CPP, EI and payroll deductions in Canada for 2026
For 2026, employers and employees each pay CPP at 5.95% on earnings between $3,500 and $74,600 (up to $4,230.45 each), plus CPP2 at 4% on earnings from $74,600 to $85,000 (up to $416 each). EI is 1.63% for employees up to $68,900 of insurable earnings, with employers paying 1.4 times that.
New payroll figures for 2026
What happened
The 2026 figures for the Canada Pension Plan (CPP) and Employment Insurance (EI) took effect on 1 January 2026. The CPP rate stays at 5.95%, but the earnings it applies to went up to $74,600. The EI rate for employees dropped to 1.63%.
What it means for you
Higher earners pay more CPP because the ceiling rose, and there is a second, smaller CPP contribution on pay between $74,600 and $85,000. Employers match CPP and pay 1.4 times the employee's EI. Quebec has its own pension and parental insurance plans.
Dates to know
- 15th of each monthMost employers must send the month's deductions to the Canada Revenue Agency by the 15th of the next month.
- Last day of February 2027T4 slips for 2026 pay must be filed and given to employees.
Source: Canada Revenue Agency. We check this page every week. Last checked .
Every Canadian employer must deduct and remit income tax, pension contributions and Employment Insurance premiums from employees' pay, and add its own employer share. Outside Quebec, the pension deduction is the Canada Pension Plan (CPP). For 2026, CPP is 5.95% each for employer and employee on earnings between the $3,500 basic exemption and the year's maximum pensionable earnings (YMPE) of $74,600, a maximum of $4,230.45 each. A second additional contribution (CPP2) of 4% each applies on earnings between $74,600 and the year's additional maximum pensionable earnings (YAMPE) of $85,000, a maximum of $416 each. EI premiums for 2026 are 1.63% of insurable earnings up to $68,900 for employees (a maximum of $1,123.07), and the employer pays 1.4 times the employee premium (a maximum of $1,572.30). In Quebec, employers deduct Quebec Pension Plan (QPP) contributions instead of CPP, at 6.30% each for 2026 on the same $74,600 ceiling, plus a 4% second additional contribution to $85,000, and Quebec Parental Insurance Plan (QPIP) premiums, while EI drops to 1.30% for employees. Separately, several provinces charge employers a payroll tax: Ontario and British Columbia through an employer health tax on payroll above a $1 million exemption, and Quebec, Manitoba and Newfoundland and Labrador through their own levies.
What are the 2026 CPP rates and maximums?
5.95% each for employee and employer on earnings between $3,500 and $74,600, up to $4,230.45 each. On earnings between $74,600 and $85,000, a second additional contribution (CPP2) of 4% each applies, up to $416 each.
The 5.95% rate is unchanged from 2025; the ceiling rose from $71,300. CPP2 started in 2024 and covers a band of earnings above the first ceiling. Once an employee reaches the annual maximum, the employer stops deducting and stops paying its matching share for the rest of the year.
What are the 2026 EI rates and maximums?
Employees pay 1.63% of insurable earnings up to $68,900, a maximum of $1,123.07. The employer pays 1.4 times the employee premium, a maximum of $1,572.30 per employee.
The 2026 employee rate is down from 1.64% in 2025, and maximum insurable earnings rose from $65,700. Quebec employees pay a lower EI rate, 1.30% for 2026 (maximum $895.70, employer maximum $1,253.98), because Quebec runs its own parental insurance plan.
How is payroll different in Quebec?
Quebec employers deduct Quebec Pension Plan (QPP) contributions instead of CPP and also deduct Quebec Parental Insurance Plan (QPIP) premiums, with a reduced EI rate. For 2026 the QPP rate is 6.30% each on earnings between $3,500 and $74,600, a maximum of $4,479.30 each.
The QPP rate combines a 5.3% base rate and a 1% first additional rate. A second additional QPP contribution of 4% each applies on earnings between $74,600 and $85,000, up to $416 each. QPIP premiums for 2026 are 0.430% for employees and 0.602% for employers on earnings up to $103,000 (maximums of $442.90 and $620.06). Quebec deductions are remitted to Revenu Quebec, not the Canada Revenue Agency.
When must payroll deductions be sent to the CRA?
It depends on the employer's average monthly withholding amount from two years earlier. Most employers are regular remitters and must make sure deductions reach the CRA by the 15th of the month after the month they paid employees.
Small employers with a perfect compliance record and an average monthly withholding under $3,000 can remit quarterly. Employers with an average of $25,000 to $99,999.99 are accelerated threshold 1 remitters, and those at $100,000 or more are accelerated threshold 2 remitters, with more frequent due dates.
When are T4 slips due?
On or before the last day of February after the calendar year the slips cover, so 2026 slips are due by the end of February 2027. If that day falls on a weekend, the return is due the next business day.
The same deadline applies to filing the T4 return with the CRA and to giving each employee their slip.
Do employers pay a provincial payroll tax?
