Quick Answer
CPP2 is a second CPP contribution of 4% (employee) on the part of your income that falls between the first earnings ceiling (YMPE) and a higher second ceiling (YAMPE). In 2025 it applies between $71,300 and $81,200, costing higher earners up to about $396 extra per year on top of regular CPP. The ceilings rise again in 2026, so anyone earning above the first ceiling will see CPP2 on their pay.
What is CPP2?
If you earn a higher income, you may have noticed a new line on your pay stub: a second CPP contribution, often labelled CPP2. It is not an error — it is the final stage of the CPP enhancement that Canada has been phasing in since 2019.
Regular CPP takes 5.95% of your pensionable earnings up to the first ceiling. CPP2 adds a second 4% contribution on the slice of income between that first ceiling and a higher second ceiling. You only pay it if you earn above the first ceiling.
CPP2 in 2025 vs 2026
The two ceilings have official names: the YMPE (Year's Maximum Pensionable Earnings — the first ceiling) and the YAMPE (Year's Additional Maximum Pensionable Earnings — the second ceiling).
| First ceiling (YMPE) | Second ceiling (YAMPE) | CPP2 rate | Max CPP2 (employee) | |
|---|---|---|---|---|
| 2025 | $71,300 | $81,200 | 4% | ~$396 |
| 2026 | Higher (set by CRA) | Higher (set by CRA) | 4% | Slightly higher |
The CRA announces the new ceilings each autumn for the year ahead. The 4% rate stays the same — only the earnings bands move up with average wages.
Who actually pays CPP2
- Earning under the first ceiling (~$71,300 in 2025): you pay no CPP2 at all.
- Earning between the two ceilings: you pay 4% on the amount above the first ceiling.
- Earning above the second ceiling: you pay the full maximum CPP2, then contributions stop for the year.
So CPP2 is purely a higher-earner deduction. Someone on $60,000 never sees it; someone on $90,000 pays the full amount.
What CPP2 costs you on each paycheque
Because CPP2 is capped, the most an employee pays in 2025 is roughly $396 for the year — about $15 per bi-weekly cheque if spread evenly. Your employer pays the same amount again. It is modest, but it stacks on top of regular CPP, EI, and income tax, which is why your take-home pay can feel lower than expected once your salary crosses the first ceiling.
CPP2 vs regular CPP
| Regular CPP | CPP2 | |
|---|---|---|
| Rate (employee) | 5.95% | 4% |
| Applies to | $3,500 up to first ceiling | First ceiling up to second ceiling |
| Who pays | Almost all workers | Only higher earners |
Both are mandatory and both are matched by your employer. The upside: higher contributions today mean a larger CPP pension when you retire.
See your own number
CPP2 is built into the CanPay Insights calculator. Enter your salary and province to see exactly how much CPP, CPP2, EI, and tax come off your pay for 2025 and 2026 — try the free payroll calculator, or check a specific salary like $90,000 after tax in Ontario.
Figures reflect 2025 CRA ceilings; 2026 ceilings are higher. Always confirm the current year's amounts with the CRA or use the calculator for an up-to-date estimate.
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What is CPP2?⌄
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Disclaimer: This content is based on publicly available information and general tax knowledge for reference only. Individual tax situations may vary. Please consult a qualified tax professional or accountant for personalized advice.