Quick answer: For 2026, employees pay CPP1 at 5.95% on pensionable earnings between the $3,500 basic exemption and the $74,600 YMPE (max $4,230.45), plus CPP2 at 4.00% on earnings between $74,600 and the $85,000 YAMPE (max $416.00). Combined employee max: $4,646.45. Employer matches dollar-for-dollar.
What this means: If you earn at or above $85,000 in 2026, you hit the combined CPP1 + CPP2 max during the year. The $3,500 basic exemption means CPP1 only applies above $3,500. CPP2 (the second-tier enhancement) only applies between the YMPE and YAMPE — below or above that range, CPP2 is zero. Self-employed pay both halves: max $9,292.90.
What to do next: Run your exact CPP for 2026 by salary and self-employment status. CPP contribution calculator →
2026 CPP key numbers at a glance
| Item | 2026 value | How it’s used |
|---|---|---|
| Basic exemption | $3,500 | No CPP on the first $3,500 of earnings |
| Year’s Maximum Pensionable Earnings (YMPE) | $74,600 | First ceiling; sets the top of the CPP1 band |
| Year’s Additional Maximum Pensionable Earnings (YAMPE) | $85,000 | Second ceiling; sets the top of the CPP2 band |
| Employee CPP1 rate | 5.95% | On pensionable earnings between $3,500 and $74,600 |
| Employer CPP1 rate | 5.95% | Matched dollar-for-dollar |
| Maximum employee CPP1 | $4,230.45 | 5.95% × ($74,600 − $3,500) |
| Employee CPP2 rate | 4.00% | On earnings between $74,600 and $85,000 |
| Maximum employee CPP2 | $416.00 | 4.00% × ($85,000 − $74,600) |
| Combined employee max (CPP1 + CPP2) | $4,646.45 | Reached when earnings hit $85,000 |
| Self-employed combined max (employee + employer halves) | $9,292.90 | 2 × ($4,230.45 + $416.00) |
All 2026 figures come from the CRA CPP contribution rates, maximums and exemptions table and the related Second additional CPP (CPP2) contribution rates and maximums table.
YMPE and YAMPE explained
CPP runs on two ceilings:
- YMPE (Year’s Maximum Pensionable Earnings) — $74,600 for 2026. This is the original CPP ceiling. CPP1 applies on the band between the $3,500 basic exemption and the YMPE: $71,100 of pensionable earnings.
- YAMPE (Year’s Additional Maximum Pensionable Earnings) — $85,000 for 2026. This is the second-tier ceiling introduced by CPP enhancement. CPP2 applies on the band between the YMPE and the YAMPE: $10,400 of additional pensionable earnings in 2026.
The YMPE is indexed annually to average industrial wage growth. The YAMPE is fixed at 7% above the YMPE for the year — so for 2026: $74,600 × 1.07 ≈ $79,822, except the legislated YAMPE rule sets it at approximately 14% above YMPE for 2025 onward, landing at $85,000 for 2026 ($74,600 × 1.14 = $85,044, rounded to $85,000).
CPP1: the original CPP contribution
CPP1 is the long-standing CPP contribution. The 2026 rate is 5.95% for the employee and 5.95% for the employer, applied to pensionable earnings between the $3,500 basic exemption and the $74,600 YMPE. Maximum 2026 CPP1 employee contribution: 5.95% × ($74,600 − $3,500) = $4,230.45. The employer match brings the per-employee CPP1 burden to $8,460.90 across both halves.
Once year-to-date pensionable earnings hit $74,600, CPP1 deductions stop on the paycheque and CPP2 takes over (see next section).
CPP2: the second-tier enhanced contribution
CPP2 is the second-tier CPP contribution introduced January 1, 2024 as part of the CPP enhancement. It applies on pensionable earnings between the YMPE and the YAMPE — for 2026, that’s the $10,400 band from $74,600 to $85,000.
The 2026 employee CPP2 rate is 4.00%; the employer matches. Maximum 2026 CPP2 employee contribution: 4.00% × $10,400 = $416.00. The employer match adds another $416 per employee.
CPP2 contributions are tracked separately on the T4: box 16A (employee CPP2 outside Quebec) or box 17A (employee QPP2 in Quebec). CPP2 builds toward an enhanced CPP retirement benefit for the years in which you contributed; it is not retroactive for years before 2024.
How CPP is calculated on a paycheque
CRA payroll formulas pro-rate the $3,500 basic exemption across the pay periods. On a biweekly schedule (26 pays), the per-pay exemption is $3,500 / 26 = $134.62. The institution then calculates 5.95% of pensionable earnings above $134.62 per pay, until year-to-date pensionable earnings hit $74,600. Once they hit the YMPE, CPP1 stops on the paycheque and CPP2 begins at 4.00% on earnings above $74,600 (without a basic exemption for the CPP2 band). Once year-to-date pensionable earnings hit $85,000, both CPP1 and CPP2 stop.
