Every Canadian employee contributes to the Canada Pension Plan (CPP) and Employment Insurance (EI) from every paycheque. Here's exactly how much is deducted, how the calculations work, and what you get in return.
Total CPP + EI:
| Detail | Amount |
|---|---|
| Employee contribution rate (CPP1) | 5.95% |
| Employer contribution rate (CPP1) | 5.95% (matches employee) |
| Basic exemption | $3,500 |
| Maximum pensionable earnings | $68,500 |
| Maximum employee CPP1 contribution | $3,867.50 |
| CPP2 rate (on $68,500–$73,200) | 4.00% |
| Maximum CPP2 contribution | $188.00 |
| Detail | Amount |
|---|---|
| Employee EI premium rate | 1.64% |
| Employer EI premium rate | 2.296% (1.4x employee rate) |
| Maximum insurable earnings | $63,200 |
| Maximum employee EI premium | $1,049.12 |
| Quebec employee EI rate | 1.32% |
| Income | CPP1 | CPP2 | EI | Total |
|---|---|---|---|---|
| $20,000 | $981.25 | $0 | $328.00 | $1,309.25 |
| $40,000 | $2,171.25 | $0 | $656.00 | $2,827.25 |
| $60,000 | $3,361.25 | $0 | $984.00 | $4,345.25 |
| $68,500 | $3,867.50 | $0 | $1,049.12 | $4,916.62 |
| $73,200+ | $3,867.50 | $188.00 | $1,049.12 | $5,104.62 |
CPP contributions build your retirement pension. The maximum CPP retirement pension for 2025 is approximately $1,364/month at age 65, if you contributed at the maximum for 39+ years. The average CPP payment is much lower — around $760/month — because most people don't contribute at the maximum for their entire career. CPP also provides disability benefits and survivor benefits for your dependants.
EI provides income replacement if you lose your job through no fault of your own, become sick, have a baby, or care for a family member. The benefit is 55% of your insurable earnings, up to a maximum of $695/week in 2025 (based on the $63,200 cap × 55% ÷ 52). Most claimants must work 420–700 hours in the previous 52 weeks to qualify.
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Get KOHO Free — Use Code 45ET55JSYASelf-employed Canadians don't pay EI premiums (unless they opt in for access to special benefits like parental leave). However, they pay both the employee AND employer share of CPP — effectively 11.9% instead of 5.95%, on the same pensionable earnings. This is a significant hidden cost of self-employment that many new freelancers don't anticipate.