How much does an employer pay in CPP and EI per employee in 2026?

Up to $4,646.45 in employer CPP and CPP2 combined, plus up to $1,572.30 in employer EI. Total maximum employer cost is $6,218.75 at the ceilings ($85,000 of pensionable earnings, $68,900 of insurable earnings).

What is the 2026 employer EI rate?

1.4 times the employee rate. Outside Quebec, the employee rate is 1.63 percent and the employer rate is 2.282 percent on the first $68,900 of insurable earnings.

What is CPP2 in 2026?

A second additional CPP contribution at 4 percent on pensionable earnings between $74,600 (YMPE) and $85,000 (YAMPE). Employer maximum CPP2 is $416 per employee.

Does the employer pay any other payroll taxes beyond CPP and EI?

Possibly: Workers' Compensation Board premiums in all provinces, Employer Health Tax in Ontario, BC, Manitoba, and Newfoundland and Labrador (and the FSS in Quebec) above each province's exemption.

What is the total cost of a $85,000 hire in Ontario?

Approximately $91,400 for a small employer below the EHT exemption. That includes salary, employer CPP and EI, and a typical WSIB premium, before any group benefits.

Are bonuses subject to CPP and EI?

Yes. Bonuses are pensionable and insurable earnings, so they generate employer CPP and EI on top of base salary, up to the annual ceilings.

Do employer payroll costs keep increasing with salary?

Only up to the CPP and EI ceilings. Above $85,000 of pensionable earnings and $68,900 of insurable earnings, mandatory employer payroll cost stops adding for that employee.

Employer CPP and EI Costs: What It Really Costs to Hire Someone

Hiring an Ontario employee at $85,000 costs roughly $6,219 of employer CPP, CPP2, and EI in 2026, plus WSIB, EHT for larger employers, and benefits. Above the CPP/EI ceilings, mandatory payroll cost stops adding. This guide breaks down the 2026 rates, ceilings, and a worked example.

Reviewed by Canadian Money Help Editorial Updated May 7, 2026 Source CRA 2026

Quick answer: Hiring a $70,000 employee in Ontario costs roughly $5,200 above salary in 2026: about $4,034 in employer CPP base + $1,572 in employer EI (1.4× employee rate). WSIB and any benefits stack on top. Quebec is lower because QPIP replaces the parental portion of EI.

What this means: The employer share doesn’t scale linearly with employee net take-home. Above the YMPE ($71,300 in 2026), CPP enhancement (CPP2) adds another 4% on the YAMPE band. EI premiums stop at the maximum insurable earnings ($68,900 in 2026).

What to do next: Calculate exact CPP + EI employer cost for your hire. EI contribution calculator →

Hiring an employee in Canada costs more than the salary on the offer letter. The employer must add CPP contributions, CPP2 contributions, EI premiums (1.4 times the employee rate), and any provincial workers’ compensation, employer health tax, or pension/benefits. For 2026, employer CPP and CPP2 alone add up to $4,646.45 on the first $85,000 of pensionable earnings, and employer EI adds up to $1,572.30 on the first $68,900 of insurable earnings. That is roughly $6,218.75 of employer-side payroll cost on a $85,000 salary, before any other benefits.

2026 employer payroll rates and ceilings (outside Quebec)

Item	Rate	Ceiling	Maximum employer cost
CPP1 (employer share)	5.95%	$74,600 minus $3,500 basic exemption = $71,100	$4,230.45
CPP2 (employer share)	4%	$85,000 minus $74,600 = $10,400	$416.00
EI (employer share)	1.4 × employee rate = 2.282%	$68,900 maximum insurable earnings	$1,572.30
Combined CPP + CPP2 + EI	—	—	$6,218.75 at the ceilings

Quebec rates differ. Quebec employees and employers pay QPP (5.40% / 5.40% on first ceiling and 4% / 4% on second), Quebec-rate EI (1.30% / 1.82%), and QPIP (Quebec Parental Insurance Plan).

