2026 CPP2 quick answer: Maximum employee CPP2 contribution is $416.00 for 2026, up from $396.00 in 2025. CPP2 applies at 4.00% on pensionable earnings between $74,600 (YMPE) and $85,000 (YAMPE). The employer matches. Full reference and the 3 traps below.
If you have run payroll in Canada for more than a few years, you have watched CPP quietly become complicated. The base contribution you have always withheld is still there... Then the CPP enhancement phased in... Then CPP2 arrived in 2024 with its own ceiling, its own rate, and its own column on the pay stub. For 2026, the numbers shift again, and the people still withholding on last year's assumptions are the ones who will hear about it in July when an employee's first pay-stub review lands in your inbox.
The rules themselves are not hard. The trouble is that CPP2 does not behave like the thing most Canadian employers already know how to calculate, and the payroll templates passed down from 2021 do not know it exists.
Here is the table I keep pinned for 2026.
| What | 2026 | 2025 | Notes |
|---|---|---|---|
| YMPE (Year's Maximum Pensionable Earnings) | $74,600 | $71,300 | Ceiling for base CPP |
| YAMPE (Year's Additional Maximum Pensionable Earnings) | $85,000 | $81,200 | Ceiling for CPP2 |
| Basic exemption | $3,500 | $3,500 | Unchanged |
| Base CPP rate (employee) | 5.95% | 5.95% | Applies on earnings between $3,500 and $74,600 |
| Base CPP rate (employer) | 5.95% | 5.95% | Matched |
| CPP2 rate (employee) | 4.00% | 4.00% | Applies on earnings between $74,600 and $85,000 |
| CPP2 rate (employer) | 4.00% | 4.00% | Matched |
| Max base CPP (employee, 2026) | $4,230.45 | $4,034.10 | (74,600 − 3,500) × 5.95% |
| Max CPP2 (employee, 2026) | $416.00 | $396.00 | (85,000 − 74,600) × 4.00% |
| Total max CPP + CPP2 (employee) | $4,646.45 | $4,430.10 | Matched by employer |
That table looks tidy. The mistakes that follow are not.
The three CPP2 mistakes I keep seeing
Mistake 1 — Using 5.95% for CPP2. This is the one I see most. An employee crosses the YMPE mid-year, the payroll software flips them into CPP2 mode, and someone reviewing the setup notices a different line on the pay stub and assumes the rate carried over. CPP2 is 4.00%, not 5.95%. On an $85,000 salary that is about $208 per employee of over-withholding, matched by $208 of over-contribution from the employer. The employee gets the refund at tax time. The employer does not — that money is gone.
Mistake 2 — Forgetting the $3,500 basic exemption. A new payroll stood up from scratch will sometimes compute CPP as 5.95% of gross pay instead of 5.95% of (gross minus the annualized $3,500 basic exemption). The numbers look close enough that it rarely gets caught in a spot check, but it compounds across every pay period for every employee. At year end, the company has over-contributed by about $208 per employee ($3,500 × 5.95%). Again, employees claw it back on their T1, and the employer eats the match.
Mistake 3 — Running Quebec employees on CPP. Employees whose province of work is Quebec are on QPP, not CPP. The rates are different (QPP is higher — roughly 6.4% base plus the QPP2 enhancement), the remittance goes to Revenu Québec rather than the CRA, and the T4A-slip reporting splits out differently. A growing company that opens its first Quebec office and keeps running those employees on the CPP setup ends up with two problems: the contributions are short, and they are being remitted to the wrong agency. That is the kind of error that generates two separate notices, not one.
What this costs when it goes wrong
Over-contribution is an accounting loss, not a compliance violation. Under-contribution is the other way around. If a CRA payroll review finds a tenant whose CPP2 was withheld at 4.00% but whose base CPP was under-withheld because the YMPE bump from $71,300 to $74,600 never got applied, that is a source deduction shortfall with interest running from the day it started.
Quebec misremit is its own category of trouble. Revenu Québec does not share its ledger with the CRA in real time, so the money you thought you were paying in source deductions sits on one side of the country while the agency you owe it to sends you a statement showing zero.
The fix is not "update the rate in January"
The numbers change every November when CRA publishes the new year's YMPE and YAMPE. That bump needs to land in your payroll system, and it needs to differentiate between base CPP and CPP2, and it needs to know that your Quebec payroll runs on QPP instead. A template a bookkeeper ported over from 2023 is not going to do any of that on its own.
You solve this with a system that gets the annual rate update pushed to it, knows which plan applies by the employee's province of work, and tracks year-to-date pensionable earnings against both ceilings so the CPP2 line starts when it should and stops when it should. Those are not exotic requirements. They are what payroll in Canada is.
Use this table in the meantime. And, if your payroll setup is still running off a spreadsheet column that was last touched before CPP2 existed, that is the signal.