The 2026 figures
The base CPP calculation applies the 5.95% rate to pensionable earnings above the $3,500 basic exemption, up to the yearly maximum of $74,600. That makes the 2026 maximum $4,230.45 for the employee, and the employer pays the same amount for that employee. Contributions generally apply to employees aged 18 to 69.
CPP2, the second additional contribution, applies to earnings above $74,600 up to $85,000. The rate is 4% each for employee and employer, with a maximum of $416 each.
A worked illustration
Suppose an employee earns $60,000 for 2026. The pensionable amount is $60,000 minus $3,500, or $56,500, and 5.95% of that is $3,361.75. The employer pays a matching $3,361.75, so the business spends $6,723.50 in CPP on this person, on top of wages. No CPP2 applies because pay stays below $74,600. These are round, illustrative numbers.
Now take an employee earning $90,000. They reach the base maximum of $4,230.45 and pay CPP2 on the $10,400 band, which is $416, so the employee’s total is $4,646.45. The employer matches. Pay above $85,000 attracts no further CPP.
If you are self-employed
A self-employed person is both employee and employer, so you pay both shares. CRA’s tables show the CPP2 maximum for self-employed people as $832 in 2026, twice the employee amount. If net self-employment or pensionable employment income is more than $3,500, you calculate and pay CPP when you file your personal return rather than through payroll deductions.
That bill arrives with your income tax balance, so it belongs in your cash planning and instalment thinking. Ask your accountant how the amount interacts with the rest of your return.
Practical points for employers
Deductions come off each paycheque and are remitted with income tax and EI, so CPP is a liability your payroll must carry until it is paid. The employer’s matching share is not shown on the T4 slip.
Ask your accountant how mid-year starts, bonuses, employees turning 18 or 70, and exempt earnings affect the calculation. Employees whose province of employment is Quebec pay into the Quebec Pension Plan instead, so this entry applies to the rest of Canada. Keep the rate tables and payroll register used for each year.
Sources & editorial notes
Sources checked October 24, 2026. The examples are illustrative and provide general information. Discuss how the guidance applies to your circumstances with your accountant.
- CPP contribution rates, maximums and exemptionsCanada Revenue Agency
- CPP2 contribution rates and maximumsCanada Revenue Agency
- Canada Pension Plan (CPP) contributionsCanada Revenue Agency
Rules and guidance can change. Use the current official source and confirm the treatment for your facts. To flag an error, contact Sora.