Pensionable and Insurable Earnings Explained
Understand the two earnings figures that drive your pension and employment insurance deductions.
Written and reviewed by Rocco Clayfield, Founder & DirectorLast reviewed
Short answer
Pensionable earnings are the portion of your pay on which CPP (or QPP in Quebec) contributions are calculated. Insurable earnings are the portion on which EI (or QPIP in Quebec) premiums are calculated. Both have annual maximums set by the CRA and, in Quebec, Revenu Quebec. Neither figure is the same as gross pay in every situation, because some pay types are excluded from one calculation or both.
When you look at your pay stub, you may notice two amounts quietly sitting beneath your gross pay: pensionable earnings and insurable earnings. Most employees glance past them, yet these two figures directly control how much comes off your cheque for CPP and EI each pay period.
Both figures have annual ceilings, called the Year's Maximum Pensionable Earnings (YMPE) and the Maximum Insurable Earnings (MIE). Once your year-to-date earnings cross the relevant ceiling, contributions or premiums stop for the rest of the year. Knowing what each term means makes it easier to spot whether your deductions look reasonable.
What this page helps you check
- Whether your pensionable earnings match the pay types you expect CPP to apply to
- Whether your insurable earnings match what you expect EI premiums to cover
- Whether either figure has reached the annual ceiling and stopped
- Whether a recent pay type change (such as a taxable benefit or severance) is reflected correctly
- Whether year-to-date CPP or EI contributions are tracking at roughly the right pace
- Whether your employer is using the correct pay period rate and annual maximum
- Whether Quebec employees are seeing QPP and QPIP figures instead of CPP and EI
What pensionable earnings are
Pensionable earnings are the earnings on which your Canada Pension Plan (CPP) contributions are calculated. In most cases this is your regular wages or salary, taxable benefits, and certain other amounts your employer includes in your employment income.
Not every dollar in your paycheque counts. Some pay types are excluded from the pensionable earnings base under the Canada Pension Plan Act. Because the rules can be technical, the CRA website is the best place to confirm exactly which pay types are in or out for your situation.
What insurable earnings are
Insurable earnings are the earnings on which your Employment Insurance (EI) premiums are calculated. Most regular employment income qualifies, but there are exclusions set out in the Employment Insurance Act and its regulations.
Like CPP, EI has an annual maximum. Once your insurable earnings for the year reach the Maximum Insurable Earnings set by the CRA, your employer stops deducting EI premiums for that calendar year. Both the ceiling and the premium rate are announced by the CRA each fall for the following year.
Why the two figures can differ from gross pay
Gross pay is everything your employer pays you before deductions. Pensionable earnings and insurable earnings are subsets of gross pay, filtered by rules in the respective legislation.
For example, some taxable allowances or benefits might count toward one but not the other. A retiring allowance (often called severance) is generally neither pensionable nor insurable. Gratuities can be insurable but the treatment of other pay types varies. Rather than memorizing every rule, treat a difference between your gross pay and either earnings figure as a prompt to ask payroll why the adjustment was made.
The annual ceilings and what happens when you hit them
Each year the CRA sets a Year's Maximum Pensionable Earnings (YMPE) for CPP and a Maximum Insurable Earnings (MIE) for EI. Once your year-to-date pensionable earnings reach the YMPE, CPP deductions stop. Once your insurable earnings reach the MIE, EI premiums stop.
You will see this on your stub as a CPP or EI deduction of zero, or a reduced final deduction in the pay period when you cross the ceiling. This is expected behaviour, not an error. Current ceilings are published on the CRA website each year.
What to do if a figure looks wrong
If your pensionable or insurable earnings look unexpectedly low or high, compare them against your gross pay and note the difference. Check whether you received any non-cash benefits, allowances, or unusual pay types that period.
If you cannot explain the difference yourself, ask payroll in writing to confirm which pay types were included or excluded, and under which rule. Keep a copy of the response. If you believe there is an error, your employer is required to correct it; the CRA and Revenu Quebec also have processes for disputed deductions.
Quebec works differently
Common red flags worth checking
These do not automatically mean there is an error. They are simply lines worth a closer look, or worth asking payroll to explain.
Pensionable earnings are zero on a regular pay period
If you received wages and the pensionable earnings field shows zero, CPP may not have been calculated on your pay. This is worth confirming with payroll unless you have already hit the annual maximum.