Provincial add-ons to consider

Item	Province(s)	2026 cost (approx.)
Employer Health Tax (EHT)	Ontario, BC, Manitoba, Newfoundland and Labrador, Quebec	0.98% to 4.26% above each province’s exemption threshold
Workers’ Compensation Board premiums	All provinces	0.10% to 8% of insurable earnings depending on industry classification
Health Services Fund (FSS, Quebec)	Quebec	1.25% to 4.26% based on payroll size

Worked example: $85,000 employee in Ontario

Gross salary: $85,000.
Employer CPP1: $71,100 × 5.95% = $4,230.45.
Employer CPP2: $10,400 × 4% = $416.00.
Employer EI: $68,900 × 2.282% = $1,572.30.
Ontario EHT (assuming employer total payroll above $1.0M and below $5M): 1.95% × ($85,000 – exempt portion). For a small employer below the $1.0M payroll threshold, EHT is zero.
WSIB premium (typical office work, rate group around 0.20%): $85,000 × 0.20% = $170.
Total employer-side cost: $85,000 + $4,230.45 + $416.00 + $1,572.30 + $170 = roughly $91,388.75 for a small employer below the EHT exemption.

Higher salaries

Above the CPP and EI ceilings, mandatory employer payroll costs stop adding. A $200,000 employee still triggers the same maximum $6,218.75 of CPP/CPP2/EI as an employee at the ceilings. The remaining additional cost for higher salaries comes from EHT, group benefits, retirement plans, and any bonus or vacation accruals.

Group benefits and retirement

Benefit	Typical employer cost	Notes
Extended health and dental	2% to 5% of salary for a single employee plan; higher for family	Premium-driven; varies with claim experience
Group RRSP matching	2% to 6% of salary	Employer portion is taxable as employment income to employee, deductible to employer
Defined contribution pension	3% to 8% of salary	Capped at PA limits; CRA-registered plan
Vacation accrual	4% to 8% of salary depending on years of service and province	Most provinces require a minimum of 4% (2 weeks) for new employees

Hidden costs

Statutory holiday pay (typically 9 to 11 days per year depending on province).
Severance accrual and termination notice (statutory amounts increase with tenure).
Onboarding costs: equipment, software licences, training time.
Recruiting fees: 15% to 25% of first-year salary if using an agency.
Manager time spent on hiring, onboarding, and supervision.

Quick rule of thumb

For an Ontario small employer with no EHT and basic WSIB, mandatory employer payroll add-ons run roughly 7 to 8 percent of salary up to the CPP/EI ceilings, then taper to almost nothing above the ceilings. A typical fully loaded cost (including a basic group benefits plan and statutory holiday pay) is 1.15 to 1.25 times salary at typical $60,000 to $90,000 levels.

Frequently asked questions

How much does an employer pay in CPP and EI per employee in 2026?: Up to $4,646.45 in employer CPP and CPP2 combined, plus up to $1,572.30 in employer EI. Total maximum employer cost is $6,218.75 at the ceilings ($85,000 of pensionable earnings, $68,900 of insurable earnings).
What is the 2026 employer EI rate?: 1.4 times the employee rate. Outside Quebec, the employee rate is 1.63 percent and the employer rate is 2.282 percent on the first $68,900 of insurable earnings.
What is CPP2 in 2026?: A second additional CPP contribution at 4 percent on pensionable earnings between $74,600 (YMPE) and $85,000 (YAMPE). Employer maximum CPP2 is $416 per employee.
Does the employer pay any other payroll taxes beyond CPP and EI?: Possibly: Workers' Compensation Board premiums in all provinces, Employer Health Tax in Ontario, BC, Manitoba, and Newfoundland and Labrador (and the FSS in Quebec) above each province's exemption.
What is the total cost of a $85,000 hire in Ontario?: Approximately $91,400 for a small employer below the EHT exemption. That includes salary, employer CPP and EI, and a typical WSIB premium, before any group benefits.
Are bonuses subject to CPP and EI?: Yes. Bonuses are pensionable and insurable earnings, so they generate employer CPP and EI on top of base salary, up to the annual ceilings.
Do employer payroll costs keep increasing with salary?: Only up to the CPP and EI ceilings. Above $85,000 of pensionable earnings and $68,900 of insurable earnings, mandatory employer payroll cost stops adding for that employee.