Important Update: 2026 Payroll Deduction Rates, Maximums, and Federal/Provincial TD1 Forms

As part of our commitment to informing you about important changes affecting your pay, we would like to notify you of the updated payroll deduction rates and maximums for 2026, as mandated by the Canada Revenue Agency (CRA).

How CPP and EI contributions work:

Most Ontario Tech University employees have CPP and EI contributions deducted from their earnings. CRA sets maximum CPP and EI contribution amounts each year. These contributions are deducted from your pay throughout the year until the respective maximums are reached, after which the deductions stop for the remainder of the year. Contributions to CPP and EI recommence each January 1.

The maximum earnings on which contributions will be withheld will be $85,000 for 2026.

• The contribution rate on the first $74,600 will be 5.95% to a maximum of $4,230.45
  
  
  • An annual basic exemption of $3,500 will be applied to this contribution
    
    
• The contribution rate on the next $10,400 will be 4% to a maximum of $416.

Employment Insurance (EI) Premiums:

The maximum insurable earnings subject to premiums will be $68,900 for 2026.

• The employee premium rate will be 1.63% to a maximum deduction of $1,123.07

Your pay will reflect these changes starting with the first payroll of January 2026. CPP and EI maximum contributions apply to each job an employee holds with different employers. If you leave one employer during the year to start work with another employer, the new employer also has to deduct CPP contributions without taking into account what you paid during your previous employment (even if you contributed the maximum amount in your last job).

CRA will credit or refund any CPP and EI overpayments to employees when they file their income tax and benefit return.

Opting out of CPP contributions

If you are at least 65 years old, you can elect to stop contributing to CPP by following these steps:

1. Complete the CPT30 Election to Stop Contributing to the Canada Pension Plan, or Revocation of a Prior Election form.
2. Provide a copy of the completed form to the Ontario Tech Payroll department.

Your CPP contribution will stop on the first day of the month after you give the payroll department the form.

Federal and Provincial Personal Tax Credit Returns forms

The Federal (TD1) and Provincial (TD1ON) Personal Tax Credits Return forms are used to determine the amount of income tax to be deducted from your pay.

You do not have to complete a new TD1 every year if you are claiming the basic personal amount, unless there is a change to your federal or provincial personal tax credit amounts. If there is no change, then no action is required by you regarding the TD1 form.

What do I need to do for the 2026 taxation year?

You may wish to complete a new  2026 Federal Personal Tax Credits Return (TD1) and 2026 Ontario Personal Tax Credits Return (TD1ON) form if you:

• Are a new hire (this includes international students on the university’s payroll).
  
  
• Claiming other than the Basic Personal Exemption amount in the previous calendar year (such as caregiver allowance, age amount, pension income, tuition, etc. Note: the allowances for these items change every year).
  
  
• Want to change amounts from previous amounts claimed.
  
  
• Want Additional Tax deductions (recommended if your net income from all sources will be greater than $181,440.00)
  
  
• Are experiencing changes (e.g. birth of a child, marriage, dependent claim, tuition, etc.)

For more information, contact payroll@ontariotechu.ca.

We appreciate your attention to this matter and your support as we implement these necessary updates.

Contact information:

Have questions about this post? Feel free to reach out to the contact listed above — they’ll be happy to help!