The 2026 employee CPP rate is 5.95% on pensionable earnings between the $3,500 basic exemption and the $74,600 Year's Maximum Pensionable Earnings (YMPE). Employers match this rate dollar-for-dollar. On earnings between $74,600 and the $85,000 Year's Additional Maximum Pensionable Earnings (YAMPE), CPP2 applies at 4% for both employee and employer.

The 2026 employee EI premium rate is 1.63% on insurable earnings up to the $68,900 Maximum Insurable Earnings (MIE). Employers pay 1.4 times the employee rate, which works out to 2.282%. Quebec employees pay a reduced EI rate of 1.30% because Quebec's QPIP program covers parental insurance separately.

CPP2 is the second-tier CPP contribution that applies on earnings between the YMPE ($74,600) and YAMPE ($85,000) for 2026. The rate is 4% for both employee and employer. CPP2 was phased in starting January 2024 as part of the CPP enhancement. On earnings up to YMPE, only the original 5.95% CPP rate applies; CPP2 starts above YMPE.

Yes, but at a reduced rate. Quebec employees pay 1.30% EI in 2026 instead of the 1.63% rate that applies in the rest of Canada. The reduction reflects Quebec's separate QPIP (Quebec Parental Insurance Plan) program, which provides maternity, paternity, and parental benefits funded by a separate employee premium of 0.430%.

The $3,500 basic exemption is applied annually, not per pay period. For each employee, you exempt the first $3,500 of pensionable earnings in the year from CPP contributions. In practice, payroll systems prorate this exemption across pay periods. Workzoom's payroll engine handles this automatically across every pay frequency.

CPP (Canada Pension Plan) funds retirement, disability, and survivor benefits. EI (Employment Insurance) funds unemployment benefits, sickness benefits, maternity/parental leave, and compassionate care leave. Both are mandatory federal deductions. CPP is contributed by both employee and employer at matching rates. EI is contributed by employees at 1.63% and employers at 1.4× that rate.