CPP 2027 for the Self-Employed: The Base Rate Falls to 9.5%
Bill C-30 cuts the base CPP rate from 9.9% to 9.5% for self-employed Canadians, effective January 1, 2027. The enhancement and CPP2 stay the same, so base plus enhancement should be 11.5% instead of 11.9%. What changes, what the CRA hasn't published yet, and what it means for your set-aside.
Parth Raval, Founder
Writes and fact-checks VRITTI’s guides — sources cited inline
Published
From January 1, 2027, self-employed Canadians are scheduled to pay a 9.5% base CPP rate instead of 9.9%. Bill C-30 makes the change by lowering each side from 4.95% to 4.75%. The 2% CPP enhancement and CPP2 are not part of the change, so the all-in rate on earnings up to the first ceiling should be 11.5% rather than 11.9%. As of October 2026, the CRA has not yet published the 2027 earnings ceilings that set the maximum. Your 2026 income still uses this year's rate. The new rate starts with the first payment you earn in 2027.
Quick answer
- Base CPP, self-employed: 9.9% in 2026, 9.5% for 2027 and later (Bill C-30, Royal Assent June 18, 2026).
- Base plus enhancement: 11.9% in 2026, about 11.5% in 2027 (our arithmetic; the CRA's 2027 table will confirm).
- CPP2: not part of the change. 8% for self-employed people in 2026.
- 2027 ceilings and maximum: not published by the CRA as of October 7, 2026.
- What it means for a set-aside: no change for 2026 income. For income earned from January 1, 2027, the CPP slice is about 0.4 points lower.
What changed: Bill C-30 and the base CPP rate
The CPP has two layers that self-employed people pay on the same band of earnings. The base (original) CPP and the CPP enhancement together make up 2026's 11.9%. The federal government breaks that 11.9% into 9.9% for the base and 2% for the enhancement, with self-employed people paying the full 11.9% (Government of Canada). A third layer, CPP2, applies on a higher band of earnings above the first ceiling.
Bill C-30, the Spring Economic Update 2026 Implementation Act, changes only the first layer. It amends Schedule 1 of the Canada Pension Plan so that, for "2027 and each subsequent year", the base rate is 4.75% for employees, 4.75% for employers and 9.5% for self-employed persons (Parliament of Canada). Until now the schedule has had 4.95% / 4.95% / 9.9% for "2003 and each subsequent year" (Justice Laws). The bill received Royal Assent on June 18, 2026.
The cut came out of the CPP's regular review. The Spring Economic Update says Canada's finance ministers unanimously agreed to reduce the rate as part of the 2025–2027 Triennial Review. The 32nd Actuarial Report, tabled December 8, 2025, found the minimum base rate needed to sustain the plan over 75 years to be at least 69 basis points below the legislated rate (Department of Finance). The government's stated effective date is January 1, 2027.
One detail to know: under the Canada Pension Plan, a rate change takes effect on a day fixed by federal order. That order needs consent from at least two thirds of the provinces, which must also hold at least two thirds of the population. Bill C-30 follows that route. As of October 7, 2026 we have not seen the order published, so the CRA's 2027 rate table, when it appears, is the final confirmation.
2026 vs 2027, side by side
| Self-employed CPP | 2026 (confirmed) | 2027 |
|---|---|---|
| Base CPP rate | 9.9% | 9.5% (Bill C-30) |
| Enhancement (first additional) | 2% | 2% (not changed by Bill C-30) |
| Base + enhancement | 11.9% | 11.5% (our arithmetic) |
| Basic exemption | $3,500 | $3,500 (canada.ca: "frozen at $3,500") |
| First earnings ceiling (YMPE) | $74,600 | Not yet published by the CRA |
| Maximum base + enhancement | $8,460.90 | Depends on the 2027 ceiling |
| CPP2 rate (self-employed) | 8% | 8% (not changed by Bill C-30) |
| Second ceiling (YAMPE) | $85,000 | Not yet published by the CRA |
| Maximum CPP2 | $832 | Depends on the 2027 ceilings |
All 2026 figures are from the CRA and the federal government's CPP pages listed in the Sources below. For the full 2026 picture, including why a first self-employed tax bill can feel twice as large as expected, see our guide to CPP for the self-employed in 2026.
