max earnings and below the CPP2 max earnings – effectively another 4% on that $10,400 gap. The CPP2 contributions by an employee are deductible, rather than being a credit – so someone with over $85,000 of earnings will contribute $4,646.45, of which a total of $1,127.00 will be deductible.
2026 CPP Contributions:
- CPP1 max earnings – $74,600
- CPP2 max earnings – $85,000
- Exemption – $3,500
- Max contribution – $4,230.45 CPP1, $4,646.45 CPP2 included
- CPP Rate – 5.95% on CPP1; 4.00% on CPP2; employer’s portion matches dollar for dollar
2026 EI Contributions:
- Max earnings – $68,900
- Max contribution – $1,123.07
- EI Rate – 1.63%
- Employer’s portion – 1.4 times employee portion
