In Canada, CPP (Canada Pension Plan) and EI (Employment Insurance) contributions are shared between you and your employer, but not equally. Your employer deducts your employee portion directly from your paycheck, while also paying their own employer contribution on your behalf. Understanding how this split works is key to knowing what to expect in your net pay and how these mandatory programs protect your financial future. Canada Pension Plan contributions are divided as follows: - Employee contribution: You pay 5.95% of your eligible earnings (in 2026) - Employer contribution: Your employer pays a matching 5.95% of your earnings - Maximum pensionable earnings: The ceiling changes each year; for 2026, this amount is indexed annually by the CRA The employee portion is withheld from your paycheck before you see your net pay. Your employer's contribution is a cost to the business but does not appear on your paycheck. Both contributions go into the same CPP fund managed by the Canada Pension Plan Investment Board. There's also a CPP enhancement in effect as of 2024, which means additional contributions on top of the base rate. This enhancement gradually increases employee and employer contributions by 0.05% per year until 2029.
No, CPP and EI contributions are mandatory for most employees in Canada. The only exception is CPP contributions once you reach age 65 and retire, or in very limited circumstances. You cannot reduce or avoid these deductions.
Your employer's contributions do not appear on your T4 slip. Your T4 shows only the employee portions you paid. Employer contributions are a business cost and are tracked separately by the CRA.
If you had more than one employer, you may have over-contributed to CPP and EI. You can claim a credit for excess CPP contributions on your tax return, and excess EI is automatically refunded when you file. Use our [Canadian Income Tax Calculator](/tools/tax-calculator) to estimate any refund.
Employee CPP contributions are not tax deductible, but they do count as an allowable deduction on your tax return to reduce your taxable income. You'll see a CPP contribution deduction listed on your Notice of Assessment.
Your CPP retirement benefit depends on your contribution history and age at which you start claiming. You can estimate your benefit using Service Canada's online tools, or log into My Service Account to see your projected pension amount.