How CPP Works in 2026

What is CPP?

The Canada Pension Plan (CPP) is a mandatory retirement savings program run by the federal government. Every employed Canadian outside Quebec contributes a percentage of their earnings to CPP throughout their working life. In return, you receive a monthly pension when you retire, typically starting at age 65.

Quebec has its own version called the Quebec Pension Plan (QPP), which works similarly.

How Much Do You Pay in 2026?

In 2026, you contribute 5.95% of your pensionable earnings to CPP1. Your employer matches this contribution dollar for dollar — so the total contribution to your pension is actually double what comes off your paycheque.

There are two tiers in 2026:

• CPP1: 5.95% on earnings between $3,500 and $74,600. Maximum contribution: $4,230.45/year
• CPP2: 4% on earnings between $74,600 and $85,000. Maximum contribution: $416.00/year

The $3,500 basic exemption means the first $3,500 of your income is not subject to CPP deductions.

When Does CPP Stop Being Deducted?

Once you hit the annual maximum contribution, your employer stops deducting CPP for the rest of the year. This means you get a "raise" mid-year — your take-home pay increases for the remaining pay periods.

For most Canadians earning above $74,600, CPP stops being deducted sometime between August and October.

Do You Get CPP Back?

Yes — but not all at once. CPP contributions build up your entitlement to a monthly pension at retirement. The maximum CPP retirement pension in 2026 is approximately $1,364/month if you contributed the maximum for 39 years.

You can also receive CPP disability benefits if you become unable to work, and CPP survivor benefits go to your spouse or children if you pass away.

CPP Tax Credit

Your CPP contributions are not fully taxable. The federal government gives you a 15% non-refundable tax credit on your CPP contributions, which reduces your tax bill at the end of the year.

Key 2026 CPP Numbers