Glossary
Pensionable Earnings
Pensionable earnings are the portion of an employee's pay subject to Canada Pension Plan contributions — everything above the $3,500 basic exemption, up to the Year's Maximum Pensionable Earnings (YMPE) of $74,600 for 2026, with a further band up to the Year's Additional Maximum Pensionable Earnings (YAMPE) of $85,000 taxed under CPP2. Not every type of pay counts: most taxable benefits are pensionable, but some payments, such as retiring allowances, are excluded. Getting pensionable earnings right each pay period is what determines the correct CPP deduction for both employee and employer. Our 2026 CPP and EI maximums guide shows how the exemption and ceilings apply across a full year.
Related reading