CPP and EI contributions for employers in 2026, plus health tax and WSIB

Employer CPP for 2026 is 5.95% of pensionable earnings above the CAD 3,500 basic exemption and up to the CAD 74,600 maximum pensionable earnings, the same rate the employee pays. The employer’s maximum for the year is CAD 4,230.45 per employee, which is 5.95% of the CAD 71,100 band between those two figures. CRA publishes the rates on its CPP contribution rates and maximums page.

The 5.95% is built from two pieces: the base rate of 4.95% and the first additional contribution of 1.00% that came with the CPP enhancement. For the employer the split changes nothing, since both pieces are paid together on the same earnings. For the employee it shows up at tax time, because the 1% portion is deductible from income while the base portion earns a non-refundable credit.

Above CAD 74,600 a second layer begins. CPP2 charges 4% to the employer and 4% to the employee on earnings between CAD 74,600 and CAD 85,000, so the extra employer cost stops at CAD 416 in 2026. It applies to any hire whose salary crosses the first ceiling, and the guide to the CPP2 second earnings ceiling covers how to budget for it.

Past CAD 85,000 nothing more is due to either plan for 2026. An employer therefore pays CAD 4,646.45 in combined CPP and CPP2 for a hire on CAD 120,000, exactly as for one on CAD 85,000, and the percentage cost of pensions falls as salaries rise.

EI costs an employer 1.4 times the employee’s premium. For 2026 the employee rate is 1.63% (CAD 1.63 per CAD 100) on insurable earnings up to CAD 68,900, which puts the employer rate at 2.282%. ESDC publishes the employer figure rounded to CAD 2.28 per CAD 100, while the published maximums use the exact multiple, so an employer pays at most CAD 1,572.30 a year per person against the employee’s CAD 1,123.07.

Because the EI ceiling of CAD 68,900 sits below the CPP ceiling of CAD 74,600, a well-paid employee reaches the EI maximum first. Take a CAD 85,000 salary paid in 26 equal bi-weekly instalments: EI premiums stop part-way through the 22nd pay, base CPP stops in the 23rd, and CPP2 starts in that same 23rd pay and runs to the year end. The employer’s cost per payslip is therefore higher in spring than in December, which matters when a finance team budgets month by month and wonders why the last invoices of the year come in lower.

Quebec has its own EI rate. In 2026 employees pay CAD 1.30 per CAD 100 of insurable earnings and employers CAD 1.82, lower than elsewhere because the Québec Parental Insurance Plan (QPIP) pays maternity and parental benefits in that province instead of EI.

Provincial health levies come on top of CPP and EI, and each province sets its own. In Ontario, the Employer Health Tax (EHT) is charged at a rate set by the size of total Ontario remuneration. It starts at 0.98% for payrolls up to CAD 200,000, climbs through steps from 1.101% to 1.829% between CAD 200,000.01 and CAD 400,000, and reaches 1.95% above CAD 400,000. An eligible employer can exempt CAD 1 million of remuneration, although the exemption disappears once the associated group’s combined Ontario remuneration is above CAD 5 million. The annual return is due on 15 March, with monthly instalments once payroll passes CAD 1.2 million.

In an EOR arrangement the EHT is worked out on the employer of record’s Ontario payroll, because the EOR is the employer. The rate and any exemption follow the employer of record’s size, which the client does not control, and an exemption is shared across the EOR’s whole payroll instead of attaching to one person. A prudent budget uses the top rate of 1.95%: on a CAD 85,000 salary that is CAD 1,657.50 a year, the figure used in the worked example further down.

BC’s Employer Health Tax exempts employers with CAD 1,000,000 or less of BC remuneration, applies a 5.85% notch rate between CAD 1,000,000.01 and CAD 1,500,000, and charges 1.95% on total BC remuneration above CAD 1.5 million. Quebec employers pay the Health Services Fund contribution at rates from 1.65% to 4.26%, set by sector and total payroll, with a CAD 7.8 million threshold for 2026. For Alberta, the only provincial employer cost modelled here is WCB-Alberta, so confirm any other levy with the province before you set a budget.

Workers’ compensation premiums are set by industry class and charged per CAD 100 of insurable payroll, up to an annual maximum. In Ontario, the WSIB’s 2026 average rate is CAD 1.23 per CAD 100, on insurable earnings up to CAD 121,700 (CAD 117,000 in 2025). Office-based classes sit well below that average: CAD 0.18 for Class L, which covers professional, scientific and technical work, CAD 0.41 for Class J (information and culture) and CAD 0.72 for Class K (finance, management and leasing). Class M is CAD 1.43.

