CPP rate 2027: the base rate falls to 9.5% — from 9.9% for the self-employed
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 on a fixed monthly fee.
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%.
This page covers contributions. For CPP pension amounts and benefit increases, see Service Canada's CPP pages.
Running payroll? We apply each year's CPP and EI rates in our payroll services.
If you run a payroll, the change lands in your January remittance whether or not you noticed it. How payroll is run here, or ask what it does to yours.
Where we work
CPP applies to every payroll outside Quebec, wherever the business sits. We work with businesses in Abbotsford, Chilliwack, Langley and Mission, across the Fraser Valley, and with owner-managed companies in Vancouver.
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 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 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.
How to calculate your 2027 CPP contribution
Which rate applies to you:
| 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.
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 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?+
Does my 2026 payroll change?+
Is my rate really falling from 9.9%?+
Does this change CPP2?+
What should I do now?+
Will CPP increase in 2027?+
How much will CPP go up in 2027?+
Is CPP going up in 2027?+
What does the lower rate actually save?+
What is the maximum CPP contribution for 2027?+
Where this comes from
Every figure on this page is taken from the source below, not from interpretation:
General information, not tax advice. It cannot account for your circumstances and creates no professional relationship. Before deciding anything, send an enquiry.
Have a question about this?
Ask free through the quick-question form; 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.
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