What is the difference between CPP1 and CPP2?

CPP1 is the base contribution on pensionable earnings between the basic exemption and the first ceiling (YMPE). CPP2 is an additional contribution on earnings between the first ceiling and a higher second ceiling (YAMPE), phased in from 2024.

What is the basic exemption?

The first 3,500 CAD of annual earnings is exempt from CPP. Contributions are only calculated on pensionable earnings above this amount, up to the yearly maximum.

How much does an employer contribute?

Employers match the employee's CPP1 and CPP2 contributions dollar for dollar. So the total cost of an employee to the employer includes the employer's matching share on top of gross pay.

Do self-employed people pay more CPP?

Yes. Self-employed individuals pay both the employee and employer halves, so their effective rate is double that of an employed worker on the same income.

Are these the official current rates?

The tool uses the 2024 CPP enhancement rates and ceilings as defaults so you can see the method clearly. Confirm the exact year's figures with the Canada Revenue Agency before filing or remitting.

Canada CPP Contribution Calculator

The Canada Pension Plan (CPP) is a contributory, earnings-related social insurance program. Employees and employers each contribute a percentage of pensionable earnings, while self-employed people pay both shares. Since the CPP enhancement began phasing in, contributions are split into a base tier (CPP1) and an additional tier (CPP2) for higher earners. This calculator applies both tiers so payroll teams and freelancers can estimate annual contributions.

How it works

CPP contributions are calculated on pensionable earnings, which is employment income above the basic exemption of 3,500 CAD per year, capped at the yearly maximum pensionable earnings.

CPP1 (base): Take earnings between 3,500 (the basic exemption) and the first ceiling (YMPE). Multiply by the base rate (5.95% employee / 5.95% employer).
CPP2 (additional): Take earnings between the first ceiling (YMPE) and the second ceiling (YAMPE). Multiply by the additional rate (4.00% each).
Total: Add CPP1 and CPP2. Employers match the employee amount; self-employed individuals pay both halves combined.

Example

On 75,000 CAD of pensionable earnings with a YMPE of 68,500 and YAMPE of 73,200:

CPP1 base: (68,500 − 3,500) × 5.95% = 3,867.50
CPP2 additional: (73,200 − 68,500) × 4.00% = 188.00
Employee total: 4,055.50; employer matches the same; self-employed pays 8,111.00.

Notes

Earnings below 3,500 produce no contribution because of the basic exemption. Earnings above the second ceiling (YAMPE) are not subject to further CPP. Always confirm the exact rates and ceilings for the relevant tax year with the Canada Revenue Agency, as they are indexed annually. Everything is computed locally in your browser.