CPP for the self-employed in Canada: 2026 rates and maximums

If you're self-employed in Canada, you pay 11.9% of your net business income between $3,500 and $74,600 into the Canada Pension Plan for 2026. That's both the employee and the employer share, because you're both. The most you can pay is $8,460.90. If you earn more than $74,600, you also pay CPP2: 8% of what you earn between $74,600 and $85,000, up to $832.

So the most a self-employed person pays in CPP for 2026 is $8,460.90 + $832 = $9,292.90. You pay it with your income tax when you file, on Schedule 8, or through your instalments during the year.

The 2026 figures

From the CRA's CPP rates and maximums and CPP2 rates and maximums:

	2025	2026
Basic exemption	$3,500	$3,500
First earnings ceiling (YMPE)	$71,300	$74,600
Self-employed rate	11.9%	11.9%
Maximum self-employed CPP	$8,068.20	$8,460.90
Second earnings ceiling (YAMPE)	$81,200	$85,000
Self-employed CPP2 rate	8%	8%
Maximum self-employed CPP2	$792	$832

An employee pays half the rate (5.95%) and their employer pays the other half. That's why an employee's maximum for 2026 is $4,230.45, exactly half of yours.

How it's worked out

Your CPP is based on your net business income: revenue minus expenses, the figure at the bottom of Form T2125. It isn't based on your sales. Every legitimate expense you record lowers your CPP as well as your income tax. Small business tax deductions lists what counts.

The steps:

1. Take your net self-employment income, up to $74,600.
2. Subtract the $3,500 basic exemption.
3. Multiply by 11.9%.
4. If your net income is over $74,600, take the part between $74,600 and $85,000 and multiply it by 8%. That's CPP2.

Income above $85,000 has no CPP at all.

Three examples

Net income of $40,000. ($40,000 − $3,500) × 11.9% = $4,343.50. No CPP2.

Net income of $66,650. ($66,650 − $3,500) × 11.9% = $63,150 × 11.9% = $7,514.85. No CPP2.

Net income of $80,000. Base: ($74,600 − $3,500) × 11.9% = $8,460.90, the maximum. CPP2: ($80,000 − $74,600) × 8% = $5,400 × 8% = $432.00. Total: $8,892.90.

If your net income is $3,500 or less, you don't pay CPP on it.

At a glance

Self-employed CPP and CPP2 for 2026 at different levels of net business income:

Net business income	CPP	CPP2	Total
$20,000	$1,963.50	$0	$1,963.50
$40,000	$4,343.50	$0	$4,343.50
$60,000	$6,723.50	$0	$6,723.50
$74,600	$8,460.90	$0	$8,460.90
$85,000 or more	$8,460.90	$832.00	$9,292.90

If you also had a job during the year, the CPP your employer took off your pay counts toward the same maximum. Schedule 8 works this out, so you don't pay twice on the same dollars.

What you get back on your tax return

Part of your CPP reduces your income, and part of it reduces your tax. The CRA explains the split in its notice on the CPP enhancement:

• The base contribution is 9.9% of your earnings above $3,500. Half of it (4.95%) gets a non-refundable tax credit. The other half (4.95%) is a deduction from income, the same way an employer deducts its share.
• The first enhancement, the other 2%, is a deduction.
• All of CPP2 is a deduction.

For the $66,650 example above:

• Base CPP: $63,150 × 9.9% = $6,251.85. About $3,126 gets the tax credit and about $3,126 is deducted.
• Enhanced CPP: $63,150 × 2% = $1,263.00, deducted.
• Total deducted from income: about $4,389. The rest, about $3,126, goes toward the tax credit.

None of this goes on T2125. It's done on Schedule 8 and the personal return (line 22200 for the deduction), so don't record CPP as a business expense in your books.

When you pay it

There's no payroll to take CPP off your income as you go, so it's paid in a lump:

• With your tax return. Your balance owing for 2026, including CPP, is due April 30, 2027, even though self-employed people have until June 15, 2027 to file. That's the CRA's due date rule.
• Through instalments. If the CRA asks you to pay instalments, CPP is part of the amount. The CRA's instalment options have you estimate CPP along with income tax. Tax instalments for the self-employed explains who has to pay them and when.

The first year of self-employment is when CPP surprises people. A worker who left a job earning $70,000 is used to CPP coming off each paycheque, half paid by the employer. In the first year on their own, nothing comes off, and the whole amount, about $8,000 at that income, is due on April 30 on top of the income tax.

A simple fix is to move a set share of every deposit into a separate savings account for tax and CPP. Your accountant can suggest the right share for your income and province.

Recording CPP in your books

As a sole proprietor, your CPP is a personal amount, worked out on your personal return. It isn't a business expense, so it doesn't go on T2125 and shouldn't be categorized as an expense in your books.

If you pay your tax bill or instalments from the business account, record the payment as an owner's draw, the same as any other money you take out for yourself. If you put the expense in "taxes" on your profit and loss instead, your profit looks lower than it really is, and the year-end figures your accountant uses will be off by the same amount. How to pay yourself as a sole proprietor shows how draws are recorded.

If you employ other people, their CPP is different. You deduct their share from their pay, add your employer share, and send both to the CRA through payroll. Your employer share for your staff is a business expense.

Can you avoid it?

Not as a sole proprietor. Service Canada says that, with very few exceptions, everyone over 18 who works in Canada outside Quebec and earns more than $3,500 a year contributes. (In Quebec, the Quebec Pension Plan applies instead, and this guide doesn't cover it.) Its CPP contributions page also notes that contributions stop at 70, even if you're still working.

If you run your business through a corporation, the picture changes. A salary from your corporation has CPP, paid by you and by the corporation. Dividends don't. That trade-off, and what it means for your pension and RRSP room, is in salary vs dividends. It's a decision to make with your accountant, because less CPP now means a smaller CPP pension later.

What it buys

CPP is a contribution to your own pension, not a tax that disappears. The more you contribute over your working life, up to the maximums, the larger your CPP retirement pension. The enhanced portion and CPP2, both phased in since 2019, are there to raise that pension over time. Service Canada's CPP pages show your contribution history if you sign in to My Service Canada Account.

Where Spark Books helps

Your CPP is only as accurate as your net income. Spark Books builds that figure from your uploaded bank and card statements, with each transaction sorted into a Canadian chart of accounts and the GST/HST split out, so your profit for the year isn't a guess. Its year-end package gives your accountant the totals. Spark doesn't calculate your CPP or file your return. Your accountant or tax software does that on Schedule 8. It's free, with no card.