2027 CPP, EI and tax changes for Canadian employers

2027 at a glance

The CRA has published the 2027 CPP, CPP2 and EI figures. The federal tax brackets, the basic personal amount and the January 2027 payroll formulas are not out yet. Figures as of November 11, 2026:

CPP: a lower rate on a higher ceiling

Bill C-30, which received Royal Assent on June 19, 2026, cuts the base CPP contribution rate from 9.9% to 9.5% combined from 2027: 4.75% each for employee and employer instead of 4.95%. The first additional contribution (1% each, part of the CPP enhancement) does not change. So the rate you deduct on earnings between the $3,500 exemption and the YMPE goes from 5.95% to 5.75%.

At the same time the ceiling rises to $76,700. The two partly cancel out: the maximum employee contribution falls only slightly, from $4,230.45 to $4,209.00. Employees under the ceiling see the largest change, because every dollar they earn is deducted at the lower rate.

• The basic exemption stays at $3,500 a year, prorated per pay period.
• The employer matches the employee's contribution dollar for dollar.
• Quebec employees pay QPP to Revenu Québec instead. Revenu Québec publishes its own 2027 QPP and QPIP figures; check them separately.
• The exemptions don't change: no CPP on pay before and in the month an employee turns 18 or after the month they turn 70, and none for an employee aged 65 to 70 who has given you an election to stop (Form CPT30).

CPP2: $87,400

The second additional contribution (CPP2) applies to earnings between the YMPE and the year's additional maximum pensionable earnings (YAMPE). For 2027 that band is $76,700 to $87,400, at 4% each for employee and employer, so the most either pays is $428 (self-employed: $856). Bill C-30 does not change CPP2.

CPP2 has no basic exemption, and it starts only once an employee's earnings for the year pass the YMPE, which for most people is late in the year. Make sure your payroll keeps deducting CPP2 after base CPP stops.

EI: 1.64% on $70,800

For 2027 the maximum insurable earnings rise to $70,800 and the employee premium rate goes up a little, to 1.64% (1.63% in 2026). The employee maximum is $1,161.12; the employer pays 1.4 times the employee premium, up to $1,625.57 per employee, unless the CRA has approved a reduced rate for your business.

In Quebec, where the provincial plan (QPIP) covers parental benefits, the EI rate is 1.29% (maximum $913.32, employer $1,278.65). QPIP itself is set by Quebec.

Income tax: what is still pending

Federal brackets and credits are indexed to inflation each year. For 2026 the indexation was 2.0%, with the 14% rate up to $58,523 and a basic personal amount of $16,452. As of November 11, 2026, the CRA has not published:

• the 2027 indexation rate, federal brackets and basic personal amount;
• the 2027 provincial and territorial brackets and credits, except that British Columbia has paused indexation of its brackets and credits at 2026 levels for 2027 to 2030;
• T4127, Payroll Deductions Formulas, January 2027 edition, and the T4032 tables that come from it. These are what payroll software actually uses for January pays.

We will update this article when they are out. Employees don't need new TD1 forms just because amounts are indexed; a new TD1 is only needed when their situation changes.

What it means for one employee

Take an employee in Ontario earning $60,000 a year:

The employee keeps $107 more of the same pay, and the employer saves $113 of CPP, less $8.40 more of EI. Income tax will change too once the 2027 indexed brackets are known. (Annual figures; per-pay deductions round slightly differently.)

Getting ready for January

1. Close out 2026 first. Check each employee's CPP, CPP2 and EI against the 2026 maximums before the T4s: see the T4 box-by-box guide.
2. Make sure your payroll resets the CPP, CPP2 and EI year-to-date totals for the first pay paid in 2027, even if it covers work in December.
3. Use the 2027 rates from that first January pay, and the January 2027 T4127 formulas for income tax once the CRA releases them.
4. For Quebec employees, apply Revenu Québec's 2027 QPP, QPIP and tax figures.
5. Note your remittance schedule for 2027: it depends on your average monthly withholding from two years before. See CRA remittance schedules.

Sources: CRA pages for CPP, CPP2 and EI rates and maximums (updated November 2026), CRA "Adjustment of personal income tax and benefit amounts", and Finance Canada on Bill C-30. AcboBooks runs Canadian payroll with the CRA's 2026 formulas, including the July 2026 edition; the 2027 CPP, EI and tax figures come in an update once the CRA publishes the January 2027 formulas. The Canadian payroll calculator shows a 2026 pay with the same code.

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