CPP contributions are mandatory payments that employees, employers, and self-employed Canadians make into the Canada Pension Plan.
The money funds future retirement pensions, disability benefits, survivor benefits, and post-retirement benefits.
In 2026, employees and employers each contribute 5.95% on pensionable earnings between $3,500 and $74,600, with a maximum employee contribution of $4,230.45.
CRA confirms these figures in its annual contribution table. The guide covers the following aspects:
- How CPP2 applies to higher earners
- How CPP contributions are calculated
- Why CPP deductions may stop mid-year
- Who must contribute (and who is exempt)
- Side-by-side comparison of 2026 vs 2025 rates
- How to check your contribution record with Service Canada
TLDR: CPP Contributions
The table below captures the 2026 CPP numbers that affect every paycheque in Canada.
| CPP Item (2026) | Amount |
|---|---|
| Basic exemption | $3,500 |
| Maximum pensionable earnings (YMPE) | $74,600 |
| Maximum contributory earnings | $71,100 |
| Employee/employer rate | 5.95% |
| Maximum employee contribution | $4,230.45 |
| Maximum employer contribution | $4,230.45 |
| Self-employed rate | 11.9% |
| Maximum self-employed contribution | $8,460.90 |
Who Has to Contribute to CPP?
Most working Canadians over 18 are required to contribute, but the rules differ depending on employment type and province.
The Government of Canada states that, with few exceptions, every person over 18 who works in Canada outside Quebec and earns more than $3,500 per year must contribute to CPP. Quebec workers contribute to the Quebec Pension Plan (QPP) instead, which has its own rates and rules.
Three groups share the contribution responsibility in different ways.
| Worker Type | Pays Employee Portion? | Pays Employer Portion? | 2026 Maximum |
|---|---|---|---|
| Employee | Yes | No | $4,230.45 |
| Employer | No | Yes | $4,230.45 per employee |
| Self-employed | Yes | Yes | $8,460.90 |
Self-employed Canadians pay both halves because no employer exists to split the cost. The 11.9% combined rate is based on net business income after expenses. For those filing taxes as self-employed, this often catches first-time filers off guard.
How Are CPP Contributions Calculated?
The formula is straightforward, but the way the basic exemption applies through payroll periods trips up even experienced bookkeepers.
CPP contribution = (pensionable earnings − basic exemption) × contribution rate, up to the annual maximum.
A worked example makes the formula clearer.
- Annual salary of $60,000
- Subtract $3,500 basic exemption
- Pensionable earnings of $56,500
- Employee contribution at 5.95% = $3,361.75
- Employer contributes an identical $3,361.75
CRA applies the $3,500 basic exemption across pay periods (not as a single lump-sum deduction), which means each paycheque has a slightly different exemption amount depending on whether the pay cycle is weekly, biweekly, or monthly.
What Is CPP2 and How Does It Affect Higher Earners?
CPP2 is the second additional CPP contribution that started in 2024.
It applies only to earnings above the regular CPP ceiling and below a second, higher ceiling. Most workers earning under $74,600 never encounter it.
For 2026, CPP2 covers earnings between $74,600 and $85,000 at a 4% rate for both employees and employers. The maximum employee CPP2 contribution is $416, and self-employed workers pay both portions for a maximum of $832 (Canada.ca).
The two tiers stack as follows.
| CPP Tier | Earnings Range (2026) | Employee Rate | Max Employee Contribution |
|---|---|---|---|
| CPP Tier 1 | $3,500 to $74,600 | 5.95% | $4,230.45 |
| CPP2 | $74,600 to $85,000 | 4% | $416 |
A common point of confusion is that CPP2 does not replace regular CPP. Both apply simultaneously to someone earning above $74,600, which means the combined maximum employee contribution for 2026 is $4,646.45 ($4,230.45 + $416). Employers match each tier separately.
How Do 2026 CPP Rates Compare to 2025?
The rate stayed at 5.95%, but the earnings ceiling rose, which pushed the maximum contribution higher.
| Year | YMPE | Basic Exemption | Rate | Max Employee Contribution | Max Self-Employed Contribution |
|---|---|---|---|---|---|
| 2025 | $71,300 | $3,500 | 5.95% | $4,034.10 | $8,068.20 |
| 2026 | $74,600 | $3,500 | 5.95% | $4,230.45 | $8,460.90 |
CPP2 also shifted upward.
| Year | CPP2 Upper Ceiling | CPP2 Rate | Max Employee CPP2 |
|---|---|---|---|
| 2025 | $81,200 | 4% | $396 |
| 2026 | $85,000 | 4% | $416 |
For employers running payroll, the practical effect is a slightly higher per-employee cost each January. The change is gradual, but it compounds across a large workforce.
Why Do CPP Deductions Sometimes Stop Mid-Year?
Employees occasionally notice that CPP stops coming off their paycheque partway through the year, followed by a noticeable bump in take-home pay. The explanation is simple — the annual maximum has been reached.
Once an employee's year-to-date CPP contributions hit $4,230.45 (for regular CPP), the employer stops deducting. Deductions restart the following January.
Western University's payroll office confirms that workers may see a net pay increase when CPP deductions stop and a decrease when they resume in the new year (Western University).
For people who change jobs mid-year, the new employer starts deducting CPP from scratch because they have no visibility into prior deductions.
If total contributions from multiple employers exceed the annual maximum, the overpayment is refunded through the tax return.
What Are the CPP Age Rules?
CPP contributions follow age-based phases that shift between mandatory, optional, and prohibited.
