Question 1

What is CPP and how much do I contribute?

Accepted Answer

Canada Pension Plan is a mandatory retirement benefit. Employees contribute 5.95% on pensionable earnings between $3,500 and $71,300 (2025). Maximum annual contribution is $4,034.

Question 2

What is CPP2?

Accepted Answer

CPP2 (second additional CPP) applies at 4% on earnings between $71,300 and $81,200. Introduced in 2024, the maximum CPP2 contribution is $396 per year.

Question 3

What is EI and when does it max out?

Accepted Answer

Employment Insurance premiums are 1.64% of insurable earnings up to $65,700 (2025). Maximum annual EI premium is $1,077. EI covers job loss, maternity, parental, and sickness benefits.

Question 4

How much CPP does the employer pay?

Accepted Answer

Employers match the employee CPP contribution dollar for dollar. For EI, employers pay 1.4 times the employee premium.

Question 5

What is the maximum CPP contribution for 2025?

Accepted Answer

Maximum employee CPP1 contribution is $4,034. CPP2 adds up to $396 for earnings above $71,300. Combined maximum is $4,430. EI maximum is $1,077.

Question 6

Do self-employed pay both employee and employer CPP?

Accepted Answer

Yes. Self-employed Canadians pay both the employee and employer share of CPP, totalling 11.9% on earnings between $3,500 and $71,300. However, half is deductible as a business expense on your tax return.

Question 7

When do CPP and EI stop being deducted?

Accepted Answer

CPP stops when you reach the annual maximum pensionable earnings ($71,300 for CPP1, $81,200 for CPP2). EI stops at $65,700. If you earn $90,000, CPP and EI are fully deducted by September or October, then your net pay increases for the rest of the year.

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