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What CPP pays for
Canada Pension Plan contributions help fund retirement, disability, survivor, and related benefits. Employees and employers both contribute, and self-employed workers generally pay both portions.
What EI pays for
Employment Insurance premiums support eligible workers during job loss, sickness, parental leave, compassionate care, and other qualifying situations.
Why CPP and EI change through the year
CPP and EI each have annual maximums. Once your earnings reach those limits, deductions can stop or change for the rest of the year, which may make later paycheques slightly larger.
Frequently Asked Questions
Are CPP and EI the same as income tax?
No. CPP and EI are payroll contributions, while income tax is paid to federal and provincial governments. All three reduce take-home pay.
Do all employees pay CPP and EI?
Most employees pay CPP and EI, but there are exceptions depending on age, employment type, earnings, and province-specific rules.