Reference · US and Canada · Updated October 2026
Payroll tax rates for 2026 and 2027
Social Security, Medicare, FUTA and state unemployment in the US; CPP, EI, QPP, QPIP and provincial tax in Canada. The 2026 figures, and the 2027 figures that have been announced, each with its official source.
Federal payroll taxes (IRS and SSA)
| Item | 2026 | 2027 |
|---|---|---|
| Social Security (OASDI) tax rate | 6.2% employee + 6.2% employer | 6.2% + 6.2% (set by law) |
| Social Security wage base No Social Security tax on an employee's wages above this for the year. | $184,500 | $192,300 (announced by the SSA, Oct 14, 2026) |
| Maximum Social Security tax per employee | $11,439 each for employee and employer | $11,922.60 each |
| Medicare tax rate | 1.45% employee + 1.45% employer, no wage limit | 1.45% + 1.45% (set by law) |
| Additional Medicare Tax No employer match. The employee settles any difference with their filing status on Form 1040. | 0.9% employee only, withheld on wages over $200,000 in the year | 0.9% over $200,000 (set by law, not indexed) |
| FUTA tax Source: IRS Instructions for Form 940 | 6.0% on the first $7,000 per employee; 0.6% after the full 5.4% state credit (at most $42) | 6.0% on $7,000 (set by law) |
| FUTA credit reduction states A credit reduction raises the FUTA you owe for employees in that state; it is paid with Form 940 (Schedule A). | 2026 list due from the DOL after November 10, 2026. California is the only potential state (1.5% base reduction); the US Virgin Islands repaid its loans. For 2025: California 1.2%, US Virgin Islands 4.5%. | Not announced yet |
| Supplemental wage withholding (bonuses, commissions) Or combine with regular wages and withhold on the total. Confirmed for 2027 when Publication 15 for 2027 is out. | 22% flat; 37% on supplemental wages over $1 million in the year | Not announced yet |
| Federal income tax withholding The IRS normally publishes the 2027 Publication 15-T in December 2026. See the 2026 annual schedule below. | Publication 15-T (2026) percentage method or wage bracket tables, from the employee's Form W-4 (2020 or later) or an older W-4 | Not announced yet |
As of October 25, 2026. “Not announced yet” means the IRS or SSA has not published the 2027 figure; we update this page when it does.
By state
State income tax on wages
Unemployment tax (SUTA) taxable wage base
2027: Not announced yet
New employer SUTA rate, 2026
3.4% for two to three years. Plus ETT 0.1% on same $7,000.
Disability and paid leave programs
State Disability Insurance (SDI), including Paid Family Leave (PFL)
Who pays: Employee
2026: 1.3%. Wage cap: No cap (all wages subject to SDI since 2024-01-01)
2027: Not announced yet
What changes for 2027
- US Social Security wage base: $192,300 (from $184,500). Rates unchanged.
- Canada CPP: the base rate drops to 4.75% each (5.75% with the first additional contribution) under Bill C-30. CPP2 stays at 4%.
- Canada EI: 1.64% on up to $70,800 (1.29% in Quebec).
- Not announced yet as of October 25, 2026: the 2027 Publication 15-T withholding tables, the 2026 FUTA credit reduction list (after November 10), most 2027 state unemployment wage bases, the 2027 YMPE and YAMPE, the indexed 2027 federal and provincial brackets and basic personal amounts, and 2027 QPP and QPIP figures.
United States: the federal figures
| Item | 2026 | 2027 |
|---|---|---|
| Social Security (OASDI) tax rate | 6.2% employee + 6.2% employer | 6.2% + 6.2% (set by law) |
| Social Security wage base | $184,500 | $192,300 (announced by the SSA, Oct 14, 2026) |
| Maximum Social Security tax per employee | $11,439 each for employee and employer | $11,922.60 each |
| Medicare tax rate | 1.45% employee + 1.45% employer, no wage limit | 1.45% + 1.45% (set by law) |
| Additional Medicare Tax | 0.9% employee only, withheld on wages over $200,000 in the year | 0.9% over $200,000 (set by law, not indexed) |
| FUTA tax | 6.0% on the first $7,000 per employee; 0.6% after the full 5.4% state credit (at most $42) | 6.0% on $7,000 (set by law) |
| FUTA credit reduction states | 2026 list due from the DOL after November 10, 2026. California is the only potential state (1.5% base reduction); the US Virgin Islands repaid its loans. For 2025: California 1.2%, US Virgin Islands 4.5%. | Not announced yet |
| Supplemental wage withholding (bonuses, commissions) | 22% flat; 37% on supplemental wages over $1 million in the year | Not announced yet |
| Federal income tax withholding | Publication 15-T (2026) percentage method or wage bracket tables, from the employee's Form W-4 (2020 or later) or an older W-4 | Not announced yet |
2026 federal income tax withholding schedule (annual, W-4 from 2020 or later)
The IRS percentage method for automated payroll, Step 2 box not checked. Annualize the wages, subtract $8,600 ($12,900 for married filing jointly) as Publication 15-T worksheet 1A line 1g says, then apply the rate to the amount over the bracket start and add the base tax.
