CPP and EI Rates 2026: Complete Payroll Guide for Ontario Employers
The CPP and EI rates 2026 figures changed on January 1, and every Ontario employer running payroll needs them. The CPP earnings ceiling went up, the EI rate went down, and the second CPP tier still applies to higher earners. This guide lists the numbers, shows two worked examples, and covers the deadlines that trip up small businesses.
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CPP and EI rates 2026 at a glance
| Item | 2026 figure |
|---|---|
| CPP contribution rate (employee and employer each) | 5.95% |
| Year’s maximum pensionable earnings (YMPE) | $74,600 |
| Basic exemption | $3,500 |
| Maximum CPP contribution (each) | $4,230.45 |
| CPP2 rate (each) | 4.00% |
| CPP2 earnings range | $74,600 to $85,000 |
| Maximum CPP2 contribution (each) | $416.00 |
| EI employee rate | 1.63% |
| EI employer rate (1.4 times employee) | 2.282% |
| Maximum insurable earnings | $68,900 |
| Maximum EI employee premium | $1,123.07 |
| Maximum EI employer premium | $1,572.30 |
Confirm any figure against the CRA’s CPP contribution rates page before you file.
Self-employed CPP in 2026
If you are self-employed, you pay both halves. That is 11.9% on earnings between $3,500 and $74,600, up to $8,460.90, plus 8% on earnings from $74,600 to $85,000, up to $832. Self-employed people do not pay EI unless they opt in to special benefits.
Worked example: employee earning $60,000
- CPP: ($60,000 minus $3,500) × 5.95% = $3,361.75 from the employee, matched by the employer.
- CPP2: none, because earnings are below $74,600.
- EI: $60,000 × 1.63% = $978.00 from the employee.
- Employer EI: $978.00 × 1.4 = $1,369.20.
Total employer cost on top of salary: $4,730.95 for CPP and EI.
Worked example: employee earning $95,000
- CPP: maximum of $4,230.45.
- CPP2: maximum of $416.00, since earnings pass $85,000.
- EI: maximum of $1,123.07.
- Employer pays $4,230.45 CPP, $416.00 CPP2 and $1,572.30 EI.
Once an employee hits a maximum, stop deducting for the rest of the year. Payroll software does this, but manual payroll often misses it.
Common CPP and EI mistakes
- Deducting CPP from employees under 18 or over 70. CPP does not apply to them.
- Continuing CPP for an employee aged 65 to 70 who filed an election to stop contributing.
- Not restarting maximums for a new employee who already paid CPP at a previous job. Each employer deducts in full; the employee gets any overpayment back at tax time.
- Forgetting taxable benefits, like a company car or group life premiums, when calculating CPP.
- Deducting EI from a shareholder who owns more than 40% of voting shares, who is usually not in insurable employment.
Remittance deadlines for Ontario employers
- Regular remitters send deductions by the 15th of the month after the pay was issued.
- Quarterly remitters, where allowed, remit by the 15th after each quarter ends.
- Larger employers with higher average monthly withholdings remit more often.
- T4 slips and the T4 summary for 2026 payroll are due by the last day of February 2027.
Late remittances attract penalties starting at 3% and interest. If cash flow is tight, pay the remittance first.
Ontario payroll items besides CPP and EI
- Employer Health Tax applies to Ontario payroll, with a $1 million exemption for eligible private employers.
- WSIB premiums depend on your industry classification.
- Provincial income tax is withheld using Ontario tables.
If your company also saw a change in corporate tax this year, read our article on the Ontario small business tax rate cut.
Payroll remittance calendar for the rest of 2026
For regular monthly remitters, these are the due dates for CPP, EI and income tax deductions.
| Pay issued in | Remittance due |
|---|---|
| September 2026 | Thursday, October 15, 2026 |
| October 2026 | Monday, November 16, 2026 (the 15th is a Sunday) |
| November 2026 | Tuesday, December 15, 2026 |
| December 2026 | Friday, January 15, 2027 |
When a due date falls on a weekend or holiday, the CRA treats a payment on the next business day as on time.
Setting up a new Ontario employee
- Collect the employee’s social insurance number within three days of the start date.
- Have them complete the federal TD1 and the Ontario TD1ON forms.
- Check their date of birth so CPP starts and stops at the right age.
- Set up the pay rate, vacation pay and any taxable benefits in payroll.
- Apply the CPP and EI rates 2026 from the first pay.
- Issue a Record of Employment if they leave or have an interruption of earnings.
Year-end checks before you file T4s
- Match total CPP, EI and tax on T4s to the amounts you remitted.
- Confirm no employee went past the CPP, CPP2 or EI maximums.
- Add taxable benefits to box 14 and the right other boxes.
- Check names, addresses and SINs against your records.
- File the T4 return by Sunday, February 28, 2027. A filing on Monday, March 1 is accepted as on time.
A PIER review from the CRA compares what you deducted with what you should have deducted. Fixing errors before filing avoids a bill for the employer and employee share.
Frequently asked questions
Do CPP and EI rates 2026 apply to part-time staff?
Yes. Part-time and casual employees follow the same rates, with CPP starting after the prorated basic exemption for each pay period.
What is the self-employed CPP maximum for 2026?
$8,460.90 for the base CPP plus up to $832.00 for CPP2.
What is the maximum CPP contribution for 2026?
$4,230.45 for employees and employers each, plus up to $416.00 each for CPP2.
What is the EI rate for 2026?
1.63% of insurable earnings for employees, up to $68,900. Employers pay 1.4 times the employee amount.
Do owner-managers pay CPP on dividends?
No. CPP applies to salary, not dividends. That affects both your payroll cost and your future CPP pension.
Let us handle your payroll bookkeeping
Getting the CPP and EI rates 2026 numbers right each pay run keeps CRA penalties away. Corporate Empire handles bookkeeping and payroll records for Ontario small businesses. Book a free consultation to review your payroll setup.
