CPP & EI Maximum Contributions 2026: When Payroll Deductions Stop

For most employees outside Quebec, CPP applies to pensionable earnings above the $3,500 basic exemption up to the YMPE. CPP2 applies to the additional band of earnings between the YMPE and YAMPE. Employers make matching CPP and CPP2 contributions.

Quebec employees have a lower federal EI rate because Quebec administers its own parental insurance program. For 2026, the Quebec employee EI rate is $1.30 per $100 of insurable earnings and the maximum federal EI employee premium is $895.70.

EI premiums stop once your employee premiums reach the annual maximum for the year. CPP base and first additional contributions stop once the annual CPP maximum is reached, while CPP2 can continue on pensionable earnings above the YMPE up to the YAMPE.

This is why some higher-income employees notice a larger net paycheque later in the calendar year. The timing depends on salary, pay frequency, bonuses and how much CPP or EI has already been deducted by that employer.

An employee with pensionable and insurable earnings above the 2026 ceilings can eventually reach the maximum employee deductions of $4,230.45 for CPP, $416 for CPP2 and $1,123.07 for EI outside Quebec. After the applicable annual maximum has been reached, the employer stops deducting that item for the rest of the year.

Changing employers during the year can complicate the timing because a new employer generally starts its own payroll calculations. Any employee overpayment is normally reconciled through the income tax return, subject to CRA rules.

For 2026, the key employee payroll ceilings outside Quebec are $74,600 for the main CPP earnings ceiling, $85,000 for the CPP2 ceiling and $68,900 for EI insurable earnings. These limits matter when estimating annual take-home pay because CPP and EI do not keep rising indefinitely with salary.