- Under 18 — no CPP contributions
- 18 to 64 — mandatory for all workers earning above $3,500
- 60 to 65 and receiving CPP retirement pension — contributions remain mandatory if still working
- 65 to 70 and receiving CPP retirement pension — the worker may elect to stop contributing by filing Form CPT30 with both the employer and CRA
- 70 and older — CPP contributions stop entirely, regardless of employment status
Canada.ca confirms that at age 70, workers no longer contribute to CPP even if they continue working (Canada.ca). Workers who continue contributing between 65 and 70 earn post-retirement benefits that increase their monthly CPP payment.
How Can You Check Your CPP Contributions?
Service Canada maintains a Statement of Contributions for every CPP contributor. Reviewing it periodically is worth the few minutes it takes, especially for anyone who changed jobs frequently, worked part-time, or had self-employment gaps.
The verification process follows a few steps.
- Log in to My Service Canada Account
- Open the CPP Statement of Contributions
- Review years worked, earnings credited, and contributions recorded
- Compare against T4 slips or tax records for accuracy
- Contact Service Canada if any years appear missing or incorrect
CRA and Revenu Québec provide Service Canada with earnings and contribution details, and Service Canada keeps a record through a Statement of Contributions. Errors in this record directly affect the size of a future CPP retirement pension.
Can You Get CPP Contributions Back?
CPP is not a savings account. Contributions cannot be withdrawn simply because someone wants the money. Two narrow exceptions exist where CRA issues a refund.
Overpayment
If total contributions from multiple employers exceed the annual maximum, the excess is refunded when filing the tax return.
Below-minimum earnings
If total pensionable earnings fall below $3,500, the contributions are refunded through the income tax return.
For workers who leave Canada, CPP contributions are not typically paid out as a lump sum.
Future benefits may still be payable if eligibility rules are met, and Canada's international social security agreements with many countries can help combine contribution periods for pension qualification.
For anyone considering this scenario, the RRSP rules for leaving Canada follow a similar logic but with different mechanics.
Where Do CPP Contributions Go?
Contributions first pay current CPP benefits to retirees, disabled contributors, survivors, and estates.
Remaining net contributions flow into the CPP Fund, which is invested by CPP Investments across global markets. CPP Investments confirms that contributions are first used to pay CPP benefits, while the remaining money is invested in the CPP Fund (CPP Investments).
The fund structure means today's contributions serve a dual purpose — paying current beneficiaries and building long-term reserves that support future generations of retirees.
Frequently Asked Questions
What are CPP contributions?
CPP contributions are mandatory payments made by workers and employers to the Canada Pension Plan. Employees pay 5.95% on pensionable earnings between $3,500 and $74,600 in 2026, and employers match that amount. Self-employed Canadians pay both portions (11.9%). The money funds retirement pensions, disability benefits, survivor benefits, and post-retirement benefits. CPP operates in all provinces and territories except Quebec, where workers contribute to the Quebec Pension Plan instead. Contributions are calculated on pensionable earnings after the basic exemption and stop once the annual maximum is reached.
What is the maximum CPP contribution for 2026?
The maximum employee and employer CPP contribution for 2026 is $4,230.45 each, based on maximum pensionable earnings of $74,600, a basic exemption of $3,500, and a contribution rate of 5.95%. Self-employed workers pay both sides for a maximum of $8,460.90. CPP2 adds a second layer for earnings between $74,600 and $85,000 at 4%, with a maximum employee CPP2 contribution of $416. Combined, the maximum a high-earning employee can contribute across both tiers in 2026 is $4,646.45. CRA publishes updated tables each year.
What is CPP2?
CPP2 is the second additional CPP contribution introduced in 2024 as part of the CPP enhancement. It applies only to pensionable earnings above the first CPP ceiling ($74,600 in 2026) and below the second ceiling ($85,000 in 2026). The employee and employer CPP2 rate is 4%, with a maximum employee contribution of $416. Self-employed workers pay both portions at 8%, capping at $832. CPP2 does not replace regular CPP — both tiers apply simultaneously for workers who earn above the first ceiling. The additional contributions increase future CPP retirement benefit amounts.
Do employers match CPP contributions?
Yes. Employers contribute an amount equal to the employee's CPP deduction. In 2026, the maximum employer contribution is $4,230.45 for regular CPP and $416 for CPP2, matching the employee amounts exactly. Employers remit both the employee and employer portions to CRA through payroll remittances. Self-employed workers have no employer, so they pay both halves themselves. The employer portion is a payroll cost separate from the employee's wages — it does not come out of the employee's pay. Employers must stop deducting CPP once the employee reaches the annual maximum.
Why did CPP stop coming off my paycheque?
CPP deductions stop once your year-to-date contributions reach the annual maximum ($4,230.45 for regular CPP in 2026). After hitting the cap, your employer stops deducting CPP from each paycheque, which temporarily increases your take-home pay. Deductions restart automatically the following January. If you changed jobs during the year, your new employer may begin deducting from scratch because they cannot see your prior employer's records. Any overpayment across multiple employers is refunded when you file your income tax return for the year.
Can I check my CPP contributions?
Yes. Service Canada maintains a Statement of Contributions that records your pensionable earnings and CPP contributions by year. You can view your statement by logging into My Service Canada Account online. The record shows how much was contributed each year and allows you to spot missing years, incorrect earnings, or gaps in your contribution history. Errors in this record can reduce your future CPP retirement pension amount, so checking periodically — especially after job changes — is worthwhile. If something looks wrong, contact Service Canada directly with your T4 slips as supporting documentation.
