CPP & QPP

Canada Pension Plan contributions are partly deductible and partly credited. The design reflects the CPP enhancement that began in 2019: the original (base) contributions receive a non-refundable credit, while the new enhanced contributions are deductible, like contributions to a pension plan.

2026 CONTRIBUTION RULES

• Year's maximum pensionable earnings (YMPE): $74,600; basic exemption: $3,500.

• First tier (CPP1): 5.95 percent for employees and employers each (4.95 percent base plus 1 percent first enhancement); maximum $4,230.45 each.

• Second tier (CPP2): 4 percent each on earnings between $74,600 and the year's additional maximum pensionable earnings (YAMPE) of $85,000; maximum $416.00 each.

• Self-employed individuals pay both halves: up to $8,460.90 for CPP1 and $832.00 for CPP2.

• The 2026 Spring Economic Update announced that the base rate will fall from 4.95 percent to 4.75 percent for employees and employers from January 1, 2027.

LINE 22215: DEDUCTION FOR ENHANCED CONTRIBUTIONS

All employees and self-employed individuals deduct the enhanced portion of their own contributions: the 1 percent first enhancement and the full CPP2 contributions. Calculated on Schedule 8.

LINE 22200: DEDUCTION FOR SELF-EMPLOYED CONTRIBUTIONS

Self-employed individuals also deduct the employer's share of the base contributions on line 22200, just as a business deducts its employer contributions. The employee share of base contributions is claimed as a non-refundable credit on line 31000.

LINE 30800: CREDIT FOR EMPLOYEE BASE CONTRIBUTIONS

The base portion of employee contributions (4.95 percent) is converted into a non-refundable credit at 14 percent.

ELECTING TO STOP CONTRIBUTING

People aged 65 to 70 who receive a CPP retirement pension and still work can elect to stop contributing using Form CPT30 (employees) or Schedule 8 (self-employed). Contributions after age 70 are not permitted.

OVERPAYMENTS

Employees who change jobs often contribute more than the maximum because each employer deducts independently. The excess is refunded on line 44800. See CPP and EI Overpayments.