# Reading your pay stub: CPP, EI and tax

> What the CPP, EI and income tax deductions on your pay stub are, how your employer works them out, and why some of them stop before the year ends.

- Web page: https://taxnotes.ca/guides/reading-your-pay-stub/
- For: Individuals & families · Topic: Work and pay
- Last reviewed: 2026-10-10

Almost every pay stub in Canada shows three government deductions: Canada Pension Plan (CPP) contributions, Employment Insurance (EI) premiums and income tax. Your employer works out each one from your pay and sends it to the government for you. CPP and EI stop once you've paid the year's maximum; income tax never does.

The figures below are for pay you receive in 2026. The table at the end adds 2025, and the [CPP, QPP, EI and QPIP table](https://taxnotes.ca/rates/cpp-ei/) has the rest.

## CPP contributions

You contribute to the CPP if you're between 18 and 69 and in pensionable employment, even if you already receive a CPP or QPP retirement pension. If you're 65 to 69, you may be able to stop contributing by giving your employer a completed Form CPT30, Election to Stop Contributing to the Canada Pension Plan. People considered disabled under the CPP or QPP don't contribute.

CPP applies to salary and wages, commissions, bonuses, most taxable benefits and some tips. In 2026 you pay 5.95% of your earnings above a basic exemption of $3,500, up to the year's maximum pensionable earnings of $74,600. Your employer spreads the exemption across your pay periods, so a small slice of each cheque is contribution-free. That's why the CPP line is a little less than the rate times your gross pay. Your employer pays an equal amount on top, not out of your pay.

Above that first ceiling, a second, smaller contribution applies. CPP2 is 4% of your earnings between $74,600 and $85,000. If you earn less than the first ceiling, you'll never see a CPP2 deduction.

## EI premiums

EI premiums start with your first dollar of insurable earnings, and there's no age limit. They apply to much the same pay as CPP, including bonuses. In 2026 you pay 1.63% of your insurable earnings, up to maximum insurable earnings of $68,900. Your employer pays 1.4 times your premium on top.

## Why CPP and EI stop partway through the year

Once you've paid the year's maximum CPP and EI with an employer, it stops deducting them and your take-home pay goes up.

The maximums apply to each employer separately. If you hold two jobs, both employers deduct CPP and EI. If you change jobs during the year, your new employer starts from zero, even if you'd already reached the maximum at your old job. Any overpayment is refunded when you file your tax return.

## Income tax

Income tax has no maximum and no employer share. It comes off from the first dollar, every pay. Your employer works it out from:

- **Your province of employment.** It decides which provincial or territorial tax is withheld.
- **Your TD1 forms.** You fill out a federal TD1 when you start a new job or want to change your claim, and a provincial or territorial one if you claim more than the basic personal amount. They tell your employer which personal credits to allow for, such as the federal basic personal amount ($16,452 for 2026), and can ask for extra tax to be taken off each pay.
- **Amounts taken off before tax.** Your employer subtracts some payroll deductions before calculating tax: registered pension plan contributions, union dues, RRSP or FHSA contributions through payroll (if it has reasonable grounds to believe you can deduct them), and the enhanced part of your CPP (the first additional contribution built into the regular rate, plus CPP2). So tax is worked out on less than your gross pay.

With two jobs at once, personal amounts you've claimed on a TD1 with one employer can't be claimed again with the other.

If the CRA gives you a letter of authority to reduce tax at source, your employer withholds less, by the amount in the letter. See [how bonuses are taxed](https://taxnotes.ca/guides/bonuses/) for when you can ask the CRA to reduce the tax withheld.

## If you work in Quebec

If your province of employment is Quebec, wherever you live:

- **QPP instead of CPP.** You contribute to the Quebec Pension Plan at 6.3% of earnings above $3,500, up to $74,600, plus a second additional contribution of 4% on earnings above that, up to $85,000.
- **Lower EI, plus QPIP.** EI is deducted at a reduced rate (1.3%), and a Québec Parental Insurance Plan premium (0.43%) is deducted as well.
- **Two income tax lines.** Your employer withholds federal tax and Quebec income tax, and sends the Quebec part to Revenu Québec.

## The figures at a glance

| Employee figure | 2025 | 2026 |
| --- | --- | --- |
| CPP rate | 5.95% | 5.95% |
| CPP basic exemption | $3,500 | $3,500 |
| CPP maximum pensionable earnings | $71,300 | $74,600 |
| CPP2 rate | 4% | 4% |
| CPP2 earnings ceiling | $81,200 | $85,000 |
| EI rate (outside Quebec) | 1.64% | 1.63% |
| EI maximum insurable earnings | $65,700 | $68,900 |

## What to check on your stub

- **Province of employment:** it sets the provincial tax and whether you pay CPP or QPP.
- **TD1 forms:** fill out new ones when you start a job or want to change what you claim.
- **Year-to-date CPP and EI:** if they stop late in the year, you've reached the maximum.
- **Two employers?** Any extra CPP or EI comes back when you file.

To see how your whole year's tax adds up, try the [income tax calculator](https://taxnotes.ca/calculators/income-tax/).

## Sources

1. [About the deduction of Canada Pension Plan (CPP) contributions](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/canada-pension-plan-cpp.html) (canada.ca)
2. [CPP contribution rates, maximums and exemptions](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/canada-pension-plan-cpp/cpp-contribution-rates-maximums-exemptions.html) (canada.ca)
3. [About the deduction of EI premiums](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/employment-insurance-ei.html) (canada.ca)
4. [About the deduction of income tax](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/income-tax.html) (canada.ca)
5. [Maximum Pensionable Earnings and Québec Pension Plan Contribution Rate (Revenu Québec)](https://www.revenuquebec.ca/en/businesses/source-deductions-and-employer-contributions/calculating-source-deductions-and-contributions/qpp-contributions/maximum-pensionable-earnings-and-contribution-rate/) (revenuquebec.ca)

Tax figures in this guide come from the TaxNotes.ca rates tables (https://taxnotes.ca/rates/), which cite the Canada Revenue Agency and, for Quebec, Revenu Québec.

Last reviewed: October 10, 2026

How to cite: "Reading your pay stub: CPP, EI and tax", TaxNotes.ca, last reviewed 2026-10-10, https://taxnotes.ca/guides/reading-your-pay-stub/. For a figure or rule, also cite the official source listed above.

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