Your paycheque is about to get bigger — and it isn't a raise

Every fall, a large group of Canadians gets a small windfall nobody announces. Payroll deductions for CPP and EI aren't percentages of your pay — they're percentages up to an annual ceiling. Once you've paid the maximum for the year, they stop, and your net pay jumps for the rest of the calendar year.

The three ceilings

For 2026, the most an employee can pay is fixed:

• EI: 1.63% of insurable earnings up to $68,900 — maximum $1,123.07.
• CPP (base): 5.95% of pensionable earnings between $3,500 and $74,600 — maximum $4,230.45.
• CPP2: 4% on the slice between $74,600 and $85,000 — maximum $416.

Add them up and $5,769.52 is the ceiling on your 2026 payroll deductions, no matter what you earn. Your employer matches the CPP and pays 1.4× the EI.

These are annual limits, not monthly ones. Hit the ceiling in September and the deduction disappears for the rest of the year — then restarts on January 1.

When it happens at your salary

Assuming steady pay through the year:

• $120,000: EI is done in late July, base CPP in early August, and CPP2 by mid-September. From then on, roughly $740 a month stops coming off.
• $95,000: EI finishes mid-September, base CPP mid-October, CPP2 in late November. December's pay is about $580 lighter on deductions.
• $70,000: EI runs out just before year-end. CPP never maxes — you pay 5.95% on every pensionable dollar all year, and CPP2 never starts.
• Under $68,900: no ceiling is ever reached. Deductions run all twelve months.

The pattern is simple: the higher your salary, the earlier in the fall your take-home quietly steps up, and the bigger the step. Curious where those cutoffs sit relative to Canadian earnings generally? The income percentile tool puts $68,900 and $85,000 in context.

How much actually lands in your account

Close to the full amount. CPP and EI contributions carry a tax credit, and the enhanced slice of CPP is deductible — but CRA's payroll formulas spread both across all twelve pay periods rather than reconciling them the month you hit the ceiling. So the drop in deductions shows up in net pay largely intact.

To see what your own numbers look like with and without those lines, run the take-home pay calculator.

Two things worth doing about it

• Name the money before it arrives. A $740 bump for four months is roughly $3,000. Set up an automatic transfer to a TFSA, RRSP, or mortgage prepayment for the fall months, and it never gets absorbed into ordinary spending.
• Don't treat December as your baseline. January restores every deduction at once, and the ceilings themselves rise most years. A budget built on a ceiling-free paycheque breaks in the first week of the new year.

If you're self-employed, none of this timing applies. You pay both halves — $8,460.90 base CPP plus $832 of CPP2 in 2026 — through instalments or at filing, and EI only if you've opted into special benefits.

The takeaway

The fall paycheque bump is real, predictable, and temporary. It isn't found money — it's the tail end of a bill you already paid in full, front-loaded into the first three quarters of the year. Knowing the month it arrives is what turns it from an unnoticed rounding error into a deliberate few thousand dollars.

Contribution figures: CRA, CPP contribution rates, maximums and exemptions, and the Canada Employment Insurance Commission's 2026 premium rate announcement.