2027 YMPE and CPP Changes: What Owner-Managers Set Now

Reviewed by Bader A. Chowdry, CPA, CA, LPA on November 9, 2026

The 2027 YMPE is $76,700 and the 2027 YAMPE is $87,400, according to the Canada Revenue Agency’s published limits, and Bill C-30, which received Royal Assent in June 2026, would bring the base CPP contribution rate down to 9.5%, from 9.9%, for 2027 once its CPP part is brought into force by order in council. For an Ontario owner-manager in Mississauga or across the GTA, these numbers reset the salary you plan for next year. CRA has not yet posted the 2027 CPP maximum contributions, so no payroll figure for 2027 should be locked in until it does.

What CRA has published for 2027, and what it has not

CRA’s table of registered plan limits now carries a 2027 row. It shows a year’s maximum pensionable earnings (YMPE) of $76,700 and a year’s additional maximum pensionable earnings (YAMPE) of $87,400, against $74,600 and $85,000 for 2026 (CRA limits table). The same table sets the RRSP dollar limit at $35,390 for 2027 and $36,390 for 2028.

The CPP payroll table is a different page, and it has not caught up. On November 6, 2026 CRA’s CPP contribution rates table still ends at 2026: a basic exemption of $3,500, maximum contributory earnings of $71,100, a rate of 5.95% each for employee and employer, and a maximum contribution of $4,230.45 each, or $8,460.90 for a self-employed person.

The CPP2 table also ends at 2026. In 2026, CPP2 is 4% each on earnings between the YMPE and $85,000, to a maximum of $416 each, or $832 self-employed. The TFSA table likewise shows $7,000 for 2026 and no 2027 row yet.

So the ceilings for 2027 are known, but the contribution amounts are not. Any 2027 maximum you see quoted today is someone’s arithmetic, not CRA’s published figure.

Bill C-30 has passed: the 2027 base CPP rate and what is still pending

Bill C-30, the Spring Economic Update 2026 Implementation Act, has received Royal Assent and is Statutes of Canada 2026, c. 22, according to its LEGISinfo record. Its Canada Pension Plan division, passed but not yet in force, sets the base contribution rate for 2027 and each later year at 4.75% each for employees and employers and 9.5% for the self-employed (the Act, s.43). The Department of Finance presents the passed change as a cut in the combined base CPP rate to 9.5% from 9.9%, with 2027 as the first year (Finance release).

That division has passed but is not yet in force. Section 44(2) of the Act leaves its start to a day that an order of the Governor in Council will fix, and the Justice Laws consolidation of the Canada Pension Plan, current to October 19, 2026, still lists these amendments as not in force. We have not confirmed whether that order has been made since then, so treat the 2027 rate cut as passed law waiting for its start date, not as a rate already in effect.

If the passed change applies from 2027 as Finance describes, Finance puts the effect at about $133 a year for an employee earning $70,000, with a matching amount for the employer. That is Finance’s own estimate for one income level, not a figure for your payroll.

Two cautions follow. First, the 9.9% and 9.5% figures are the combined base rate as Finance describes it (passed, Royal Assent June 2026, not yet in force); they are not the 5.95% employee rate on CRA’s payroll table, which also reflects the CPP enhancement. Second, CRA has not yet published the 2027 employee and employer rate that payroll software will use. Do not set a 2027 deduction rate by hand from the Finance release or the Act; wait for CRA’s 2027 row.

EI premiums for 2027

Employment Insurance moves on its own schedule. The Canada Employment Insurance Commission has fixed the 2027 premium: from January 1, 2027, employees pay $1.64 and employers $2.30 on every $100 of insurable earnings, the employer share being 1.4 times the employee share (ESDC release).

CRA’s EI table already carries the 2027 row. Outside Quebec, maximum insurable earnings rise to $70,800 in 2027 from $68,900 in 2026, the rate moves to 1.64% from 1.63%, and the maximum annual premium becomes $1,161.12 for an employee and $1,625.57 for an employer, against $1,123.07 and $1,572.30 for 2026. Quebec has its own, lower rate on the same page.

EI does not reach every owner-manager’s salary. Under the Employment Insurance Act, s.5, employment by a corporation is not insurable if the person controls more than 40% of its voting shares, and employment between an employer and employee who are not dealing at arm’s length is excluded too. Related persons can still be treated as dealing at arm’s length if the Minister of National Revenue is satisfied the terms are what unrelated parties would have agreed. For family members on payroll that turns on the facts of each job, so settle it per person rather than assuming it either way.

