--- title: "Will CPP Go Up in 2027? The Base Rate Drops to 4.75% and 9.5%" url: https://www.everstonecpa.com/tax-update/cpp-base-rate-reduction description: "Will CPP increase in 2027? The base rate falls — 4.95% to 4.75%, 9.9% to 9.5% self-employed. See what the reduction saves, and what moves separately." type: tax-update updated: 2026-10-06 summary: "The base Canada Pension Plan contribution rate drops effective 1 January 2027. The employee and employer rates each fall from 4.95% to 4.75%, and the self-employed rate — which is both halves — falls from 9.9% to 9.5%." faq_count: 10 publisher: EverStone CPA Inc., a Chartered Professional Accountant firm registered with CPA British Columbia and CPA Alberta service_area: British Columbia, Alberta, Ontario and Manitoba language: en-CA contact: info@everstonecpa.com · https://www.everstonecpa.com/book-online --- [Home](https://www.everstonecpa.com/) [Tax updates](https://www.everstonecpa.com/tax-updates) CPP rate 2027: the base rate falls to 9.5% Payroll # CPP rate 2027: the base rate falls to 9.5% — from 9.9% for the self-employed By EverStone CPA · Updated August 2026 A contribution rate lands in every pay run from the first cheque of the year, and the year it changes is the year it gets missed. If payroll is something you would rather not re-check each January, [we run it](https://www.everstonecpa.com/payroll-services-canada) on a fixed monthly fee. The figures on this page, in one view. **Quick answer:** The base Canada Pension Plan contribution rate drops effective 1 January 2027. The employee and employer rates each fall from 4.95% to 4.75%, and the self-employed rate — which is both halves — falls from 9.9% to 9.5%. **Running payroll for 2027?** We load the new CPP and EI rates, run each pay and file the remittances and T4s, with payroll included in bookkeeping from $325 a month. [Get My Fixed Quote](https://www.everstonecpa.com/book-online?service=payroll#enquiry-form) This page covers contributions. For CPP pension amounts and benefit increases, see [Service Canada's CPP pages](https://www.canada.ca/en/services/benefits/publicpensions/cpp.html). Running payroll? We apply each year's CPP and EI rates in our [payroll services](https://www.everstonecpa.com/payroll-services-canada). If you run a payroll, the change lands in your January remittance whether or not you noticed it. [How payroll is run here](https://www.everstonecpa.com/payroll-services-canada), or [ask what it does to yours](https://www.everstonecpa.com/quick-question). ## Where we work CPP applies to every payroll outside Quebec, wherever the business sits. We work with businesses in [Abbotsford](https://www.everstonecpa.com/accountant-abbotsford), [Chilliwack](https://www.everstonecpa.com/accountant-chilliwack), [Langley](https://www.everstonecpa.com/accountant-langley) and [Mission](https://www.everstonecpa.com/accountant-mission), across [the Fraser Valley](https://www.everstonecpa.com/accountant-fraser-valley), and with owner-managed companies in [Vancouver](https://www.everstonecpa.com/accountant-vancouver). **In force** · 1 January 2027 This measure is law and applies now. ## How CPP contributions work CPP contributions are split between employee and employer, each paying a rate on the employee’s pensionable earnings. A self-employed person pays both halves, so the self-employed rate is exactly double the employee rate. The two are often confused in coverage. From 1 January 2027 the base rate falls: employees 4.95% to 4.75%, employers the same, and the self-employed 9.9% to 9.5%. This is the base CPP rate only. The separate CPP2 contribution on earnings above the year’s maximum pensionable earnings is not changed by this. A CPP rate cut is not a tax cut. [CPP contributions](https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/canada-pension-plan-cpp.html) buy pension entitlement, so a lower rate trims a mandatory saving as much as a cost. Whether this applies to you depends on your year-end and structure; [ask about your own situation](https://www.everstonecpa.com/quick-question) and a CPA replies, usually the same business day, free. Contributions apply to a band: nothing on the first $3,500 or above the annual ceiling, so the saving is less than salary times 0.2%. The 2027 CPP maximum contribution is not set yet: it is the base rate applied to earnings up to the maximum pensionable earnings ceiling, announced each November. ## How it applies to you Every employer, every employee, and every self-employed individual. The 9.9% in most coverage is the self-employed rate; employees see their own rate move 0.2 points, from 4.95% to 4.75%, not 0.4. Put together, the 2027 CPP rates are 4.75% for employees, 4.75% for employers and 9.5% for the self-employed. An incorporated owner-manager on salary gains twice, because the corporation pays the employer half. **Running payroll, or paying yourself?