Payroll and social security compared across the United States, Canada and India shows three different answers to the same question: how much do you and your employer pay into the retirement and insurance systems, and up to what pay level? The U.S. splits Social Security and Medicare between employee and employer. Canada has the Canada Pension Plan (CPP) and Employment Insurance (EI). India has the Employees' Provident Fund (EPF) and related schemes. This page compares the rates and ceilings for the 2025 and 2026 payroll years and explains what changes when a worker or employer straddles two countries.
Payroll and social security compared: contribution rates
| Feature | United States | Canada | India |
|---|---|---|---|
| Main retirement contribution | Social Security: 6.2% employee plus 6.2% employer | CPP: 5.95% employee plus 5.95% employer | EPF: 12% employee plus 12% employer |
| Earnings ceiling | 2026 wage base $184,500 | CPP: 2025 maximum pensionable earnings $71,300; 2026 $74,600 | Compulsory coverage for wages up to Rs 15,000 per month; contributions on higher wages are possible |
| Health or medical | Medicare 1.45% each, no cap; additional 0.9% on the employee above income thresholds | Provincial health plans funded mainly through general taxes; a few provinces add payroll levies | Separate employee state insurance for covered workers; details with your CA |
| Unemployment | State unemployment (Illinois) and federal FUTA, paid by the employer | EI: employee 1.64% (2025) or 1.63% (2026); employer 1.4 times | No direct equivalent of EI payroll premiums; ask your CA about other schemes |
| Self-employed | 15.3% self-employment tax (12.4% plus 2.9%) | Both halves of CPP: up to $8,460.90 in 2026 | Not under EPF unless covered separately |
For the U.S., the IRS states the 2026 Social Security wage base is $184,500, with both employer and employee paying 6.2% Social Security and 1.45% Medicare, and no wage cap on Medicare. The IRS also lists an Additional Medicare Tax of 0.9% above $200,000 for single filers ($250,000 for married filing jointly) in its self-employment guidance. In Canada, the CRA sets the CPP basic exemption at $3,500, contributory earnings of $67,800 for 2025 and $71,100 for 2026, and maximum employee contributions of $4,034.10 for 2025 and $4,230.45 for 2026. A second tier, CPP2, applies to earnings above the first ceiling up to a higher ceiling of $81,200 for 2025 and $85,000 for 2026, at a rate set out on the CRA's CPP2 page. For India, the government says a covered employee drawing wages up to Rs 15,000 a month must join the EPF and contribute 12% of wages, and the employer matches with 12%. The Rs 15,000 ceiling has been in place since September 2014, according to a Press Information Bureau release, and the ceiling is revised from time to time.
Canadian EI and CPP limits by year
| Item | 2025 | 2026 |
|---|---|---|
| Canada: EI employee rate (outside Quebec) | 1.64% | 1.63% |
| Canada: EI maximum insurable earnings | $65,700 | $68,900 |
| Canada: maximum employee EI premium | $1,077.48 | $1,123.07 |
| Canada: maximum employer EI premium (1.4 times) | $1,508.47 | $1,572.30 |
| Canada: maximum CPP contribution, each of employee and employer | $4,034.10 | $4,230.45 |
Quebec operates its own pension and parental insurance plans, so payroll for Quebec employees follows different tables. In Illinois, the Department of Employment Security says every business with employees in Illinois must register and that contributions are generally due once an employer has paid $1,500 in wages in a calendar quarter or meets other tests. Our Illinois payroll guide walks through that.
Filing and remittance rhythm
| Country | Typical process |
|---|---|
| United States | Deposit on a monthly or semiweekly schedule; file Form 941 on April 30, July 31, October 31 and January 31; send W-2s by January 31 |
| Canada | Regular remitters pay by the 15th of the following month; larger employers remit more often; file T4 slips by the last day of February |
| India | Employer pays provident fund and tax deducted at source on a monthly schedule and files periodic returns; dates and forms are set by the employer's CA, and some forms changed with the Income-tax Rules, 2026 |
Payroll rules in India sit across several laws, and forms and section numbers for income-tax deduction changed when the Income-tax Act, 2025 replaced the 1961 Act on April 1, 2026. Your Indian CA confirms the current provisions. See our India labour and professional tax guide and the payroll filing comparison.