The class follows the business activity, and for an EOR placement the employer of record’s WSIB account and classification apply. That uncertainty belongs in the budget. At Class L, WSIB on a CAD 85,000 salary comes to CAD 153 for the year, while the 2026 average rate would put it at CAD 1,045.50. Ask the provider which class it expects to use for your role before you sign off the headcount plan.

Outside Ontario the averages differ. WorkSafeBC’s 2026 average base premium rate is CAD 1.55 per CAD 100 of assessable payroll, unchanged for the ninth year running. WCB-Alberta’s 2026 average collected rate is CAD 1.46 per CAD 100 of assessable earnings, 3.5% higher than in 2025. In Quebec, occupational health and safety cover sits with the CNESST. Each employer pays the rate for its own class, so an average is a rough guide at best.

The WSIB ceiling matters for senior hires. Premiums stop at CAD 121,700 of insurable earnings, so a CAD 150,000 salary in Class L carries CAD 219.06, the same as any salary above the cap. Ontario EHT is charged on total remuneration instead, so at 1.95% that salary carries CAD 2,925.

For a 2026 Ontario hire paid CAD 85,000, the employer’s statutory contributions and levies come to CAD 8,029.25, taking the full employment cost to CAD 93,029.25. That is an on-cost of 9.45% before any benefits or provider fee. The assumptions are one Ontario employer for the full calendar year, no other income, no pension or benefit plan, vacation pay included in salary, Employer Health Tax charged at the full 1.95% without any exemption, and WSIB premiums in Class L.

• CAD 4,230.45 of CPP, from 71,100 of pensionable earnings at 5.95%
• CAD 416.00 of CPP2, from the 10,400 slice above 74,600 at 4%
• CAD 1,572.30 of EI, from 68,900 of insurable earnings at 1.4 times 1.63%
• CAD 1,657.50 of Employer Health Tax, from the full 85,000 at 1.95%
• CAD 153.00 of WSIB, from the full 85,000 at CAD 0.18 per CAD 100

The federal lines (CPP, CPP2 and EI) come to CAD 6,218.75, roughly 77% of the statutory on-cost. Put the monthly EOR fee, from USD 560, on top, roughly CAD 790.56 using ECB rates for 24 September 2026 or CAD 9,486.72 over the year, and the total reaches CAD 102,515.97. The full cost breakdown for a Canadian employee adds the employee’s side of the payslip.

The same salary in Quebec reshapes the federal lines. QPP at 6.30% reaches its maximum of CAD 4,479.30, the second additional QPP contribution adds CAD 416, the Quebec employer EI rate of CAD 1.82 per CAD 100 gives CAD 1,253.98, and QPIP at 0.602% adds CAD 511.70 (the QPIP ceiling is CAD 103,000). That is CAD 6,660.98 before the Health Services Fund, the labour-standards contribution and CNESST premiums, which depend on the employer’s payroll and sector and are left out here.

Group RRSPs, workplace pension plans and health and dental cover sit outside the statutory figures, and the worked example in this guide includes none of them. If you want to offer them, ask the provider which plans it can enrol your hire in, what each costs per head, and how any employer contribution appears on the payslip.

Two rules make it sensible to plan benefits at the start. In Ontario, benefits must continue through the statutory notice period when employment ends, so a plan you introduce becomes part of the exit cost as well as the running cost. For a hire in Quebec, plan booklets and enrolment forms are documents about working conditions, and employers must communicate those to staff in French.

When you compare providers, check whether the quoted monthly price includes benefits administration or covers payroll only, and whether plan premiums are passed through at cost. Our fee does not move with salary: from USD 560 for each employee each month, and the pricing page explains how it is charged.

Employer CPP and EI are remitted to CRA together with the employee deductions and the income tax withheld from each pay. A regular remitter pays each month’s deductions on or before the 15th day after that month closes. Threshold 1 remitters, with average monthly withholding of CAD 25,000 to 99,999.99, pay up to twice a month, and those at CAD 100,000 or more as often as four times in a month. The category follows the legal employer’s total withholding, so with an EOR it is the employer of record’s schedule that applies.

Late or missing deductions are expensive. CRA adds a penalty of 10% of any CPP, EI or income tax left undeducted, doubling to 20% where the failure is repeated and made knowingly or through gross negligence, and it collects the arrears with interest on top. At year end the contributions appear on T4 slips, due by the last day of February. For Quebec staff, QPP, QPIP and provincial income tax are handled with Revenu Québec.

With Employer of Record Canada, the payroll account, the remittances and the year-end slips belong to us as the employer of record for your hire. What stays with you is the budget line: CAD 8,029.25 of statutory cost on a CAD 85,000 Ontario salary in 2026, plus the monthly fee and the set-up fee that is normally charged once.