CPP & EI Calculator 2026: Complete Canadian Deductions Guide

2026 CPP & EI Rates at a Glance

Understanding Canada Pension Plan (CPP) and Employment Insurance (EI) contributions is essential for accurate payroll. Here are the 2026 rates:

CPP 2026 Rates

| Description | 2026 Amount | |-------------|-------------| | Contribution Rate | 5.95% | | Maximum Pensionable Earnings | $71,300 | | Basic Exemption | $3,500 | | Maximum Employee Contribution | $4,034.10 | | Maximum Employer Contribution | $4,034.10 |

QPP 2026 Rates (Quebec)

| Description | 2026 Amount | |-------------|-------------| | Contribution Rate | 6.40% | | Maximum Pensionable Earnings | $71,300 | | Basic Exemption | $3,500 | | Maximum Employee Contribution | $4,339.20 |

EI 2026 Rates

| Description | Outside Quebec | Quebec | |-------------|----------------|--------| | Employee Rate | 1.64% | 1.32% | | Maximum Insurable Earnings | $65,700 | $65,700 | | Maximum Employee Premium | $1,077.48 | $867.24 | | Employer Rate | 2.296% | 1.848% |

How to Calculate CPP Contributions

Step 1: Determine Pensionable Earnings

Pensionable earnings include:

• Salary and wages
• Bonuses and commissions
• Vacation pay
• Taxable benefits

Step 2: Apply the Basic Exemption

The basic exemption is $3,500 annually. For each pay period:

• Weekly: $67.31
• Bi-weekly: $134.62
• Semi-monthly: $145.83
• Monthly: $291.67

Step 3: Calculate the Contribution

CPP = (Gross Pay - Period Exemption) × 5.95%

Example Calculation

For a bi-weekly pay of $2,500:

CPP = ($2,500 - $134.62) × 5.95%
CPP = $2,365.38 × 0.0595
CPP = $140.74

Step 4: Check Against Annual Maximum

The maximum annual CPP contribution is $4,034.10. Once reached, no more CPP is deducted for the remainder of the year.

How to Calculate EI Premiums

EI is simpler - there's no exemption:

EI = Gross Insurable Earnings × 1.64%

Example Calculation

For gross earnings of $2,500:

EI = $2,500 × 1.64%
EI = $41.00

The maximum annual EI premium is $1,077.48. For someone earning $65,700 or more annually, they'll hit this maximum.

Quebec's Unique Deductions

Quebec has its own pension and parental insurance programs:

QPP (Quebec Pension Plan)

• Rate: 6.40% (higher than CPP)
• Replaces CPP for Quebec employees
• Same maximum pensionable earnings ($71,300)

QPIP (Quebec Parental Insurance Plan)

• Employee rate: 0.494%
• Maximum insurable earnings: $94,000
• Maximum annual premium: $464.36

Reduced EI in Quebec

Because Quebec has QPIP, EI rates are reduced:

• Employee rate: 1.32% (vs 1.64% elsewhere)

Year-to-Date Tracking

Tracking YTD contributions is crucial because:

1. CPP/QPP Maximum: Once $4,034.10 (CPP) or $4,339.20 (QPP) is reached, stop deducting
2. EI Maximum: Once $1,077.48 ($867.24 in Quebec) is reached, stop deducting
3. QPIP Maximum: Once $464.36 is reached, stop deducting

PaystubPRO automatically tracks YTD amounts and stops deductions at the maximums.

Common Questions

What if an employee works in multiple provinces?

CPP/EI contributions are based on where the employee physically works, not where the employer is located.

Are self-employed people required to pay CPP?

Self-employed individuals pay both the employee and employer portions (11.9% total), but can opt out of EI.

When do new rates take effect?

New CPP and EI rates always take effect January 1st each year.

Using PaystubPRO's Calculator

Our free CPP & EI calculator:

1. Uses the correct 2026 rates automatically
2. Handles Quebec's QPP/QPIP calculations
3. Tracks YTD to respect annual maximums
4. Works for all pay frequencies

Try it now - create a pay stub and see accurate CPP/EI calculations instantly!