YMPE (year’s maximum pensionable earnings)

Two ceilings, not one

Before 2024 there was a single ceiling. Since then the CPP has had a first ceiling, the YMPE, and an additional maximum pensionable earnings amount, the YAMPE. The CRA publishes both in the same yearly table that lists registered pension and RRSP limits.

For 2026 the YMPE is $74,600 and the YAMPE is $85,000. A year earlier they were $71,300 and $81,200, and in 2024 they were $68,500 and $73,200. The 2027 row on the CRA table had not been filled in when this entry was prepared, so check the table before planning next year’s payroll.

What each band does

Base CPP is calculated on pensionable earnings above the $3,500 basic exemption up to the YMPE, at 5.95% for 2026. Earnings between the YMPE and the YAMPE attract CPP2 at 4%. Pay above the YAMPE adds no further CPP. The rates, maximum dollar amounts and employer match are in the CPP contributions entry.

The YMPE is not the same as the EI maximum insurable earnings, which is $68,900 for 2026. Mixing them up is a common reason a payroll estimate is wrong.

An illustrative example

Suppose an employee earns $80,000 in 2026. Contributory earnings for base CPP are the $74,600 YMPE less the $3,500 exemption, or $71,100, and 5.95% of that is $4,230.45. The remaining $5,400 up to $80,000 is in the CPP2 band, and 4% of it is $216. The employer matches both amounts. The figures are round and illustrative.

For the same employee, EI premiums stop at $68,900 of insurable earnings, so the two plans reach their limits at different points in the year.

When the ceiling is applied per job

The ceiling applies to each job with a different employer, identified by business number. A person who moves employers mid-year is not credited with CPP already withheld, so they can contribute more than the maximum in total. The excess is generally recovered through the personal tax return, while the employer’s share is not refunded.

If you are self-employed, you do not go through payroll. You work out your CPP when you complete your tax return, so the yearly figures still matter for your own planning.

What to discuss with your accountant

Ask when the new year’s figures take effect in your payroll software, how to handle employees with two jobs, and whether your cash plan allows for the full employer share. Bring your payroll register and last year’s T4 summary.