Cross-border coverage and totalization
An employee sent from one country to another can face social security tax in both. Countries solve that with agreements. The IRS explains that such agreements exist to avoid double taxation of income for social security taxes, and a person claiming an exemption from U.S. Social Security and Medicare taxes must generally get a Certificate of Coverage from the home country's social security agency and give it to the U.S. employer. Canada's government lists agreements with both India and the United States, and says they combine contribution periods so people can meet minimum requirements and reduce restrictions on receiving payments abroad, without increasing the payment amount. The U.S. also has agreements with Canada and India. Rules on who qualifies and for how long are in each agreement, so check before an assignment begins. See U.S.-Canada totalization and Social Security and Medicare for foreign workers.
A worked example
Take a salary of 90,000 in local money for illustration only. In Illinois, an employee earning $90,000 below the 2026 wage base pays Social Security of $5,580 and Medicare of $1,305, a total of $6,885, and the employer pays the same, so the combined cost is $13,770 before federal unemployment tax. In Ontario in 2026, an employee earning CAD 90,000 reaches the CPP maximum of $4,230.45 on the first tier, pays EI of $1,123.07 on the insurable earnings of $68,900, and also pays CPP2 on earnings above the first ceiling; the employer pays the matching CPP and 1.4 times EI, or $1,572.30. In India, an employee with Rs 40,000 monthly basic pay and an employer who both contribute on actual wages would each put in Rs 4,800 a month (12%); if contributions are limited to the Rs 15,000 ceiling, each puts in Rs 1,800. Same worker, three systems.
Mistakes to avoid
- Assuming Social Security is exempt because you are a foreign national without checking the visa and agreement rules.
- Forgetting that Canadian CPA and EI have separate ceilings and that CPP2 applies above the first one.
- Treating India's EPF as optional for all employees; the ceiling and coverage rules decide.
- Missing the certificate of coverage before the first U.S. payroll.
- Using last year's wage base, rate or ceiling.
How we can help
Our Aurora, Illinois firm sets up U.S. payroll and coordinates with your Canadian CPA and Indian CA when employees, entities or assignments cross borders. See payroll and employer compliance, hiring U.S. employees from abroad and our Aurora page. More three-country tables are on the comparisons hub.
Frequently asked questions
Do H-1B workers pay Social Security tax?
Generally yes, unless a social security agreement and a valid certificate of coverage apply. We review each assignment.
Is the Social Security wage base the same every year?
No. It is set annually. For 2026 the IRS says it is $184,500.
What is CPP2?
An additional Canada Pension Plan tier on earnings above the first ceiling up to a higher ceiling. The 2025 higher ceiling is $81,200 and the 2026 ceiling is $85,000.
Does India have a tax like Medicare?
India funds health through general taxation and separate employee insurance schemes. The U.S. Medicare tax has no direct equivalent in the EPF.
Who runs payroll in Canada and India for my company?
Your Canadian CPA and Indian CA. We keep the U.S. payroll records consistent with theirs.
Official sources
- IRS: Publication 15, Employer's Tax Guide
- IRS: Totalization agreements
- CRA: CPP contribution rates, maximums and exemptions
- CRA: EI premium rates and maximums
- PIB: Employees' Provident Fund scheme
- Canada.ca: Countries with social security agreements
This page summarizes public guidance in plain language. If anything here differs from the official source, the official source controls.
General information only. It is not tax, legal, accounting or immigration advice for your situation, and rules change; confirm the current rules with the official source or a licensed professional in the relevant country.