2026 CPP and EI Payroll Changes: Higher Contribution Limits Despite Lower EI Rates
Canadian workers and employers face updated CPP and EI thresholds for 2026, with CPP maximum pensionable earnings rising to $74,600 and a new CPP2 tier kicking in at higher earners, while EI rates edge down slightly.
What Changed on Your Paycheque
Effective January 1, 2026, Canadian workers see increased deductions from their paycheques as CPP maximum pensionable earnings rise and EI maximum insurable earnings increase. While the CPP contribution rate remains at 5.95%, higher maximums mean workers earning above certain thresholds will pay more.
CPP Updates
For CPP, the 2026 Year's Maximum Pensionable Earnings (YMPE) is $74,600 with a $3,500 basic exemption. The base employee/employer rate remains 5.95%, with a maximum annual contribution of $4,230.45 each. Pensionable earnings between $74,600 and $85,000 are subject to additional CPP2 contributions, creating an extra maximum contribution of $416.00 per employee once earnings exceed the YMPE up to $85,000.
EI Updates
Employee EI rate decreases from $1.64 to $1.63 per $100 of insurable earnings (employers pay 1.4x this rate). Maximum insurable earnings rise by $3,200 (4.9% increase), increasing maximum EI premiums despite the rate decrease.
For expat workers: These changes affect all employees working in Canada. If you are on a work permit earning above $74,600, you will contribute more to both CPP and CPP2, which increases your retirement pension. Keep payslips showing these deductions for your tax return. The timing of when you max out CPP contributions (usually mid-to-late year) will affect your take-home pay—once you hit the maximum, those deductions stop.
Sources
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