yeah, crate size is most likely, and if not see a vet. it isn't normal for dogs to pee where they sleep, unless they just can't hold it anylonger and it is involuntary. Lots of pups have small bladders though, so maybe the pup just needs out of the crate more often. Are you feeding and giving water on a schedule? that can help too because you can have a better idea of when pup needs out, and the pup will have a better understanding of when it will get let out.
when is it happening? daytime while you are gone, night time while you sleep?