| Bracket | Single or married filing separately | Married filing jointly | Head of household |
|---|---|---|---|
| Bracket 1 | Over $0: $0 + 0% | Over $0: $0 + 0% | Over $0: $0 + 0% |
| Bracket 2 | Over $7,500: $0 + 10% | Over $19,300: $0 + 10% | Over $15,550: $0 + 10% |
| Bracket 3 | Over $19,900: $1,240 + 12% | Over $44,100: $2,480 + 12% | Over $33,250: $1,770 + 12% |
| Bracket 4 | Over $57,900: $5,800 + 22% | Over $120,100: $11,600 + 22% | Over $83,000: $7,740 + 22% |
| Bracket 5 | Over $113,200: $17,966 + 24% | Over $230,700: $35,932 + 24% | Over $121,250: $16,155 + 24% |
| Bracket 6 | Over $209,275: $41,024 + 32% | Over $422,850: $82,048 + 32% | Over $217,300: $39,207 + 32% |
| Bracket 7 | Over $263,725: $58,448 + 35% | Over $531,750: $116,896 + 35% | Over $271,750: $56,631 + 35% |
| Bracket 8 | Over $648,100: $192,979.25 + 37% | Over $788,000: $206,583.5 + 37% | Over $656,150: $191,171 + 37% |
Source: IRS Publication 15-T (2026), Percentage Method Tables for Automated Payroll Systems. Employees with a W-4 from before 2020 use the separate tables in the same publication.
State taxes
Pick a state above for its income tax status, the 2026 unemployment (SUTA) wage base and new employer rate, any 2027 wage base already published, and its disability or paid family leave program. States with no income tax on wages: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming. Your actual SUTA rate is on the rate notice your state sends you each year; the new employer rate applies until you have enough history for an experience rate.
Canada: the federal figures
| Item | 2026 | 2027 |
|---|---|---|
| CPP contribution rate (employee and employer each) | 5.95% (4.95% base + 1% first additional) | 5.75% (4.75% base + 1% first additional) |
| Year's maximum pensionable earnings (YMPE) | $74,600 | Not announced yet |
| Basic exemption | $3,500 | $3,500 (fixed by law) |
| Maximum CPP contribution (employee, and the same for the employer) | $4,230.45 | Not announced yet |
| CPP2: second additional contribution | 4% each on earnings between the YMPE and the YAMPE ($85,000); maximum $416 | 4% each (set by law); YAMPE not announced yet |
| EI premium rate (employee) | 1.63% of insurable earnings | 1.64% (set by the Canada Employment Insurance Commission) |
| EI maximum insurable earnings | $68,900 | $70,800 |
| Maximum EI premium | $1,123.07 employee; $1,572.30 employer (1.4 times) | $1,161.12 employee; $1,625.57 employer |
| Quebec: EI rate (reduced, because of QPIP) | 1.3%; maximum $895.70 employee | 1.29%; maximum $913.32 employee, $1,278.65 employer |
| Quebec: QPP contribution rate (employee and employer each) | 6.3% (5.3% base + 1% first additional) to the same $74,600 ceiling; maximum $4,479.30; QPP2 4% up to $85,000 | Not announced yet |
| Quebec: QPIP premium | 0.43% employee, 0.602% employer, on insurable earnings up to $103,000 | Not announced yet |
| Federal income tax brackets | 14% up to $58,523; 20.5% to $117,045; 26% to $181,440; 29% to $258,482; 33% above | Not announced yet |
| Federal basic personal amount | $16,452, reduced to $14,829 for net income over $258,482 | Not announced yet |
| Canada employment amount | $1,501 | Not announced yet |
Pick a province above for its 2026 payroll brackets, basic personal amount and employer health tax. Employer health taxes are paid by the employer only and never come off the employee's pay. Quebec's Health Services Fund is shown for information: AcboBooks does not calculate it, and it does not prepare Revenu Québec remittances or RL-1 slips.
Questions
What is the Social Security wage base for 2027?
$192,300, up from $184,500 in 2026. The Social Security Administration announced it on October 14, 2026. The tax rate stays 6.2% for the employee and 6.2% for the employer, so the most either pays for one employee in 2027 is $11,922.60.
What are the 2027 EI premium rate and maximum insurable earnings?
The employee rate is 1.64% of insurable earnings (1.29% in Quebec) on up to $70,800, for a maximum employee premium of $1,161.12. Employers pay 1.4 times the employee premium, up to $1,625.57 per employee.
Is the CPP rate going down in 2027?
Yes. Bill C-30 lowers the base CPP contribution rate from 4.95% to 4.75% each for employees and employers from January 1, 2027. With the 1% first additional contribution, the total becomes 5.75% each. The 2027 YMPE, and so the maximum contribution, had not been announced as of this page's date.
Which states have no income tax on wages?
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Employers there still pay state unemployment tax, and Washington has its own paid leave and long-term care premiums.
What is the FUTA rate after the state credit?
FUTA is 6.0% of the first $7,000 of each employee's wages. If you pay your state unemployment tax in full and on time, you get a credit of up to 5.4%, leaving 0.6%, or $42 per employee for the year. Employers in a credit reduction state pay more.
When will the 2027 federal income tax withholding tables come out?
The IRS usually publishes Publication 15-T for the new year in December, and the CRA publishes the January edition of T4127 (and the indexed brackets and basic personal amounts) in November and December. This page shows those figures as not announced until they are published.
Does AcboBooks use these rates?
AcboBooks 0.2.1 runs US payroll with the 2026 Publication 15-T tables and the $184,500 Social Security wage base, and Canadian payroll with the CRA's T4127 July 2026 formulas. FUTA is built in; you enter your state's SUTA rate and wage base and state withholding from your state's tables. Each year's tables come in an app update.
Related
- Small business tax calendar 2027
- Payroll guide: running payroll in AcboBooks
- Payroll and tax forms explained
- What changed in US payroll for 2026
- Form 941 vs Form 940
As of October 25, 2026. General information, not tax or legal advice. Rates change, and some state figures depend on your industry and history; confirm with the IRS, the SSA, the CRA, Revenu Québec or your state or province before you rely on them.
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