CPP and CPP2 Explained: What's Coming Off Your Paycheque in 2026

What is CPP?

The Canada Pension Plan (CPP) is a mandatory retirement pension. Both you and your employer contribute. As an employee, your share is deducted automatically from each paycheque.

2026 CPP Rates

Amount
Basic Exemption	$3,500
Maximum Pensionable Earnings (YMPE)	$74,600
Employee Rate	5.95%
Maximum Employee Contribution	$4,230.45

You pay CPP on earnings between $3,500 and $74,600. Once you've contributed the maximum ($4,230.45), no more CPP is deducted for the rest of the year.

What is CPP2?

Starting in 2024, the government introduced CPP2 — an enhanced contribution on higher earnings.

Amount
Year's Additional Maximum (YAMPE)	$85,000
CPP2 Rate	4.0%
Maximum CPP2 Contribution	$416.00

CPP2 applies only on earnings between $74,600 (YMPE) and $85,000 (YAMPE). If you earn less than $74,600, you won't pay any CPP2.

How CPP Affects Your Pay

For a $80,000 salary:

• CPP: ($74,600 - $3,500) × 5.95% = $4,230.45 (maximum)
• CPP2: ($80,000 - $74,600) × 4.0% = $216.00
• Total: $4,446.45/year or about $171/paycheque (bi-weekly)

Quebec: QPP Instead of CPP

If you work in Quebec, you pay into the Quebec Pension Plan (QPP) instead. The QPP has similar thresholds but is administered by Revenu Québec. The employee rate is the same at 5.95% for 2026.

Will You Get It Back?

Yes — CPP contributions fund your retirement pension. The amount you receive depends on how much and how long you contributed. You can start receiving CPP as early as age 60 (reduced) or as late as 70 (enhanced).