Your 2026 Salary Sets Your 2027 RRSP Room: The Official Numbers

Reviewed by Bader A. Chowdry, CPA, CA, LPA on October 16, 2026

If you own a Canadian-controlled private corporation (CCPC) in Mississauga or elsewhere in Ontario, the salary you receive before December 31, 2026 does two jobs at once. It sets this year’s payroll cost, and it sets your RRSP room for 2027. The Canada Revenue Agency (CRA) now lists the 2027 RRSP dollar limit, and the Canada Employment Insurance Commission has confirmed the 2027 EI premium rate. The 2027 CPP figures are not on the CRA’s pages yet, so the CPP numbers below are 2026 figures.

What is the 2027 RRSP limit, and how does my 2026 pay change it?

The RRSP dollar limit is $33,810 for 2026 and $35,390 for 2027. Your deduction room each year is generally your unused room, plus the lesser of 18% of the previous year’s earned income and that dollar limit, less any pension adjustment. To create the full 2027 limit, you need 2026 earned income of at least $196,612.

The 2027 figure is not a forecast. The CRA announced it on October 30, 2025, and it appears in the CRA’s table of RRSP, pension and TFSA limits. It follows from section 146(1) of the Income Tax Act (ITA), which ties each year’s RRSP dollar limit to the previous year’s money purchase limit; the 2026 money purchase limit is $35,390. The limit rises by $1,580 from 2026 to 2027.

Divide $35,390 by 18% and you get $196,611.11, so $196,612 is the first whole dollar of 2026 earned income that produces the full amount. The 2026 room of $33,810 needed $187,834 of 2025 earned income. Earning more than the threshold does not add room, because the dollar limit caps it. The CRA’s explanation of the RRSP deduction limit also subtracts any pension adjustment, so an owner who belongs to a registered pension plan should run their own figures.

What counts as earned income matters to owner-managers. The ITA definition lists income from an office or employment, income from a business you carry on, and rental income or royalties, among other items. Dividends are not on the list. Salary and bonuses your corporation pays you add to earned income and appear on your T4; a dividend from the same corporation does not.

Timing matters too. Under section 5(1) of the ITA, employment income is salary, wages and other remuneration “received by the taxpayer in the year.” A bonus accrued on the corporation’s books but unpaid at year-end is a different question; our guide to accruing a bonus and paying it within 179 days covers the corporate side.

Here is an illustrative example. An owner-manager receives $120,000 of salary in 2026, with no pension adjustment and no other earned income. Eighteen percent of $120,000 is $21,600 of new RRSP room for 2027, below the $35,390 ceiling. Any unused room from earlier years is added on top. The $120,000 is a round number we chose, not a recommendation, and reaching the ceiling is not automatically the right goal: salary also affects personal income tax, corporate cash flow and CPP.

What do the 2027 EI numbers change for my payroll budget?

From January 1, 2027, the employee EI premium rate is 1.64% on maximum insurable earnings of $70,800, up from $68,900 in 2026. The maximum annual premium becomes $1,161.12 per employee, and $1,625.57 for the employer because employers pay 1.4 times the employee amount. These apply to insured employees, not to an owner whose voting shareholding is above 40%.

The source is Employment and Social Development Canada’s September 14, 2026 news release, which puts the employee rate at $1.64 for every $100 of insurable earnings, with employers paying $2.30. The CRA’s EI premium table already shows a “New 2027” row with the same figures; its 2026 row is 1.63% on $68,900, with maximums of $1,123.07 for the employee and $1,572.30 for the employer.

The maximum worker premium therefore rises by $38.05 and the employer maximum by $53.27 per employee. As an illustrative example, a corporation with 10 employees who each earn at least $70,800 would pay $532.70 more in employer premiums in 2027 than in 2026 (10 times $53.27). Employees earning less than the ceiling pay on their actual earnings, so their increase is smaller. Update the rate and ceiling in your payroll software before the first 2027 pay date.

Do I pay EI on my own salary if I own the corporation?

Generally not, if you control over 40% of the corporation’s voting shares. Section 5(2)(b) of the Employment Insurance Act, which is in force, takes a corporation’s employee out of insurable employment when that person holds control of over 40% of the corporation’s voting shares. In that case neither you nor the corporation pays EI premiums on your pay. Your other employees are still insured, and family members need a closer look.

