CPP & EI Employer Contributions Canada 2026

When you employ someone in Canada, your legal obligation doesn't stop at writing a paycheque. As an employer, you must match — and in the case of EI, exceed — every dollar of CPP and EI that your employees contribute. Getting these contributions wrong (or late) triggers some of the most severe CRA penalties in the payroll system, including personal liability for company directors.

This guide covers the 2026 rates, maximums, remittance rules, and the key exceptions every Canadian employer needs to know.

2026 CPP Employer Contributions

Employers contribute dollar-for-dollar with employees on CPP. There are two tiers:

Tier	Employee Rate	Employer Rate	Annual Ceiling	Employer Max/Employee
CPP1 (base)	5.95%	5.95%	~$71,300	~$4,034
CPP2 (enhanced)	4.00%	4.00%	~$73,200 (second ceiling)	~$396

Once an employee's earnings reach the annual maximum for CPP1 (or CPP2), contributions stop for both the employee and the employer. Payroll software tracks this automatically, but if you pay manually, you must monitor cumulative earnings per employee.

Basic exemption: The first $3,500 of each employee's annual earnings is exempt from CPP contributions. This exemption is prorated per pay period.

QPP for Quebec Employers

Quebec employers contribute to the Québec Pension Plan (QPP / RRQ) instead of CPP. QPP rates are slightly different from CPP and are set by Revenu Québec. All QPP remittances go to Revenu Québec, not the CRA.

2026 EI Employer Premiums

Employers pay 1.4 times the employee EI premium rate — a multiplier that funds the employer's share of the EI system.

Who	Rate	Annual Insurable Earnings	Max Annual Premium
Employee	1.66%	~$65,700	~$1,091
Employer	2.32% (1.4 × 1.66%)	Same	~$1,527 per employee

EI Employer Premium Reduction

If your business provides a short-term disability plan (wage loss replacement plan) that qualifies, you may be eligible for an EI premium reduction — which lowers both the employee and employer rates. The savings must be shared with employees (at least 5/12 of the savings). Apply using Form T102A if you believe you qualify.

Quebec EI and QPIP

Quebec employees and employers pay a lower federal EI rate because Quebec has its own parental insurance plan (RQAP/QPIP) administered provincially. Quebec employers must remit both federal EI (at reduced Quebec rates) and QPIP contributions to Revenu Québec.

Who Is Exempt from CPP and EI?

Not all workers are subject to CPP or EI. Key exemptions:

• CPP exemptions: Employees under 18 or over 70; employees receiving CPP/QPP retirement pension who elected to stop contributing (CPT30 form); certain casual agricultural workers; religious groups with approved exemptions
• EI exemptions: Self-employed persons (unless they opt in for special benefits); employees related to the employer who don't deal at arm's length (this is complex — the CRA assesses the employment as insurable or not based on facts)
• Family members: Spouses, parents, or children employed in your business may or may not be subject to EI depending on whether the CRA considers the employment "insurable." CPP still applies to family members who are employees.

Remittance Obligations

All CPP, EI, and income tax deductions plus employer contributions must be remitted together. The frequency depends on your Average Monthly Withholding Amount (AMWA) — see our guide: CRA Payroll Remittances: Frequencies and Penalties.

Director Liability for Unpaid Remittances

This is the most dangerous aspect of payroll obligations. Under the Income Tax Act and the Employment Insurance Act, directors of a corporation are personally liable for unremitted source deductions (CPP, EI, and income tax withheld from employees). This liability survives the corporation going bankrupt.

If your corporation fails to remit $50,000 in payroll deductions and goes insolvent, the CRA can pursue each director personally for the full $50,000 — plus interest and penalties. The two-year limitation period for director liability starts from the date the director resigned or the corporation was dissolved.

A "due diligence" defence exists — if you took specific concrete steps to prevent the failure and acted reasonably, courts have sometimes accepted this. But it's a high bar. The practical lesson: never let payroll remittances fall behind.