CPP and EI Contribution Ceilings Rise; YMPE Climbs to $74,600

Effective January 1, 2026, Canadian workers earning above certain thresholds face increased deductions from their paycheques as the Canada Pension Plan (CPP) and Employment Insurance (EI) ceilings climb annually with average wage growth.

Key Changes

• CPP base: The Year's Maximum Pensionable Earnings (YMPE) rises from $71,300 to $74,600. The base employee contribution rate remains 5.95%, but the maximum annual contribution increases to $4,230.45 per employee.
• CPP2 enhanced tier: A second contribution tier (CPP2) applies to earnings between $74,600 and $85,000 at a 4 percent rate, creating an additional maximum of $416 per employee.
• EI insurable earnings: The maximum insurable earnings ceiling increases from $65,700 to $68,900. While the employee premium rate actually decreases slightly (from $1.64 to $1.63 per $100), the higher ceiling means workers earning above that threshold pay slightly more in total.
• Self-employed: Self-employed individuals pay both employee and employer portions, totalling 11.9 percent base CPP plus 8 percent for CPP2 on that upper earnings band.

The contribution limits reset every January 1 and are indexed annually based on Canadian average wage growth. These changes apply per employer, so workers with multiple jobs must track contributions separately to avoid overpayment.

For Foreign Workers and Expats

Work permit holders contributing to CPP and EI should expect higher deductions in 2026 if you earn over $74,600. Your employer remits these, but verify your pay stub reflects the new thresholds. If you worked in Canada in 2025 and earned $74,600 or more, your paycheques from mid-year onward will show CPP hitting its maximum earlier than in previous years. Non-resident workers pay a flat 25 percent withholding on RRSP withdrawals but contribute to CPP/EI the same as residents if employed.

Sources

• Virtus Group — 2026 CPP & EI Rates Updates
• RN Canada — CPP and EI Maximum Contributions 2026