What are CPP and EI?
CPP and EI are mandatory deductions for most employees in Canada. Employers withhold these amounts from your pay and remit them to the government. Even if your income tax is low, CPP and EI can still reduce your take-home pay.
CPP (Canada Pension Plan)
CPP is a pension contribution based on your employment income. Contributions apply only to pensionable earnings above a basic exemption and up to an annual cap. Once you reach the cap for the year, CPP deductions typically stop on later paycheques.
EI (Employment Insurance)
EI premiums are based on insurable earnings up to a yearly maximum. Like CPP, once you reach the annual cap, EI deductions typically stop for the rest of the year.
Why CPP and EI matter for net pay
CPP and EI are part of the difference between gross pay and take-home pay. Many people focus only on income tax, but payroll deductions can be a meaningful share of total deductions—especially for low and middle incomes.
Use the calculator
The Prospetrac calculator includes federal + provincial income tax plus CPP and EI, so you get a more realistic estimate of take-home pay.