What Are CPP and EI?

The Canada Pension Plan (CPP) is a retirement savings program funded through payroll contributions. If you work in Canada (outside Quebec), your employer deducts CPP contributions and matches them. Employment Insurance (EI) is a program that provides temporary income support if you lose your job, are sick, or need to care for a newborn or seriously ill family member. Your T4 slip shows the CPP contributions and EI premiums deducted from your pay. You claim these as credits on your federal tax return. Self-employed individuals pay both the employee and employer portions of CPP - roughly twice the amount of an employee. You can deduct half of these contributions on your return. Since 2019, CPP contributions have been gradually increasing as part of the CPP enhancement. This means higher contributions now, but a larger pension later.