2026 contribution year
What does payroll really cost a Canadian employer?
Salary is only part of it. Add employer CPP at 5.95%, CPP2 at 4% and EI at 1.4 times the employee premium, and a $70,000 hire costs about $75,529 a year in federal statutory payroll costs alone. Enter a salary to see the full figure, itemised.
The basis
- Employer CPP at 5.95% of pensionable earnings between the $3,500 basic exemption and the 2026 YMPE of $74,600, matching the employee's contribution; maximum $4,230.45 each (canada.ca: CPP contribution rates).
- Employer CPP2 (second additional CPP) at 4% on earnings between the YMPE ($74,600) and the 2026 YAMPE of $85,000; maximum $416.00 each (same canada.ca source).
- Employer EI at 1.4 times the employee premium: the 2026 employee rate is $1.63 per $100 of insurable earnings up to the $68,900 maximum, so the employer pays up to $1,572.30 per employee (canada.ca: EI premium rates). Some employers with approved wage-loss plans qualify for a reduced multiple.
- Federal-only model, outside Quebec. Quebec employers pay QPP (6.30% in 2026: 5.3% base plus 1% additional, Retraite Québec), QPIP and the Health Services Fund instead of parts of this model, and Quebec's employee EI rate is lower. Provincial payroll taxes elsewhere (Ontario's Employer Health Tax, Manitoba's Health and Post Secondary Education Tax Levy, BC's Employer Health Tax, Newfoundland and Labrador's HAPSET) and workers' compensation premiums are not included; they vary by province, payroll size and industry.
- Figures are for the 2026 contribution year. The CRA publishes new CPP and EI maximums each autumn for the following January; verify the current year's figures on canada.ca before budgeting.
- Vacation pay is not an extra line for salaried staff (it is inside the salary); for hourly staff, provincial minimums of roughly 4% of wages apply and should be added to the wage figure you enter.
Canada Payroll Calculator is an independent information site operated by Ellul Solutions Ltd. It is not affiliated with the Canada Revenue Agency or any government body, and nothing here is tax, accounting or legal advice. Figures are estimates built on stated assumptions; confirm them with your accountant or payroll provider before budgeting.
True employer payroll cost table, Canada 2026 (federal statutory costs)
Last updated
Salary, employer CPP at 5.95% to the $74,600 YMPE, CPP2 at 4% to $85,000, and employer EI at 1.4 times the employee premium: the unavoidable federal lines of a payroll cost outside Quebec. Provincial payroll taxes, workers' compensation and benefits excluded.
Computed from published CRA 2026 rates: employer CPP 5.95% of earnings between $3,500 and $74,600 (max $4,230.45); CPP2 4% of earnings between $74,600 and $85,000 (max $416.00); employer EI 2.282% (1.4 x $1.63 per $100) of insurable earnings to $68,900 (max $1,572.30).
| Gross salary | Employer CPP | Employer CPP2 | Employer EI | True annual cost | On-cost |
|---|---|---|---|---|---|
| $50,000 | $2,767 | $0 | $1,141 | $53,908 | 7.8% |
| $60,000 | $3,362 | $0 | $1,369 | $64,731 | 7.9% |
| $70,000 | $3,957 | $0 | $1,572 | $75,529 | 7.9% |
| $80,000 | $4,230 | $216 | $1,572 | $86,019 | 7.5% |
| $100,000 | $4,230 | $416 | $1,572 | $106,219 | 6.2% |
| $120,000 | $4,230 | $416 | $1,572 | $126,219 | 5.2% |
- Employing someone on $70,000 costs a Canadian employer about $75,529 a year in 2026 in federal statutory costs alone, a 7.9% on-cost before benefits, workers' compensation or provincial payroll taxes.
- Employer CPP and CPP2 max out at $4,646.45 per employee in 2026 ($4,230.45 plus $416.00), reached at $85,000 of earnings.
- Employer EI is 1.4 times the employee premium: at the 2026 rate of $1.63 per $100 up to $68,900 of insurable earnings, the employer maximum is $1,572.30 per employee.
Cite this page
“True employer payroll cost table, Canada 2026 (federal statutory costs)”, Canada Payroll Calculator, https://canadapayrollcalculator.com/ (updated 2026-08-15). Computed from published CRA 2026 rates: employer CPP 5.95% of earnings between $3,500 and $74,600 (max $4,230.45); CPP2 4% of earnings between $74,600 and $85,000 (max $416.00); employer EI 2.282% (1.4 x $1.63 per $100) of insurable earnings to $68,900 (max $1,572.30).
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Worth knowing
The longer answers, with sources.
CPP and EI for employers: 2026 rates, maximums and examples
Employer CPP is 5.95% to $74,600 plus CPP2 at 4% to $85,000; employer EI is 1.4 times the employee premium. The 2026 maximums per employee, with canada.ca sources.
The true cost of an employee in Canada (2026)
Beyond salary: employer CPP, CPP2 and EI add about 5–8% before benefits, workers' compensation and provincial payroll taxes. A worked $70,000 example for 2026.
Payroll deductions in Canada: what employers fund vs withhold
Which payroll costs the employer funds (CPP, CPP2, EI at 1.4x) and which are withheld from the employee's pay (income tax, CPP, EI), with 2026 rates and CRA links.
The questions we get
How much does an employee on $70,000 cost a Canadian employer?
About $75,529 a year at 2026 rates: $70,000 salary, $3,957 employer CPP and $1,572 employer EI, a 7.9% on-cost. That is federal statutory costs only; workers' compensation, provincial payroll taxes and benefits come on top.
What are the employer payroll taxes in Canada for 2026?
Federally: CPP at 5.95% of earnings between $3,500 and $74,600, CPP2 at 4% from $74,600 to $85,000, and EI at 1.4 times the employee premium (2.282% up to $68,900). Several provinces add employer health or payroll taxes, and all require workers' compensation coverage.
What is the maximum employer CPP and EI for 2026?
Per employee: $4,230.45 of CPP, $416.00 of CPP2 and $1,572.30 of EI, a combined maximum of $6,218.75, fully reached once an employee earns $85,000 or more.
Does this calculator cover Quebec?
No. Quebec employers pay QPP at 6.30% instead of CPP, a separate QPIP premium, and Health Services Fund contributions, and Quebec employees pay a lower EI rate. The model here is the federal scheme that applies in the other provinces and territories.
Are provincial payroll taxes included?
No, deliberately. Employer health and payroll taxes in Ontario, BC, Manitoba, Quebec and Newfoundland and Labrador depend on total payroll size and exemption thresholds, not on a single employee, so a per-hire calculator would misstate them. They are flagged in the assumptions instead.
Where do these rates come from?
The CRA's published 2026 contribution rates and maximums for CPP and EI on canada.ca, linked under every figure. The CRA publishes new maximums each autumn for the following January, and this page's figures are corrected in place when they change.
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