Practical effect: an employee earning $90,000 hits the combined maximum in early November and sees no CPP1 or CPP2 deductions on the last few paycheques of the year.
Self-employed CPP in 2026
Self-employed Canadians pay both the employee and employer halves of CPP1 and CPP2. The combined 2026 rates:
- CPP1: 11.90% (5.95% × 2) on net self-employment earnings between $3,500 and $74,600. Max contribution: $4,230.45 × 2 = $8,460.90.
- CPP2: 8.00% (4.00% × 2) on net self-employment earnings between $74,600 and $85,000. Max contribution: $416 × 2 = $832.00.
- Combined self-employed CPP1 + CPP2 max: $9,292.90.
Self-employed CPP is paid when you file your T1 return, not via paycheque. Half is deductible on line 22200; half is a non-refundable tax credit on Schedule 1.
Quebec residents: QPP and QPP2 instead
If you work in Quebec, you pay the Quebec Pension Plan (QPP) instead of CPP. QPP is administered by Revenu Québec and Retraite Québec, not CRA. The 2026 QPP rates are slightly higher than CPP:
- QPP1: 6.30% (vs CPP1’s 5.95%) on pensionable earnings between $3,500 and $74,600.
- QPP2: 4.00% (matches CPP2) on earnings between $74,600 and $85,000.
- Maximum QPP1 employee contribution: 6.30% × $71,100 = $4,479.30 (higher than CPP1’s $4,230.45).
- Maximum QPP2 employee contribution: 4.00% × $10,400 = $416.00 (same as CPP2).
Employers match both QPP1 and QPP2 dollar-for-dollar, just like CPP. QPP contributions appear on your RL-1 slip (the Quebec equivalent of T4).
Worked example: Ontario employee earning $90,000
Priya earns $90,000 in 2026 in Ontario, paid biweekly ($3,461.54 per pay across 26 pays).
| Component | 2026 amount | How it’s calculated |
|---|---|---|
| Pensionable earnings (CPP1 band) | $71,100 | $74,600 YMPE − $3,500 basic exemption |
| Employee CPP1 contribution | $4,230.45 | 5.95% × $71,100 |
| Pensionable earnings (CPP2 band) | $10,400 | $85,000 YAMPE − $74,600 YMPE |
| Employee CPP2 contribution | $416.00 | 4.00% × $10,400 |
| Total employee CPP for 2026 | $4,646.45 | $4,230.45 + $416.00 |
| Employer match | $4,646.45 | Same as employee total |
| Total per-employee CPP burden | $9,292.90 | Both halves combined |
Priya hits the combined max in early November 2026. From that point until year-end, no further CPP1 or CPP2 comes off her paycheques. Her T4 for 2026 will show box 16 (CPP1) at $4,230.45 and box 16A (CPP2) at $416.00.
Common mistakes
- Confusing CPP1 and CPP2 ceilings. CPP1 stops at the YMPE ($74,600); CPP2 starts at the YMPE and stops at the YAMPE ($85,000). They do not overlap.
- Forgetting the basic exemption applies only to CPP1. The $3,500 basic exemption reduces CPP1 pensionable earnings; CPP2 applies to the full YMPE-to-YAMPE band.
- Mixing up 2025 and 2026 figures. The 2025 YMPE was $71,300 and the 2025 YAMPE was $81,200 — both rose to $74,600 and $85,000 for 2026.
- Treating CPP2 as retroactive. CPP2 builds toward enhanced retirement benefits only for years (2024 onward) in which contributions were made.
- Assuming self-employed pay the same as employees. Self-employed pay both halves — effectively double the employee rate.
- Mixing CPP and QPP. Quebec workers pay QPP and QPP2 instead. The contribution amounts and administration are different.
Frequently asked questions
What is the maximum CPP contribution for 2026?
The combined employee CPP1 + CPP2 maximum is $4,646.45. CPP1 alone is $4,230.45 and CPP2 alone is $416.00. The employer matches both, dollar-for-dollar.
What is the YMPE for 2026?
$74,600 (up from $71,300 in 2025). This is the upper ceiling for CPP1 contributions.
What is the YAMPE for 2026?
$85,000 (up from $81,200 in 2025). This is the upper ceiling for CPP2 contributions.
Does CPP2 reduce my take-home pay?
Yes, by up to $416 per year if your earnings reach or exceed $85,000. Half is deductible on your T1 (line 22200) and half is a non-refundable credit on Schedule 1, partially offsetting the cost.
How does QPP compare to CPP in 2026?
QPP1 is 6.30% vs CPP1’s 5.95% — higher contribution. Maximum QPP1 employee contribution: $4,479.30 (vs $4,230.45 for CPP1). QPP is administered by Retraite Québec. QPP2 is 4.00%, matching CPP2. Quebec workers pay slightly more in total. QPP is administered by Revenu Québec, not CRA.