In several provinces, yes. Ontario and British Columbia charge an employer health tax, and Quebec, Manitoba and Newfoundland and Labrador have their own employer payroll levies. Ontario charges 0.98% to 1.95% of total Ontario payroll, with a $1 million exemption for eligible employers whose Ontario payroll is under $5 million. British Columbia exempts payroll of $1,000,000 or less, charges 5.85% on the amount over $1,000,000 up to $1,500,000, and 1.95% on total payroll above $1,500,000.
In Ontario the rate depends on total payroll before the exemption, rising from 0.98% on payroll up to $200,000 to 1.95% on payroll over $400,000. Ontario's exemption is scheduled for its next inflation adjustment on 1 January 2029.
Hiring in Canada?
What Teamed handles for you on Canadian payroll
Canadian payroll is several separate calculations that each stop at a different ceiling and go to a different agency, and as the legal employer Teamed runs all of them, so the deductions, the employer contributions, the remittances and the year-end slips arrive correctly and on time.
These sit with us
- CPP and CPP2 deducted and matched up to each 2026 ceiling
- EI premiums at the employee rate and the employer's 1.4 times share
- QPP, QPIP and the reduced EI rate for employees in Quebec
- Remittances to the CRA or Revenu Quebec by each due date
- T4 slips filed and issued by the end of February
You keep
The salary decision, the budget and the day-to-day management of your people. We carry the payroll duties that come with being the legal employer.
The ceilings change every 1 January, and the deduction for a given employee stops mid-year once a maximum is reached, which is where manual payroll tends to over- or under-deduct.
Key figures
| Detail | Value |
|---|---|
| CPP, 2026 | Maximum pensionable earnings (YMPE) $74,600; basic exemption $3,500; employee and employer rate 5.95% each; maximum annual employee and employer contribution $4,230.45 each. 2025 comparison: YMPE $71,300, maximum $4,034.10. (source) |
| CPP2, 2026 | Additional maximum pensionable earnings (YAMPE) $85,000; rate 4% each for employee and employer on earnings between $74,600 and $85,000; maximum annual employee and employer contribution $416 each. (source) |
| EI, 2026 (outside Quebec) | Maximum annual insurable earnings $68,900; employee rate 1.63%; maximum employee premium $1,123.07; employer pays 1.4 times the employee premium, maximum $1,572.30. 2025 comparison: $65,700 and 1.64%. (source) |
| EI, 2026 (Quebec) | Maximum annual insurable earnings $68,900; employee rate 1.30%; maximum employee premium $895.70; maximum employer premium $1,253.98. (source) |
| QPP, 2026 | Maximum pensionable earnings $74,600; basic exemption $3,500; contribution rate 6.30% (5.3% base plus 1% first additional); maximum employee and employer contribution $4,479.30 each. Second additional contribution: 4% each on earnings between $74,600 and $85,000, maximum $416 each. (source) |
| QPIP, 2026 | Maximum insurable earnings $103,000; employee rate 0.430% (maximum $442.90); employer rate 0.602% (maximum $620.06). (source) |
| Remitter types | Based on average monthly withholding amount (AMWA) from 2 calendar years earlier: quarterly (small employers under $3,000 with a perfect compliance record), regular (under $25,000, due by the 15th of the following month), accelerated threshold 1 ($25,000 to $99,999.99), accelerated threshold 2 ($100,000 or more). (source) |
| T4 deadline | The T4 filing due date is the last day of February after the calendar year the return covers; a return due on a weekend is due the next business day. (source) |
| Ontario employer health tax | Rates from 0.98% (total Ontario remuneration up to $200,000) to 1.95% (over $400,000). Exemption $1 million for eligible employers whose Ontario payroll, including associated employers, is under $5 million; next inflation adjustment scheduled for 1 January 2029. (source) |
| British Columbia employer health tax | B.C. remuneration of $1,000,000 or less is exempt. Between $1,000,000.01 and $1,500,000, tax is 5.85% of the amount over $1,000,000. Above $1,500,000, tax is 1.95% of total B.C. remuneration. These thresholds apply from the 2024 return onward. (source) |
Frequently asked questions
Did the CPP rate change for 2026?
No. The CPP rate stays at 5.95% each for employee and employer, and the CPP2 rate stays at 4%. What changed is the earnings ceilings: $74,600 for CPP and $85,000 for CPP2 in 2026.
How much EI does an employer pay?
1.4 times the employee premium. For 2026 outside Quebec, that is up to $1,572.30 per employee, against an employee maximum of $1,123.07.
Why is Quebec different?
Quebec runs its own pension plan (QPP) and parental insurance plan (QPIP). Employers there deduct QPP instead of CPP, add QPIP premiums, and use a lower EI rate, 1.30% for employees in 2026.
When are 2026 T4 slips due?
By the last day of February 2027, or the next business day if that day falls on a weekend. The slips must be filed with the CRA and given to employees by that date.
Canada has fourteen sets of employment standards, one federal and one for each province and territory. When Teamed is your legal employer, we apply the right one for where each person works and update your contracts, policies and payroll as the law changes, so you never have to read a statute to stay compliant.
