March 22, 2026
2025 CPP and EI Rates, Maximums, and What They Mean for Your Paycheque
Complete guide to 2025 CPP1, CPP2, and EI rates, the YMPE and YAMPE ceilings, maximum contributions, and how Quebec differs with QPIP.
Canada Pension Plan (CPP) and Employment Insurance (EI) contributions are deducted from virtually every paycheque in Canada. For 2025, the Canada Revenue Agency has set new rates and maximum earnings levels. Here is everything employees, employers, and the self-employed need to know.
CPP1 — The Base Canada Pension Plan
The first tier of CPP applies to employment earnings between the basic exemption and the Year’s Maximum Pensionable Earnings (YMPE).
| Parameter | 2025 |
|---|---|
| Employee rate | 5.95% |
| Employer rate | 5.95% (matching) |
| Basic exemption | $3,500 |
| YMPE | $71,300 |
| Maximum employee contribution | $4,034.10 |
| Maximum employer contribution | $4,034.10 |
| Maximum self-employed contribution | $8,068.20 |
Formula for employees:
CPP1 = (min(employment income, $71,300) − $3,500) × 5.95%
The maximum employee contribution of $4,034.10 is reached when earnings hit $71,300. Above that threshold, no further CPP1 is deducted — but CPP2 begins.
CPP2 — The Enhanced Second Tier
The CPP2 enhancement was introduced in 2024 and applies to earnings between the YMPE and the Year’s Additional Maximum Pensionable Earnings (YAMPE).
| Parameter | 2025 |
|---|---|
| Employee rate | 4.00% |
| Employer rate | 4.00% (matching) |
| YAMPE | $81,900 |
| Maximum employee contribution | $428.00 |
| Maximum employer contribution | $428.00 |
| Maximum self-employed contribution | $856.00 |
Formula for employees:
CPP2 = (min(employment income, $81,900) − $71,300) × 4.00%
CPP2 applies only on earnings between $71,300 and $81,900 — a band of $10,600. The maximum CPP2 contribution is $428.00. Unlike CPP1, there is no basic exemption for the CPP2 calculation — it begins immediately at the YMPE.
Combined CPP Maximum (2025)
| Contributor | CPP1 Max | CPP2 Max | Total Max |
|---|---|---|---|
| Employee | $4,034.10 | $428.00 | $4,462.10 |
| Employer | $4,034.10 | $428.00 | $4,462.10 |
| Self-employed | $8,068.20 | $856.00 | $8,924.20 |
Self-employed Canadians pay both the employee and employer share of CPP, but can deduct the employer-equivalent portion on their T1.
Employment Insurance (EI) — 2025
EI premiums are calculated as a percentage of insurable earnings up to the Maximum Insurable Earnings (MIE).
| Parameter | 2025 |
|---|---|
| Employee premium rate | 1.64% |
| Employer premium rate | 2.296% (1.4× employee rate) |
| Maximum insurable earnings (MIE) | $65,700 |
| Maximum employee premium | $1,077.48 |
| Maximum employer premium | $1,508.47 |
Formula for employees:
EI = min(employment income, $65,700) × 1.64%
Employers pay 1.4 times the employee rate because the EI program covers both employment insurance benefits and parental leave.
Quebec: QPIP and Reduced EI Rate
Quebec has its own parental insurance program — the Quebec Parental Insurance Plan (QPIP) — which replaces the parental benefits component of federal EI. Because of this, Quebec employees and employers pay a lower federal EI rate.
| Parameter | Quebec 2025 | Rest of Canada 2025 |
|---|---|---|
| Employee EI rate | 1.32% | 1.64% |
| Employer EI rate | 1.848% | 2.296% |
| Maximum employee EI premium | $867.24 | $1,077.48 |
Quebec workers also pay QPIP premiums separately. The QPIP employee rate for 2025 is 0.494% on insurable earnings up to $98,000, for a maximum QPIP employee premium of approximately $484.12.
How CPP2 Benefits You in Retirement
CPP2 contributions generate a separate, additional pension on top of your base CPP retirement benefit. The CPP2 benefit is calculated at a 33.33% replacement rate on the enhanced earnings band — compared to 25% under CPP1. Full CPP2 benefits will phase in over time as Canadians accumulate years of CPP2 contributions.
Impact on Your Net Pay
For a Canadian employee in 2025 earning more than $81,900, the maximum combined payroll deductions are:
| Deduction | Maximum |
|---|---|
| CPP1 | $4,034.10 |
| CPP2 | $428.00 |
| EI (outside Quebec) | $1,077.48 |
| Total | $5,539.58 |
This is in addition to income tax withholdings. Employees who stop working partway through the year may have over-contributed to CPP or EI if they change employers; any excess is refunded when you file your T1.
Self-Employed Considerations
Self-employed individuals pay both the employee and employer share of CPP (no EI unless they voluntarily opt in). For 2025:
- Total CPP1 + CPP2 self-employed maximum: $8,924.20
- The employer-equivalent CPP1 portion ($4,034.10) is deductible on line 22200 of the T1
- The employer-equivalent CPP2 portion ($428.00) is also deductible
This deduction effectively reduces the net cost of CPP contributions for the self-employed.
Sources
Use our calculators to apply these concepts to your own income. Tax information is for general guidance only — consult a CPA for advice specific to your situation.
Tax rates and thresholds sourced from the Canada Revenue Agency (CRA). Last verified for the 2025 tax year.