CPP and EI Contribution Limits Rise in 2026: What Higher Earners Will Pay
Canadian workers earning above $74,600 will pay higher Canada Pension Plan contributions in 2026, while EI maximum premiums also increase. A second CPP tier (CPP2) applies to mid-high earners, adding 4% on earnings between $74,600 and $85,000.
Effective January 1, 2026, Canadian payroll deductions changed. While contribution rates remain stable, higher maximum earning thresholds mean workers earning above certain levels pay more into CPP and EI.
CPP Changes
- Base CPP rate stays at 5.95% for both employees and employers, but maximum pensionable earnings (YMPE) rose from $71,300 to $74,600.
- Second tier (CPP2) for higher earners: Earnings between $74,600 and $85,000 are now subject to an additional 4% contribution. Maximum CPP2 contribution per year is $416 for each of employee and employer.
- Self-employed pay both portions: Combined 11.9% on base earnings, plus 8% on the CPP2 range, totaling maximum contributions of $4,646.45 (base $4,230.45 + CPP2 $416).
EI Changes
- EI rate decreased slightly from 1.64% to 1.63% for employees, but maximum insurable earnings rose from $65,700 to $68,900.
- Employee maximum premium: $1,123.07 (1.63% of $68,900).
- Employer maximum premium: $1,572.30 (2.28% of $68,900).
Higher earners will notice their take-home pay affected mid-year when contributions hit the annual ceiling and deductions stop. Self-employed individuals and those with multiple jobs should update their payroll systems to ensure correct remittances. Expats and newcomers with Canadian employment should verify their employer is withholding correctly—if unsure, contact the CRA or consult a Canadian tax professional.
Sources
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