** The new rate lands in your first 2027 pay run, and in your own CPP if you are self-employed. EverStone runs payroll with each year’s rate changes built in, as part of monthly bookkeeping from $325 a month, and prepares the T1 and T2 for owners who pay themselves. See [our payroll service](https://www.everstonecpa.com/payroll-services-canada), or [ask for a fixed fee](https://www.everstonecpa.com/book-online?service=payroll#enquiry-form). [Get My Fixed Quote](https://www.everstonecpa.com/book-online?service=payroll#enquiry-form) ## How to calculate your 2027 CPP contribution Which rate applies to you: Calculation steps | Step | Detail | | Employee | 4.95% falls to 4.75% | | Employer, on each employee | 4.95% falls to 4.75% | | Self-employed (both halves) | 9.9% falls to 9.5% | | CPP2 | unchanged by this | Nothing changes for 2026 payroll. The reduction starts with the first pay period of 2027, so a 2026 remittance calculated at the new rate would be wrong. Worth building into a 2027 budget, but not into this year’s. For the year in progress, see [every 2026 CPP and EI maximum in one table](https://www.everstonecpa.com/tax-update/payroll-figures-2026). ## What changed for CPP in January 2027 The 9.9% in most coverage is the self-employed rate. Employees see 4.95% fall to 4.75%, and employers the same. The separate CPP2 contribution is unchanged. ## What to do Check that your payroll software has the change before trusting January 2027 withholding. Updates can lag, and CPP errors are unforgiving. The self-employed save the full 0.4 points, paying both halves, so the biggest benefit goes to those who felt the cost most. Do not restate 2026 figures. The rate for this year is unchanged. **The practical point.** Nothing changes for 2026 payroll; the cut starts with the first 2027 pay period. Budget for it, but check your payroll software has it. Until the 2027 tables take effect, the [payroll deduction calculator](https://www.everstonecpa.com/payroll-deduction-calculator) shows what comes off a pay cheque at the current 2026 rates. Running payroll through us costs from $325 a month, with bookkeeping and GST/PST filings in the same package. ## The terms used on this page Base CPP rate The main CPP contribution rate, applied to pensionable earnings up to the annual ceiling. Pensionable earnings The earnings CPP is calculated on, between the basic exemption and the annual ceiling. Self-employed rate Both halves combined, because a self-employed person is their own employer. ## Common questions about CPP rate 2027: the base rate falls to 9.5% **How much will CPP increase in January 2027?** They do not increase in January 2027; the base rate falls. Employees and employers each go from 4.95% to 4.75%, the self-employed from 9.9% to 9.5%. The 2027 ceiling is announced in November. CPP pension payments get a separate January 2027 inflation increase from ESDC, not covered here. **Does my 2026 payroll change?** No. Nothing changes for 2026. The reduction starts with the first pay period of 2027, so a 2026 remittance calculated at the new rate would be wrong. **Is my rate really falling from 9.9%?** Only if you are self-employed. The 9.9% figure quoted in most coverage is the self-employed rate. An employee sees 4.95% fall to 4.75%, and the employer sees the same reduction on its side. **Does this change CPP2?** No. This is the base CPP rate and does not change the separate CPP2 contribution. **What should I do now?** Build it into a 2027 budget, not this year’s — and confirm your payroll software has picked it up before relying on the withholding. **Will CPP increase in 2027?** The contribution *rate* does not — it falls, from 4.95% to 4.75% for employees and employers each, and from 9.9% to 9.5% for the self-employed. Whether the dollars you contribute rise depends on the year’s maximum pensionable earnings, which the CRA sets each November. [Ask about your case →](https://www.everstonecpa.com/quick-question) **How much will CPP go up in 2027?** On the rate alone it goes down, not up: 0.2 percentage points off each of the employee and employer shares, and 0.4 off the self-employed rate. An employee earning below the year’s ceiling therefore contributes less on the same salary than in 2026. **Is CPP going up in 2027?** The base rate is going down. Unchanged by this, and moving separately: the pensionable earnings ceiling, announced each November, and CPP2 on earnings above it. **What does the lower rate actually save?** Two tenths of a point of pensionable earnings for an employee, the same for the employer, and four tenths for the self-employed. Run it on your own payroll before budgeting. **What is the maximum CPP contribution for 2027?** It is not set yet. The maximum is the rate applied to earnings up to the ceiling, announced each November. This base rate applies up to it; CPP2 applies above and is unchanged. ## Where this comes from Every figure on this page is taken from the source below, not from interpretation: - [Spring Economic Update 2026 — Tax measures: supplementary information](https://budget.canada.ca/update-miseajour/2026/report-rapport/tm-mf-en.html) **General information, not tax advice.** It cannot account for your circumstances and creates no professional relationship. Before deciding anything, [send an enquiry](https://www.everstonecpa.com/book-online?service=payroll#enquiry-form). 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Ask free through [the quick-question form](https://www.everstonecpa.com/quick-question); a CPA replies by email within one business day. For a proper look, a 45-minute **Advice Call** with a CPA is $225 plus GST, booked by email, credited against your first invoice if you become a client within 60 days. Want an accountant to take it on? [Send an enquiry](https://www.everstonecpa.com/book-online?service=payroll#enquiry-form). [Ask a Free Question](https://www.everstonecpa.com/quick-question) [Book a Paid Advice Call](https://www.everstonecpa.com/advice-call) Email info@everstonecpa.com ★★★★★ “…We switched to him last year for both our personal and small-business taxes — responsive, knowledgeable and quick.” Heather Powers · Google review --- Source: https://www.everstonecpa.com/tax-update/cpp-base-rate-reduction Prices: https://www.everstonecpa.com/pricing · Contact: info@everstonecpa.com · https://www.everstonecpa.com/book-online