Why the timing of a December salary or bonus matters

Under the Income Tax Act, employment income for a year is the salary and other remuneration received in that year (ITA s.5(1)). A bonus paid on December 30, 2026 is 2026 income on your T1 and on your T4 slip; the same bonus paid on January 4, 2027 is 2027 income.

That date also decides which year’s RRSP room the salary builds. Under ITA s.146(1), new RRSP room for a year is the lesser of that year’s RRSP dollar limit and 18% of the previous year’s earned income. Salary received in 2026 feeds 2027 room, capped at $35,390. Salary received in 2027 feeds 2028 room, capped at $36,390.

Dividends follow a different calculation. The full salary versus dividend comparison runs through the small business deduction, integration and the Ontario dividend tax credit, set out in Salary vs Dividend 2026 Year-End. The RRSP side is covered in Your 2026 Salary Sets Your 2027 RRSP Room.

What an LPA adds: one decision rule for 2027 compensation

Restating CRA’s table is the easy part. The judgment is in matching the salary target to the goal, because the 2027 numbers give an owner-manager three different targets, and each one answers a different question.

The decision rule

Pick the goal first, then the salary. If the goal is full base CPP for 2027, the earnings target is the YMPE of $76,700. If the goal includes full CPP2, the target is the YAMPE of $87,400. If the goal is the full 2028 RRSP dollar limit, the target is about $202,167 of 2027 earned income, because 18% of that amount reaches $36,390. A salary set for one goal does not deliver the others, and a mixed salary-and-dividend plan should name which goal the salary is meant to serve.

The common failure mode

A common failure at this time of year is a January payroll run that carries the 2026 limits forward, or a deduction rate typed in from a news release. The first under-deducts once earnings pass $74,600, because the 2027 ceiling is higher. The second applies a rate CRA has not published. Both create a correction at T4 time and, for a corporation, a remittance problem that sits on the CCPC’s payroll account until it is fixed.

Illustrative example

Illustrative example, with stated assumptions: one shareholder-employee of an Ontario CCPC, paid only salary, with no other employment. In 2026, a salary of $74,600 reaches the YMPE. In 2027 the same salary falls short of the YMPE by $2,100, because the ceiling moved from $74,600 to $76,700. The CPP2 band, the slice of earnings between the YMPE and the YAMPE, widens from $10,400 in 2026 to $10,700 in 2027, as the YAMPE rises by $2,400.

On the RRSP side, the same person needed about $196,612 of 2026 earned income for the full 2027 dollar limit of $35,390, and needs about $202,167 of 2027 earned income for the full 2028 limit of $36,390. We have not computed any 2027 CPP contribution amount, because CRA has not published the 2027 rate and maximums; those figures will come from CRA’s table, not from this example.

A year-end checklist for the next eight weeks

• Decide, before December 31, 2026, whether a bonus or extra salary is meant to be 2026 income or 2027 income, and pay it on the right side of the date.
• Confirm the 2026 salary is reported on the T4 and any dividends on the T5, and that the corporation’s T2 records match both.
• Do not change payroll settings for 2027 until CRA posts its 2027 CPP row, then check the YMPE of $76,700, the YAMPE of $87,400 and the new rate against it.
• Keep regular payroll remittance dates in view through the change of year; the payroll remittance due dates article lists them.
• Ontario’s Employer Health Tax runs on the same calendar year: an eligible employer’s exemption is $1 million of annual Ontario payroll, no exemption is available once the associated group’s payroll passes $5 million, and the annual return is due by March 15 of the following year (Ontario EHT guide).
• Recheck the salary target against the goal: full CPP, full CPP2, or full RRSP room, as set out in the decision rule above.
• Load the 2027 EI maximums from CRA’s EI table, which already shows them, and note what is still open: the 2027 TFSA limit and the 2027 CPP maximums were not on CRA’s pages on November 6, 2026.

What is still open

Three pieces are still open: CRA’s 2027 CPP and CPP2 rows, the order in council for Bill C-30’s CPP rate change, which has passed but is not yet in force, and the 2027 TFSA dollar limit. The 2027 EI maximums are already posted. Until each open piece is settled, plan with the ceilings that are published and leave the CPP contribution amounts blank. When CRA’s rows appear, compare them with the ceilings above before the first 2027 pay run.