The rule is in section 5 of the Employment Insurance Act, and the CRA repeats it on its page about pensionable and insurable employment. The CRA’s own example has two siblings with an equal 50% stake each in their corporation’s voting shares; neither sibling’s employment is insurable, because each holds over 40%.

An owner in this position can still opt in to EI special benefits by registering with the Canada Employment Insurance Commission, the same route self-employed people use, as the CRA’s CPP and EI explainer notes. Read the terms before deciding.

A spouse or adult child on the payroll who does not control more than 40% is a different case. The Act also excludes employment between parties who do not deal at arm’s length, but section 5(3)(b) lets related persons be treated as dealing at arm’s length where the Minister of National Revenue accepts that unrelated parties would have agreed to a substantially similar contract, looking at the pay, the terms and conditions, how long the work lasts, and what the work is and how much it matters. That turns on facts, so settle it before the T4 is issued.

How much CPP and CPP2 does my salary trigger in 2026?

For 2026, CPP is 5.95% on pensionable earnings between the $3,500 basic exemption and the $74,600 year’s maximum pensionable earnings (YMPE), a maximum of $4,230.45 each for the employee and the employer. CPP2 adds 4% on earnings from $74,600 to $85,000, a maximum of $416 each. A salary of $85,000 or more reaches both maximums.

These are the CRA’s 2026 figures, from its CPP rates and maximums table and its CPP2 table. When we checked on October 15, 2026, both tables listed 2026 as their most recent year, so we do not quote a 2027 CPP or CPP2 figure.

When you are both the employee and, through your corporation, the employer, both sides are yours. At $85,000 of salary or more, the maximum is $4,230.45 plus $416, or $4,646.45 for each side and $9,292.90 for the two. The CRA says an employer must contribute an amount equal to the CPP it deducts from employees aged 18 to 69 and remit both amounts.

Above $85,000 of salary, no more CPP or CPP2 is payable in 2026, so the trade-off for extra salary beyond that point is about income tax and cash flow, not CPP.

What should I check before December 31, 2026?

Check four things: how much salary you will actually be paid in 2026, whether it is paid and not just accrued by December 31, what CPP and CPP2 it triggers, and whether your payroll remittance schedule is current. A regular remitter pays source deductions by the 15th day of the next month, so December pay is remitted by January 15, 2027.

First, pick a target on purpose: if RRSP room is part of your plan, $196,612 of 2026 earned income is the most that adds to 2027 room. Second, confirm payment: section 5(1) of the ITA looks at when remuneration is received, so a bonus declared on December 31 but paid in the new year does not behave like salary paid in 2026.

Third, check the payroll side. The CRA’s remitting rules say regular remitters, with an average monthly withholding amount from $0 to $24,999.99, pay on the 15th of the next month; other remitter types have different dates. Fourth, if you employ others, check Ontario’s Employer Health Tax (EHT). The Ontario EHT page says the exemption amount is currently $1 million, and that an eligible employer whose yearly Ontario payroll stays under that amount owes no EHT.

A change to your salary changes your corporation’s T2 and corporate tax for the year and your personal T1 at the same time, which is why we model salary, dividend, CPP and RRSP room together.

Frequently asked questions

Do dividends from my corporation create RRSP room?

No. RRSP room is built from earned income, and the Income Tax Act definition lists items such as income from an office or employment, a business, and rental property or royalties. Dividends are not among them. Salary or bonuses your corporation pays you count when you receive them in the year, and the dollar limit caps the room each year.

Is the 2027 RRSP limit confirmed or an estimate?

It is confirmed. The CRA announced the 2027 RRSP limit of $35,390 on October 30, 2025, together with its 2026 limits, and its limits table lists it. The Income Tax Act sets each year’s RRSP dollar limit equal to the previous year’s money purchase limit. Use the CRA’s table rather than a rounded estimate.

Are the 2027 CPP and CPP2 figures published yet?

Not on the CRA’s CPP and CPP2 tables when we checked on October 15, 2026; both listed 2026 as the latest year. The 2026 earnings ceilings are $74,600 and $85,000. We treat any 2027 CPP figure as unconfirmed until the CRA lists it, and this guide does not quote one.

Does Ontario Employer Health Tax apply to my corporation?

If your corporation is eligible for the exemption and its yearly Ontario payroll stays under the exemption amount, currently $1 million, it owes no EHT. The exemption is not available at all once your payroll, combined with that of any associated employers, is above $5 million. Check the whole group’s payroll, not only your own pay.