Every Canadian employee has two mandatory payroll deductions beyond income tax: CPP (Canada Pension Plan) and EI (Employment Insurance). Both fund specific government programs and both have annual maximums, after which deductions stop for the rest of the year.
| Component | Rate | Earnings range |
|---|---|---|
| Base CPP | 5.95% | $3,500 – $68,500 |
| CPP2 (enhancement) | 4% | $68,500 – $73,200 |
CPP2 was introduced in 2024 as part of a multi-year CPP enhancement plan, adding a second, higher earnings ceiling. It only affects earners above the original $68,500 limit.
| Region | Rate | Maximum insurable earnings |
|---|---|---|
| Rest of Canada | 1.66% | $65,700 |
| Quebec | 1.32% | $65,700 |
Quebec's lower EI rate reflects the fact that Quebec runs its own Quebec Parental Insurance Plan (QPIP) separately, which covers maternity, parental, and adoption benefits that EI handles for the rest of Canada — Quebec residents pay into QPIP through a separate deduction instead.
CPP: ($65,000 − $3,500) × 5.95% = $3,659. Since $65,000 is below the $68,500 CPP2 threshold, no CPP2 applies. EI: $65,000 × 1.66% = $1,079 (below the $65,700 maximum insurable earnings, so the full salary is insurable). Total CPP + EI: $4,738 for the year.
If your salary is high enough to exceed the maximum pensionable earnings ($68,500/$73,200 for CPP) or maximum insurable earnings ($65,700 for EI) before December, those deductions stop entirely for the rest of the calendar year — meaning your take-home pay increases slightly for your final paycheques of the year, before resetting back to normal in January.