CPP, in plain English.

$3,361.75. That is exactly what an employee earning $60,000 contributes to the Canada Pension Plan in 2026, and their employer matches every cent. Most people see a single payroll deduction. Two separate programs are running underneath it.

What CPP is.

Every dollar an employee contributes to CPP, their employer matches. That is the design. The Canada Revenue Agency administers the plan, and in 2026 the contribution rate for both sides sits at 5.95 percent on pensionable earnings between the basic exemption of $3,500 and the Year's Maximum Pensionable Earnings of $74,600.

That $3,500 basic exemption is not a rounding line. Pensionable earnings begin above it, so the calculation base is always gross earnings minus $3,500, not gross earnings alone.

CPP2 applies above the YMPE.

CPP2 is not just a renamed version of CPP. It is a separate tier with a separate rate and a separate ceiling your payroll engine has to calculate on its own.

For 2026, CPP2 applies at 4 percent on earnings between $74,600 and the Year's Additional Maximum Pensionable Earnings (YAMPE) of $85,000. The employee contributes 4 percent on that band, and the employer matches it. Above $85,000, no further contribution applies in either tier.

Employees who earn below $74,600 never touch CPP2. The second tier only opens once base CPP hits its ceiling.

How the math works.

An employee earning $60,000 in 2026. Pensionable earnings: $60,000 minus $3,500 equals $56,500. Multiply by 5.95 percent. The annual CPP contribution is $3,361.75. Their employer contributes the same amount.

No CPP2 applies here. $60,000 does not exceed the $74,600 YMPE, so the second tier never opens for this employee.

How CPP is remitted.

CPP contributions go to the Canada Revenue Agency on the PD7A. Both the employee contributions withheld and the employer's matching amount run through the same form.

Mistakes that show up in audits.

• Applying CPP to the full gross earnings. The $3,500 basic exemption reduces the calculation base on every pay period. Systems that skip this step over-withhold from employees and over-remit to CRA all year.
• Calculating CPP2 at the base rate of 5.95 percent. CPP2 runs at 4 percent, not 5.95 percent. Applying the wrong rate over-deducts from employees earning between $74,600 and $85,000 and misrepresents the employer's matching obligation.
• Booking only the employee deduction and missing the employer match. CPP is not a withholding exercise. Every dollar the employee contributes requires a dollar from the employer. Payroll cost models that capture only the employee side understate labour cost on every pay run.
• Not calculating CPP2 at all. CPP2 is a permanent part of Canadian payroll. Platforms not updated to handle the second tier silently under-deduct from higher earners and short-remit to CRA, with no error message to flag the gap.

How Workzoom runs it.

Since 2001, Workzoom has run Canadian payroll. Twenty-five years of CPP rate changes and PD7A remittances, handled inside one system.

Workzoom calculates CPP and CPP2 on every pay run and generates the PD7A for the employer to submit and remit to CRA. The math runs inside the same database that holds the employee record, the time data, and the HR file. One database means no export step between HR, time, and payroll. County of Renfrew, an Ontario municipality, and Silvera for Seniors both run their Canadian payroll on Workzoom.

Family-owned, founder still runs it.