What is the news?
Bill C-30 received Royal Assent on June 19, 2026. Effective January 1, 2027, the Canada Pension Plan’s combined base contribution rate will decrease from 9.9% to 9.5%.
- Effective date
- January 1, 2027
- Employee base share
- 4.75%, down from 4.95%
- Employer base share
- 4.75%, down from 4.95%
The first additional CPP rate remains 1% each for employees and employers. That makes the total first-band rate 5.75% each in 2027: 4.75% base plus 1% first additional. The CPP2 rate on earnings between the year’s maximum pensionable earnings and the additional maximum remains 4% each.
Confirmed 2027 earnings ceilings
On October 28, 2026, CRA confirmed the earnings ceilings that apply from January 1, 2027:
- First earnings ceiling (YMPE)
- $76,700 in 2027
- Second earnings ceiling (YAMPE)
- $87,400 in 2027
The first ceiling is the top of the earnings band used for base and first additional CPP contributions. CPP2 applies to earnings above it, up to the second ceiling. These are contribution limits, not monthly pension amounts.
CRA's October 28 announcement · Official year-by-year limits
Who is affected?
Employees and employers who contribute to the CPP are affected. Self-employed workers pay both the employee and employer shares. Quebec Pension Plan contributors are subject to separate QPP rules.
What is the impact?
The Department of Finance estimates that an employee earning $70,000 will save about $133 in 2027, with a matching saving for the employer. Your own contribution change depends on your earnings and contribution status, including the confirmed 2027 ceilings above.
The Office of the Chief Actuary concluded that the lower base rate is sufficient to sustain the base CPP over the long term. The earnings ceilings are now confirmed. Check CRA's latest payroll tables for published maximum contribution totals; the table checked on November 2 still lists 2026 only.
A simple CPP2 example
Hypothetical illustration: Assume a full-year employee has $80,000 of CPP-pensionable earnings in 2027 and contributes throughout the year, with no election or partial-year adjustment. The CPP2 earnings band is $80,000 − $76,700 = $3,300. At the employee CPP2 rate of 4%, this component is $132.
This is CPP2 alone, not total CPP contributions or a take-home-pay estimate. The employer pays a matching component; a self-employed contributor pays both shares. Official CPP2 explanation.
What should you do?
No application is required. If you work and contribute to CPP in 2027, check that the new rate is reflected in your payroll deductions or self-employment calculations. People already receiving CPP retirement benefits who continue working should also understand how post-retirement contributions apply.
Official sources
General educational information only—not financial, pension, tax, payroll, or legal advice. Confirm 2027 contribution amounts with the Canada Revenue Agency when the official payroll tables are published.