2026 Statutory Deduction Rates Process Guide

2026 Statutory Deduction Rates Process Guide

Required HRP Setup for Statutory Deductions Rates effective for Jan 1, 2026

For: All Boards/Districts

Last Updated: 11/25/2025

This document is provided to assist boards/districts with updating Statutory Deduction values in HRP. Please note that while these figures have been validated on the various sources’ websites, boards are responsible for ensuring these values are correct and they are responsible for maintaining this information throughout the year, if there are any changes. These values should be updated prior to running the first pay of the New year.

IMPORTANT NOTE: For the purpose of this document, jurisdictional information in screenshots such as Tax Brackets & Provincial Personal amount/Indexing Factor are in Ontario figures. 

• Provincial-based figures are provided in tables for Alberta and BC

FEDERAL TAX DATA Module

The screen below shows the new tax rates and figures for the year 2026. 

PAYROLL > BOARD > FEDERAL TAX DATA

Find > Current 2025 Tax Record > Input End Date = 2025/12/31

**Once complete, choose Save to close the current record**

Provincial Tax Credit Information

Note: Please see the bottom of the document to reference table 8.2 in CRA T4127-26e

Canada Employment Credit (CEA) = $1,501.00

DUPLICATE & UPDATE START DATE

Right Click > Duplicate the closed 2025 record to create a new record with Start Date = 2026/01/01

**Fill in the required data as shown**

Note: Federal and Provincial Indexing Factor fields must be completed on when an automated indexing is chosen. 

Leave Federal & Provincial Indexing Factor fields blank when automated indexing is not to be used. For accurate calculations, please enter the proper factor value (Example: 2.4% = 1.024 – Index at 102.4% of the previous year’s credits). 

Note: The above image can be downloaded once clicked in the Solution Article in the event the “pop-up” image is not large enough to clearly view the data values entered. 

CPP, EIC, WSIB, EHT Module

The screen below shows the new CPP and EIC Rates for the Year 2026. 

PAYROLL > BOARD > CPP, EIC, WSIB, EHT

Find > Current 2025 Record > Input End Date = 2025/12/31

**Once complete, choose Save to close the current record**

DUPLICATE & UPDATE START DATE

Right Click > Duplicate the closed 2025 record to create a new record with Start Date = 2026/01/01

**Fill in the required data as shown**

NOTE: YAMPE = $85,000 and CPP Employee Rate 2 = 4.00%

WSIB (WCB): Only complete if required. Check your Province’s rates. 

Note: The above image can be downloaded once clicked in the Solution Article in the event the “pop-up” image is not large enough to clearly view the data values entered. 

PENSION DEDUCTION Module

The screen below shows the new Pension rates for Year 2026. 

Follow these steps to update ALL Pension Code (Example: TSC/TSCRET, OMERS/OMERSRET) records. 

PAYROLL > BOARD > PENSION DEDUCTIONS

Find > Current 2025 Record > Input End Date = 2025/12/31

**Once complete, choose Save to close the current record**

DUPLICATE & UPDATE START DATE

Right Click > Duplicate the closed 2025 record to create a new record with Start Date = 2026/01/01

**Fill in the required data as shown**

Note: Values that may be updated from the previous year are Employee 1%, Employee 2% and Annual Maximum Pensionable Earnings fields. 

• Employer %1 and Employer %2 is only required if the Employer Share is different from Employee Share
• The other fields may be board/district specific (Example: Liability Expense Account GL)

IMPORTANT NOTE: Employee %1 and Employee %2 is only “reversed” for TSC. 

OMERS, MPP, etc. need to be Employee %1 = Lower Rate, and Employee %2 = Higher Rate. 

CREATE STATUTORY DEDUCTIONS Module

PAYROLL > YEAR END > CREATE STATUTORY DEDUCTIONS

Specify Date for Closing Latest Statutory Deduction Records = 2025/12/31 > TAB > Greyed out fields will automatically populate from the Federal Tax Data module. 

**Once complete choose Submit to process the background process**

Note: The standard TD1 and Provincial TD1 amounts will be automatically populated from the Federal Tax Data module after clicking TAB following the date entry. 

Tax Bracket Data by Province

Additional Notes & Resources

T4127-26e (HTML): Payroll Deductions Formulas - 122nd Edition Effective January 1, 2026 - Canada.ca

T4127-26e (PDF): T4127(E), Payroll Deductions Formulas

CPP Contribution Rates, Maximums and Exemptions: CPP contribution rates, maximums and exemptions – Calculate payroll deductions and contributions - Canada.ca

CPP2 Contribution Rates and Maximums: Second additional CPP (CPP2) contribution rates and maximums – Calculate payroll deductions and contributions - Canada.ca

EI Premium Rates & Maximums: EI premium rates and maximums – Calculate payroll deductions and contributions - Canada.ca

WSIB Premiums and Rates: 2026 premium rates | WSIB

PA Max Accrued: MP, DB, RRSP, DPSP, ALDA, TFSA limits, YMPE and the YAMPE - Canada.ca

T4127-26e Table 8.1: