What is CPP2?
CPP2 — the second additional CPP contribution — was introduced in 2024 as an extra tier on top of base CPP. It only applies to earnings above the YMPE (Year's Maximum Pensionable Earnings), up to a second, higher ceiling called the YAMPE (Year's Additional Maximum Pensionable Earnings). If your income is below the YMPE, CPP2 doesn't apply to you at all — you only pay base CPP.
2026 CPP & CPP2 numbers
| Component | 2026 figure |
|---|---|
| Basic exemption | $3,500 |
| YMPE (base CPP ceiling) | $74,600 |
| Base CPP rate | 5.95% |
| Maximum base CPP | $4,230.45 |
| YAMPE (CPP2 ceiling) | $85,000 |
| CPP2 rate | 4% |
| Maximum CPP2 | $416.00 |
| Maximum total CPP (employee) | $4,646.45 |
Worked example
Say you earn $90,000 in 2026. Base CPP applies to income between $3,500 and $74,600 at 5.95%, hitting its max of $4,230.45. CPP2 then applies to the next band — from $74,600 up to your income (capped at $85,000) — at 4%. On $90,000, you're above the $85,000 YAMPE, so you pay the full $416.00 of CPP2. Total CPP: $4,646.45.
Why CPP2 exists
CPP2 was phased in (2024–2025) to gradually increase how much of a higher earner's income is covered by CPP, boosting retirement benefits for those who contribute at the higher tier. It's separate from — and in addition to — the base CPP contribution most people are already familiar with.
CPP and CPP2 at different incomes (2026)
| Employment income | Base CPP | CPP2 | Total (employee) | Self-employed |
|---|---|---|---|---|
| $50,000 | $2,766.75 | $0 | $2,766.75 | $5,533.50 |
| $74,600 | $4,230.45 | $0 | $4,230.45 | $8,460.90 |
| $80,000 | $4,230.45 | $216.00 | $4,446.45 | $8,892.90 |
| $85,000 or more | $4,230.45 | $416.00 | $4,646.45 | $9,292.90 |
CPP2 only adds a few hundred dollars at most, but it changes when your paycheque goes up. Base CPP usually maxes out partway through the year for anyone above $74,600, which used to mean a raise in take-home pay that fall. Now CPP2 keeps deducting until you reach $85,000 of earnings, so that bump arrives later and is slightly smaller.
CPP2 is a deduction, not just a credit
Not all CPP is treated the same at tax time. Contributions at the original 4.95% base rate earn a non-refundable tax credit. The "enhanced" part (the extra 1% added to the base rate since 2019, plus all of CPP2) is a deduction from income, the same way an RRSP contribution is.
For an employee at the maximum, the enhanced portion is $4,230.45 × (1 ÷ 5.95) = $711.00, plus $416.00 of CPP2. That's $1,127 deducted from taxable income. In a 30% marginal bracket, the deduction gives back about $338 at tax time, so CPP2's real cost is lower than the payroll figure. Tax software handles the split automatically, but it explains why your refund looks different from what you expected.
Two jobs? You may overpay
Each employer withholds CPP and CPP2 as if it were your only employer, up to the annual maximums. If you have two jobs, each paying, say, $50,000, both will deduct base CPP, and together they may take more than the $4,230.45 maximum. CPP2 works the same way. Any overpayment is refunded when you file your return; CRA calculates it from your T4 slips. The same applies if you change jobs mid-year and your new employer starts withholding from zero.
What you get for it
CPP2 isn't just a tax: it buys a larger CPP retirement pension. When the enhancement is fully phased in for someone who contributes their whole career, CPP is designed to replace about one-third of earnings up to the higher YAMPE ceiling, up from one-quarter of earnings up to the YMPE under the old plan. People early in their careers gain the most, because the larger benefit builds up with each year of enhanced contributions. For how CPP, CPP2 and EI fit together on your pay stub, see our CPP, CPP2 and EI guide.
Frequently asked questions
Do I pay CPP2 if I earn under $74,600?
No. CPP2 only applies to income above the YMPE ($74,600 in 2026). Below that, you only pay base CPP.
What if I'm self-employed?
Self-employed workers pay both the employee and employer portions — effectively double the rate on both base CPP and CPP2. Check the box above to see that estimate.
Is Quebec's QPP the same?
Quebec runs its own plan (QPP) rather than CPP, but it mirrors the same 2026 thresholds and CPP2-equivalent second tier.
Is this official CRA guidance?
No. Calcova is an independent estimator using published 2026 CPP/CPP2 figures. Not tax advice — verify with the CRA or a tax professional.
Why did my paycheque drop in the fall?
It probably didn't drop. More likely your base CPP had maxed out and then CPP2 started deducting from earnings above $74,600 until you reached $85,000. Once CPP2 is maxed too, both deductions stop for the rest of the calendar year.
Is CPP2 tax-deductible?
Yes. All CPP2 contributions, plus the enhanced portion of base CPP, are deducted from your taxable income rather than claimed as a credit. At the 2026 maximum that is $1,127 of deductions for an employee.
Related calculators
CPP & EI calculator → — all three payroll deductions (CPP, CPP2 and EI) for 2026 in one place.
FHSA vs RRSP calculator → — compare which account gets you further toward a first home.
Take-home pay calculator → — see your full paycheck after CPP, EI and tax.