CPP contributions

CPP contributions are Canada Pension Plan amounts taken from pay. For 2026, employees and employers each pay 5.95% of earnings from $3,500 up to $74,600.

Also called: Canada Pension Plan contributions, CPP deductions, CPP premiums, base CPP, first additional CPP

What CPP contributions means

Canada Pension Plan (CPP) contributions are the amounts that fund the public pension most working Canadians receive in retirement, along with CPP disability and survivor benefits. As an employer, you deduct the employee's share from each pay cheque, add an equal amount of your own, and send both to the Canada Revenue Agency (CRA).

CPP is one of the three main source deductions, with income tax and Employment Insurance (EI) premiums. It is your responsibility as the employer to deduct it correctly and remit it on time.

Employees who work in Quebec contribute to the Quebec Pension Plan (QPP) instead of CPP.

How it works

CPP applies to pensionable earnings between a basic exemption and a yearly ceiling called the year's maximum pensionable earnings (YMPE). For 2026, the basic exemption is $3,500, the YMPE is $74,600, and the maximum contributory earnings are $71,100. The employee rate is 5.95% and the employer rate is 5.95%.

That gives a 2026 maximum of $4,230.45 for the employee and $4,230.45 for the employer. Once an employee has contributed the maximum for the year with you, stop deducting CPP for the rest of the calendar year. Self-employed people pay both shares, up to $8,460.90 in 2026.

Earnings above the YMPE are not finished with CPP: a second layer, CPP2, applies to earnings between the YMPE and a higher ceiling. See the CPP2 entry.

You do not need to work out each pay by hand. The CRA's payroll deductions tables (T4032) and payroll software apply the exemption across pay periods. Report the year's total pensionable earnings and contributions on each employee's T4 slip. Age and a few other situations change whether CPP is deducted, so check the CRA's employer guide for very young or older employees.

Is it the same in every province?

CPP is a federal plan, and the rates and maximums are the same in every province and territory except Quebec, where employees contribute to the Quebec Pension Plan (QPP) instead. For 2027, the CRA has published a YMPE of $76,700 and says contribution rates stay the same from 2026 onward; check the CRA page for the 2027 maximum contributions.

Example: CPP for a full-time employee in 2026

Ahmed runs a 4-person sign shop in Brandon, Manitoba. His installer, Kim, earns $52,000.00 in 2026, all pensionable.

Kim's earnings above the $3,500 basic exemption are $48,500.00. At 5.95%, Kim contributes $2,885.75 for the year, and Ahmed's business contributes the same $2,885.75. Kim earns less than the YMPE, so no CPP2 applies. Ahmed's payroll software spreads this across Kim's 26 biweekly pays.

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Questions about CPP contributions

What is the CPP rate for 2026?

5.95% for employees and 5.95% for employers, on pensionable earnings between $3,500 and $74,600. The maximum is $4,230.45 each.

Do employers match CPP contributions?

Yes. You pay an amount equal to the employee's CPP contribution and remit both to the CRA.

What happens when an employee reaches the CPP maximum?

Stop deducting base CPP for the rest of the calendar year. CPP2 may still apply to earnings above the YMPE until its own maximum is reached.

Official sources

General information for Canadian employers, not legal advice. Rules differ by province and territory and change over time, so check with your provincial employment standards office (or the federal Labour Program if you are federally regulated) before you rely on it. See employment standards by province.

Checked against official sources on 4 November 2026.