CPP and EI for 2026: What Employers Need to Know

If you run payroll, CPP and EI rates and maximums change most years, and 2026 is no different. Here are the numbers and what they mean for your payroll costs.

CPP has two tiers now

Since 2024, CPP has had a second, “enhanced” tier (often called CPP2) on top of the base contribution. A lot of small employers find this confusing, so here’s how it breaks down for 2026:

• Base CPP (CPP1): 5.95% on earnings between $3,500 and $74,600, up to a maximum employee contribution of $4,230.45.
• Enhanced CPP (CPP2): 4.00% on earnings between $74,600 and $85,000, up to a maximum employee contribution of $416.00.
• Combined CPP maximum per employee: $4,646.45.

As the employer, you match the employee’s CPP contribution dollar for dollar. Budget for both sides, not just the amount on the employee’s pay stub.

EI

• Employee rate: $1.63 per $100 of insurable earnings.
• Maximum insurable earnings: $68,900.
• Maximum employee EI contribution: $1,123.07.
• Employer rate: 1.4 times the employee rate.

What this means for your budget

Once an employee earns more than the CPP2 threshold ($74,600) or the EI maximum insurable earnings ($68,900), the deductions on any extra pay change. Payroll software takes care of that, but it’s still worth knowing what it’s doing and why, especially when you’re working out the total cost of a new hire. There’s a free calculator for that on the resources page.

Summary

• CPP2 is separate from base CPP, so budget for both tiers.
• With your CPP match plus EI at 1.4 times the employee rate, an employee costs you noticeably more than their gross wages.
• These numbers change most years. Redo your estimate every year instead of carrying last year’s numbers forward.

CPP and EI rates and maximums are set by the federal government and change most years. These are the rates in effect as of the update date above. Check the current figures before you rely on them for payroll.