# CPP and EI vs INPS: The Real Employer Cost of a Salary in Canada and Italy

> 2026 CPP, CPP2 and EI premiums vs Italian INPS, INAIL, TFR and IRPEF. Why an Italian salary costs about 1.4x and the Canada–Italy social security agreement.

For a Canadian employer, payroll contributions are a small line: CPP and EI stop at ceilings well below a typical professional salary. In Italy, social contributions run on the whole salary up to a much higher ceiling, and TFR and the 13th month come on top. This is why an Italian employee costs around **1.36–1.40 times** gross salary. Full comparison on [Italy vs Canada](/italy-vs-canada.html).

## Canada: CPP, CPP2 and EI in 2026

From the CRA and ESDC 2026 figures:

- **CPP:** 5.95% for the employee and 5.95% for the employer on earnings between the **$3,500** basic exemption and the **$74,600** YMPE. Maximum **$4,230.45** each.
- **CPP2:** 4% each on earnings between $74,600 and the **$85,000** YAMPE. Maximum **$416** each.
- **EI:** employees pay **$1.63** per $100 of insurable earnings and employers **$2.28** (1.4 times), up to maximum insurable earnings of **$68,900**. Maximum premiums: $1,123.07 employee, $1,572.30 employer.
- **Quebec:** employees contribute to the QPP instead of the CPP and pay a lower EI rate ($1.30 per $100; employer $1.82) because Quebec runs its own parental insurance plan (QPIP).

Provincial costs such as workplace safety insurance and, in some provinces, an employer health tax add to this. <!-- review: Ontario EHT and WSIB rates if a figure is wanted -->

**Example (Ontario, $90,000 salary):** employer CPP $4,230.45 + CPP2 $416 + EI $1,572.30 = about **$6,219**, around 7% of salary. Above $85,000, each extra dollar costs the employer nothing in CPP or EI.

## Italy: INPS, INAIL, TFR and the 13th month

Italian salaries are quoted as **RAL** (gross annual pay), which already includes the 13th month and, where the CCNL provides it, the 14th. On top of RAL the employer pays:

- **INPS** social security: about **30%** of pay (29–32% by sector and size) <!-- review: exact rate by CCNL and size -->, with a 2026 ceiling (massimale) of **€122,295** for employees first insured from 1996.
- **INAIL** workplace injury insurance: under 0.5% for office roles.
- **TFR**: about **6.91%** of pay, accrued every year and paid on exit (art. 2120 Civil Code).

The employee pays **9.19%** INPS (plus 1% above €56,224 in 2026), then **IRPEF** income tax at 23% up to €28,000, 33% up to €50,000 and 43% above, plus regional and municipal surcharges.

**Example (RAL €60,000):** INPS about €18,000, TFR about €4,150, INAIL a few hundred euros. Total employer cost about **€82,000–84,000**.

## Side by side

| Item | Canada (2026) | Italy (2026) |
|---|---|---|
| Pension | CPP 5.95% + CPP2 4% each side, capped | INPS ~30% employer + 9.19% employee |
| Ceiling | $74,600 / $85,000 | €122,295 |
| Unemployment | EI 2.28% employer, capped at $68,900 | Included in INPS |
| Workplace injury | Provincial board | INAIL <0.5% |
| Deferred pay | None statutory | TFR ~6.91% |
| 13th month | No | Usually yes (in RAL) |
| Employer cost on high salary | ~+7% | ~+36–40% |

## The Canada–Italy social security agreement

Canada and Italy have a social security agreement; the original took effect in 1979, and a revised Agreement and Protocol has been in force since **1 October 2017**. It covers the CPP and Old Age Security (not the QPP, which has its own arrangement) and Italian pensions. Periods in both countries can be counted together to qualify for benefits, and each country pays for its own periods.

For **posted workers**, an employee temporarily sent by a Canadian employer to Italy can, with a **certificate of coverage**, keep contributing to the CPP instead of INPS for a limited period. <!-- review: maximum posting period under the 2017 agreement and the CRA/INPS form --> This applies to temporary assignments of existing Canadian employees, not to people hired locally in Italy, who are in INPS from day one.

## Common questions from Canadian employers

**Why is the Italian cost so much higher?** INPS funds pensions, unemployment, sickness and maternity benefits that in Canada come from capped CPP/EI premiums, general taxation or private benefits plans.

**Do we still need group benefits?** Health care is public in Italy; supplementary health funds are often required by the CCNL at a modest cost. A private plan is optional.

**Is pay monthly?** Yes, normally monthly, with the 13th month paid in December.

**Should we convert the Canadian salary to euros one-for-one?** No. Italian gross salaries for the same role are usually lower than in Canada, and the employer cost on top is higher. Benchmark against the CCNL level and local market, then add about 36–40% to reach total cost.

**Does the employee's net pay look low?** Italian employees think in net monthly pay. After 9.19% INPS and IRPEF with regional and municipal surcharges, net pay on a €60,000 RAL is roughly half to 55% of gross, paid in 13 or 14 instalments.

## How the payroll runs each month

A Canadian payroll department remits CPP, EI and income tax source deductions to the CRA and issues T4 slips at year end. In Italy, the employer pays salaries monthly, then by the 16th of the following month pays INPS contributions and IRPEF withholdings through a single F24 form. The monthly **Uniemens** return reports each employee's pay and contributions to INPS. At year end, the employer issues the **Certificazione Unica** (the closest equivalent to the T4) and files the withholding agent return. The payslip (busta paga) shows gross pay, contributions, tax, leave balances and the TFR accrual.

## What this means if you hire through an EOR

The EOR registers with INPS and INAIL, calculates contributions and IRPEF withholding, accrues TFR and pays everything on time. You receive one monthly invoice covering salary, employer contributions and the EOR fee of €250 per employee per month. Compare in the [cost calculator](/calculator.html), read about [Italian employment contracts](/italy-employment-contracts.html), see [other countries](/italy-vs-your-country.html) or [contact us](/contact.html).

## Related guides for companies in Canada

- [ESA severance pay and the ROE vs TFR in Italy](/articles/canada-esa-severance-vs-italy-tfr.html)
- [Pregnancy and parental leave: Canada vs Italy](/articles/canada-parental-leave-ei-vs-italy.html)
- [Employment standards in Canada vs the Italian contract and CCNL](/articles/canada-employment-standards-vs-italian-contract-ccnl.html)

*General information, not legal advice.*

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Source: https://hiringitaly.com/articles/canada-cpp-ei-vs-inps-employer-cost.html · 2026-11-10