Business
Canada — Business: Social Security (CPP & EI)
Canada's employer-side social contributions consist of CPP (Canada Pension Plan) and EI (Employment Insurance), both matched or exceeded by the employer. Base CPP (CPP1) for 2026: 5.95% each for employer and employee, applied to earnings between the $3,500 basic exemption and the Year's Maximum Pensionable Earnings (YMPE) of $74,600 — maximum contribution $4,230.45 each. Enhanced CPP (CPP2) adds a further 4% each (employer and employee) on earnings between $74,600 and $85,000, capped at $416 each ($832 for self-employed, who pay both halves). EI: employees pay 1.63% up to $68,900 of earnings (max $1,123.07); employers pay 1.4× the employee rate, capped at $1,572.30 per employee for 2026.
Key facts
- CPP1 (base): 5.95% each employer/employee, on earnings $3,500-$74,600 (YMPE); max $4,230.45 each for 2026.
- CPP2 (enhanced): 4% each employer/employee, on earnings $74,600-$85,000; max $416 each ($832 total for self-employed).
- EI: employee 1.63% up to $68,900 (max $1,123.07); employer pays 1.4× employee rate, max $1,572.30 per employee.
- Self-employed individuals pay both the employer and employee CPP shares but do not pay EI unless they opt in.
Costs
- CPP1 (employer, max per employee): $4,230.45
- CPP2 (employer, max per employee): $416
- EI (employer, max per employee): $1,572.30
Common mistakes
- Forgetting CPP2 applies as a separate 4% tier on earnings between $74,600 and $85,000, on top of base CPP1.
- Assuming employer EI matches the employee rate exactly — it is 1.4× the employee contribution, not 1:1.