Pensionable and Insurable Earnings – Canada Pension Plan (CPP) and Employment Insurance (EI)

This CRA page explains how to determine what types of payments you receive from employment are pensionable earnings for the Canada Pension Plan (CPP) and insurable earnings for Employment Insurance (EI). Pensionable and insurable earnings are used to calculate CPP contributions and EI premiums that employers must deduct and remit. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/canada-pension-plan-cpp-employment-insurance-ei-rulings/cpp-ei-explained/canada-pension-plan-employment-insurance-explained-10.html))

Employer Obligations

Employers are legally required to deduct CPP contributions and EI premiums from most amounts they pay to employees and to remit these amounts to the Canada Revenue Agency (CRA), along with the employer’s share of CPP and EI contributions. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/canada-pension-plan-cpp-employment-insurance-ei-rulings/cpp-ei-explained/canada-pension-plan-employment-insurance-explained-10.html))

What Are Pensionable Earnings?

Pensionable earnings are the amounts on which CPP contributions must be made. Generally this includes:

Salary, wages and most other remuneration for employment as defined under the Income Tax Act. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/canada-pension-plan-cpp-employment-insurance-ei-rulings/cpp-ei-explained/canada-pension-plan-employment-insurance-explained-10.html))
Taxable benefits and allowances received by an employee for the performance of work. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/canada-pension-plan-cpp-employment-insurance-ei-rulings/cpp-ei-explained/canada-pension-plan-employment-insurance-explained-10.html))

Certain deductions from income and specific situations may reduce or exclude amounts from contributory earnings, such as if an employee has elected to stop contributing once over age 65.

What Are Insurable Earnings?

Insurable earnings are the amounts on which EI premiums must be calculated. Key features include:

They must be paid in cash by the employer in respect of insurable employment. ([canada.ca](https://www.canada.ca/en/revenue-agency/services/tax/canada-pension-plan-cpp-employment-insurance-ei-rulings/cpp-ei-explained/canada-pension-plan-employment-insurance-explained-10.html))
Basic salary, wages, and certain types of periodic payments are included.
Payments that are not in cash (non‑cash benefits) generally are not insurable, except in limited cases such as board and lodging provided to an employee in the same pay period as cash wages.

Pensionable vs Insurable Earnings

There is overlap between pensionable and insurable earnings, but they are not always the same. For example:

Pensionable earnings are tied to contributions under the CPP, while insurable earnings relate to eligibility for EI.
Some employer‑provided allowances or benefits that count toward pensionable earnings may not necessarily be considered insurable earnings, depending on their form.

Special Situations

Determining pensionable and insurable earnings can be complex in some cases, such as:

Different types of remuneration or payments where the nature of the payment must be examined.
Self‑employment earnings vs employment earnings. Separate rules apply concerning CPP contributions and optional EI participation for self‑employed individuals.