CPP and EI Payroll Deductions Increase in 2026; Maximums Hit $4,646 CPP, $1,123 EI
Starting January 1, 2026, Canada Pension Plan and Employment Insurance deductions rise with higher earnings thresholds. CPP maximum pensionable earnings increase to $74,600, and a second tier (CPP2) of 4% applies to earnings up to $85,000. EI maximum insurable earnings rise to $68,900.
Every employed person and self-employed individual in Canada will see changes to mandatory payroll deductions starting January 1, 2026. Here's what affects your paycheque and retirement savings.
Canada Pension Plan (CPP) Changes
Effective January 1, 2026, Canadian workers will 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.
For 2026, regular CPP contributions apply to pensionable earnings up to the Year's Maximum Pensionable Earnings (YMPE) of $74,600. CPP2 then applies to pensionable earnings between the YMPE of $74,600 and the Year's Additional Maximum Pensionable Earnings (YAMPE) of $85,000. In 2026 it applies 4% to the portion of earnings between the first ceiling ($74,600.00) and the second ceiling ($85,000.00), for a maximum of $416.00.
Employment Insurance (EI) Updates
EI premiums actually decrease slightly (from $1.64 to $1.63 per $100), but the maximum insurable earnings increase from $65,700 to $68,900, resulting in higher maximum premiums. EI premiums are calculated only on earnings up to $68,900. Once an employee's earnings exceed this amount within the year, EI deductions stop for the remainder of the year.
What This Means for You
Once your combined base CPP and CPP2 contributions reach $4,646.45, CPP deductions stop for the rest of 2026. EI premiums stop separately once they reach $1,123.07. Higher earners will hit these ceilings earlier in the year, meaning larger net income in later paycheques.
If you're self-employed, you pay both the employee and employer share of CPP, a combined rate of 11.9% instead of the 5.95% paid by salaried employees. That means your maximum CPP contribution for 2026 is $8,460.90, roughly double what an employee pays. Newcomers and expats: ensure your employer has your correct SIN to avoid processing delays on CPP/EI deductions. If you worked multiple jobs in 2025, you may have overpaid CPP or EI; claim the credit on your 2025 tax return.
Sources
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