DPSP Payroll Tax Savings Calculator 2026 rates

Estimate employer payroll-tax savings from a Deferred Profit Sharing Plan vs. a Restricted RSP or unrestricted match.

Assumptions Ontario - EHT exempt - Simple mode - 2026 rates

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Input mode

Simple uses one average salary. Per-employee uses a salary list for exact CPP/EI caps.

Province of employment

Eligible for Ontario EHT exemption (first $1M of payroll)

Uncheck if associated payroll exceeds $5M.

Annual employee turnover

Estimates DPSP forfeitures, assuming 2-year cliff vesting. See how this works.

Pay frequency

Sets the per-paycheck breakdown in the detailed view.

How the math works & 2026 rates

Each employee gets their salary × match %, capped at the 2026 DPSP limit of $17,695 per person. Savings depend on the salary mix, since CPP, EI, and provincial levies each have annual caps.

2026 rates: CPP1 5.95% to $74,600 (less $3,500 exemption), CPP2 4.00% on $74,600–$85,000, EI employer 2.28% to $68,900 (Quebec: EI 1.82%, QPP 6.30%), Ontario EHT 0.98–1.95% tiered, Quebec HSF 1.65–4.26%. DPSP cap $17,695. Estimates only — confirm with your tax advisor before implementing.

Number of employees

Total annual payroll

Avg salary: $0

Contribution type

Employer match

Each employee gets this % of their salary. Total contribution: $0

Total employer payroll-tax savings DPSP vs. unrestricted match

Enter your inputs and click Calculate.

What this means for you

$0/yr

cheaper than paying the same $0 to your team as cash

payroll tax avoided vs. cash

estimated forfeitures recovered

Why a DPSP wins & what to know

Worth knowing

A DPSP is funded only by the employer (employees can't contribute), and significant shareholders and related persons generally can't be members. Employer contributions vest on a schedule of up to 2 years and are subject to annual CRA limits. Confirm the specifics with your advisor before implementing.

Plan-type comparison

Same dollars to employees - what does each method cost the employer?

See detailed breakdownForfeitures, per-plan math

Employee segmentation

Based on 2026 CRA thresholds - YMPE $74,600 (CPP1 cap), YAMPE $85,000 (CPP2 cap).

Below cap

Salary ≤ $74,600

CPP1 + CPP2 + EI savings apply

Mid-range

$74,600 - $85,000

CPP2 partial + EHT/HSF savings

High earners

Salary > $85,000

EHT/HSF savings only

DPSP savings by tier

Marginal employer cost avoided on pool dollars routed through DPSP (vs. unrestricted match).

Tier	Employees	Pool allocated	CPP1	CPP2	EI	EHT	Total saved
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Per-paycheck breakdown

Annual figures divided by pay frequency (set in Assumptions). Useful when an employer wants to see what shows up on each pay run.

Forfeiture analysis DPSP only

With 2-year cliff vesting, employees who leave before their 2-year anniversary forfeit any unvested employer contributions. In steady state, this returns a predictable fraction of contributions to the plan each year.

Per-plan breakdown

How DPSPs work

A Deferred Profit Sharing Plan (DPSP) is an employer-funded retirement plan with a few specific rules. Here's the plain-language version - expand any question below.

Employer contributes

Only the employer puts money in, out of pre-tax profits - with no CPP, EI or EHT owed on it.

It vests over up to 2 years

Contributions become the employee's once they meet the vesting schedule - often a 2-year cliff.

Leave early, money returns

Leave before vesting and the unvested money goes back to the employer. Stay, and it's the employee's to keep.

What exactly is a DPSP?

A registered retirement plan that only the employer contributes to - employees can't add their own money. Contributions grow tax-free, and the employee isn't taxed until they withdraw, usually in retirement. DPSPs are commonly paired with a Group RRSP so employees still have somewhere to make their own contributions.

Who can be in one?

Regular employees of a for-profit company. By law, business owners, their relatives and spouses, and anyone holding more than a 10% stake are excluded - these are called "connected persons."

Why do employers offer one?

Two reasons. It's tax-efficient - contributions are a deductible business expense and carry no CPP, EI or provincial payroll tax. And the optional vesting period helps retention, since employees who leave early forfeit unvested money back to the company.

What does "vesting" mean?

Vesting is when employer contributions become the employee's to keep. Schedules vary: immediate (owned right away), graded (a percentage each year), or cliff (everything after a set date). The maximum vesting period allowed is 2 years.

What happens when an employee leaves?

If they've vested, they keep the money and can move it to their RRSP. If they leave before vesting, the unvested amount is forfeited and returned to the employer. With Common Wealth, the employer is credited the account's value at that point - which can be a little more or less than the original contribution - and it's reported on a T4A.

How does it save on payroll tax?

Money paid as salary or a cash bonus is subject to CPP, EI and provincial payroll taxes like Ontario's EHT. DPSP contributions are exempt from all of these, so the same dollars reach employees without the employer paying tax on top. That's exactly what the Calculator measures.

How is it different from a Group RRSP?

A Group RRSP takes both employer and employee contributions, vests immediately, and is open to everyone - but employer contributions are taxable income to the employee right away. A DPSP is employer-only, can have up to 2-year vesting, excludes owners, and isn't taxed until withdrawal. Most Common Wealth plans use both together.

Does it affect an employee's RRSP room?

Yes. DPSP contributions reduce the employee's RRSP room the following year through a "pension adjustment." As a rule of thumb, $1 of DPSP contribution means about $1 less RRSP room next year.

A plain-language overview for general understanding - not tax or legal advice. Confirm specifics with your advisor. Based on Common Wealth's published help-centre material and CRA guidelines.

DPSP Payroll Tax Savings Calculator 2026 rates

What this means for you

Plan-type comparison

Employee segmentation

DPSP savings by tier

Per-paycheck breakdown

Forfeiture analysis DPSP only

Per-plan breakdown

Forfeiture savings DPSP only

How recovery scales with turnover

How DPSPs work