Insurable earnings are significantly lower than gross pay all year
A consistent gap between gross and insurable earnings across multiple stubs could mean a pay type is being excluded. Ask payroll to identify which earnings are being excluded and why.
CPP or EI deductions continue after the annual maximum
If your year-to-date contributions have already reached the ceiling and deductions are still being taken, this may be an overpayment. You can recover CPP and EI overpayments when you file your tax return, but it is worth flagging to payroll immediately.
Both figures are identical to gross in every period
This is often correct for straightforward salaried employees, but if you receive taxable benefits or allowances that should adjust the base, confirm with payroll that those amounts are being handled properly.
The figures stop mid-year without explanation
A sudden drop to zero in pensionable or insurable earnings mid-year may indicate you hit the ceiling, which is normal, or that something changed in how your pay is coded. Verify which scenario applies.
Quebec employee seeing CPP and EI instead of QPP and QPIP
Quebec has its own pension plan (QPP) and parental insurance plan (QPIP). If you work in Quebec and your stub shows CPP or federal EI deductions, ask payroll to confirm the correct plan is being applied.
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What to ask payroll or HR
Calm, specific questions get clearer answers. You can copy any of these, or build a full message with the Payroll Message Generator.
- “Can you confirm which pay types are included in my pensionable earnings this period, and which are excluded?”
- “Can you confirm which pay types are included in my insurable earnings, and provide the rule that excludes anything from my gross pay?”
- “My year-to-date CPP contributions appear to have exceeded the annual maximum. Can you review and correct?”
- “I received a taxable allowance this period. Was it included in both pensionable and insurable earnings, or just one?”
- “Can you confirm what annual maximum figures you are using for CPP and EI this year?”
- “I work in Quebec. Can you confirm my deductions are calculated using QPP and QPIP, not CPP and federal EI?”
Frequently asked questions
Why are my pensionable earnings lower than my gross pay?
Some pay types are excluded from the CPP pensionable earnings base under the Canada Pension Plan Act. Common examples include certain non-cash benefits or pay that falls outside employment income. Ask payroll to identify exactly what was excluded and under which rule.
Can pensionable earnings and insurable earnings be different amounts?
Yes. The two figures are calculated under different legislation and have different exclusions. A pay type might count toward one but not the other. It is not unusual to see small or even significant differences between the two.
What happens once I hit the annual CPP maximum?
Your employer stops deducting CPP contributions for the rest of the calendar year. You will see a zero or reduced CPP deduction on your stub for those periods. The maximum is reset each January 1.
Does my employer contribute to CPP and EI as well?
Yes. Employers match your CPP contributions dollar-for-dollar and pay a higher EI premium rate than employees. These employer amounts do not appear on your stub as your deductions, but they do affect your total compensation cost.
If I overpay CPP or EI, do I get it back?
CPP and EI overpayments made by employees are generally recoverable when you file your personal income tax return. The CRA credits any overpayment against tax owing or refunds it. This does not mean a refund is guaranteed in your specific situation; how the overpayment is handled depends on your complete return.
Are bonuses included in pensionable and insurable earnings?
Cash bonuses paid as employment income are generally both pensionable and insurable. Non-cash gifts and awards have different rules. The CRA website has a guide to employment income and taxable benefits that outlines which amounts qualify.
I started a new job mid-year. Does my new employer know about my previous contributions?
Your new employer starts fresh for deduction purposes. If your cumulative CPP or EI contributions across all employers exceed the annual maximum for the year, you recover the overpayment when you file your T1 return. You cannot ask your new employer to stop deductions based on contributions made at a prior job.
Where can I find the current CPP and EI maximums?
The CRA publishes the YMPE, contribution rates, and the Maximum Insurable Earnings on its website each fall for the following year. Revenu Quebec publishes QPP and QPIP figures on its own website.
Official sources for this page
Every figure here is derived from these. Where a number matters to you, read it at the source — PayStub IQ Canada explains the rules, it does not set them.
- CPP contribution rates, maximums and exemptions — Canada Revenue Agency
- EI premium rates and maximums — Canada Revenue Agency
- T4 slip: information for employers, box by box — Canada Revenue Agency
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Helpful guidance, not advice
PayStub IQ Canada provides educational payroll explanations based on the information visible in your document. It does not provide legal, tax, accounting, payroll, CRA, Revenu Québec, or employment standards advice. For official decisions or corrections, contact your employer, payroll department, CRA, Revenu Québec, your provincial or territorial employment standards office, or a qualified professional.