What it saves you: worked numbers
The cut is 0.4 percentage points on net self-employment earnings between the $3,500 basic exemption and the first ceiling. To keep things comparable, the table below applies both rates to the 2026 ceiling. The 2027 column is an illustration until the CRA publishes 2027 figures.
| Net self-employment earnings | CPP at 11.9% (2026) | CPP at 11.5% (2027 rate, 2026 ceiling) | Difference |
|---|---|---|---|
| $40,000 | $4,343.50 | $4,197.50 | $146.00 |
| $60,000 | $6,723.50 | $6,497.50 | $226.00 |
| $70,000 | $7,913.50 | $7,647.50 | $266.00 |
| $74,600 or more | $8,460.90 | $8,176.50 | $284.40 |
For comparison, the federal government puts the saving at about $133 a year for an employee earning $70,000, with an equal saving for their employer (Department of Finance). A self-employed person pays both halves, so at $70,000 the saving doubles to $266. Part of self-employed CPP is deducted at line 22200 and the base portion is claimed as a non-refundable tax credit at line 31000 (CRA), so the after-tax difference is somewhat smaller than these gross figures.
Why your 2027 CPP bill can still go up
A lower rate doesn't guarantee a lower maximum. The CPP earnings ceiling is set each January, based on increases in the average wage in Canada (Government of Canada). Between 2025 and 2026 it rose from $71,300 to $74,600. As a purely hypothetical example, not a forecast: if the 2027 ceiling rose by the same $3,300 to $77,900, the maximum base + enhancement contribution at 11.5% would be ($77,900 − $3,500) × 11.5% = $8,556.00. That is higher than 2026's $8,460.90, because more of your income would be in the contributory band.
So for 2027 the rate goes down, while the ceiling follows average-wage growth. If your earnings sit well below the ceiling, you simply pay less. If you're at or near the maximum, the two changes partly cancel out, and the exact result depends on the 2027 ceilings. We'll update this post when the CRA publishes them. Our self-employed CPP calculator uses 2026 figures today.
What it does to your set-aside percentage
If you set aside a percentage of every payment for the CRA, the change is small and easy to apply:
- Through December 31, 2026: no change. Income earned in 2026 is charged CPP at 2026 rates, 11.9% up to the ceiling plus CPP2 above it.
- From January 1, 2027: the CPP part of a set-aside is 0.4 points lower, from 11.9% to about 11.5% of net earnings above $3,500. On a $1,000 payment, that is about $4 less going into the jar.
- CPP2 earners: the 8% slice on the band above the first ceiling is not changed by Bill C-30.
The total percentage you set aside, covering income tax and CPP together, barely changes. Our guide to how much tax to set aside when self-employed shows how the pieces add up, and the employee vs self-employed CPP comparison explains why you pay both halves. For the broader picture of the self-employed tax system, start with our self-employed taxes in Canada page.
VRITTI is a calm iOS app for self-employed Canadians. It sets aside income tax and CPP for your province as income lands, so the new rate is applied without you redoing the maths. It's coming soon to the App Store. Join the waitlist.
Benefits aren't cut
Bill C-30's CPP division amends the contribution rate schedule and the related rate-review formulas. It does not amend how retirement, disability or survivor benefits are calculated (Parliament of Canada). The government presents the cut as possible because the base plan's minimum sustainable rate is below the current rate, not as a cut to benefits. The CPP enhancement, phased in from January 1, 2019, is not changed by the bill (Government of Canada).
Quebec: a separate plan
The CPP operates throughout Canada except in Quebec, where the Quebec Pension Plan provides similar pensions and benefits (Government of Canada). Bill C-30 amends the Canada Pension Plan only. If you are self-employed in Quebec, check Retraite Québec for your 2027 QPP rate. We have not verified whether the QPP rate changes for 2027.
Sources
- Parliament of Canada: Bill C-30 (45-1), Spring Economic Update 2026 Implementation Act, Royal Assent text (Part 3, Division 5: Schedule 1 rates of 4.75% / 4.75% / 9.5% for 2027 and later; coming into force by order under CPP s.114(4); Royal Assent June 18, 2026)
- Department of Finance: Spring Economic Update 2026, Chapter 2 (finance ministers' unanimous agreement, 2025–2027 Triennial Review, 32nd Actuarial Report, 9.9% to 9.5% effective January 1, 2027, about $133 saving at $70,000)
- Department of Finance: Spring Economic Update 2026, key measures (April 28, 2026)
- Department of Finance: Legislation passes to implement measures from the Spring Economic Update 2026 (June 19, 2026)
- Justice Laws: Canada Pension Plan, Schedule 1 (current consolidated rates: 4.95% / 4.95% / 9.9% for "2003 and each subsequent year")
- Justice Laws: Canada Pension Plan, section 114 (rate changes take effect by order in council with the consent of two thirds of the provinces holding two thirds of the population)
- Government of Canada: Contributions to the Canada Pension Plan (2026: 11.9% = 9.9% base + 2% enhancement phased in from January 1, 2019; $74,600 ceiling; $3,500 exemption frozen; CPP2 8% self-employed up to $85,000; ceiling set each January from average wages; QPP in Quebec)
- CRA: CPP contribution rates, maximums and exemptions (YMPE $71,300 in 2025, $74,600 in 2026; 2026 self-employed maximum $8,460.90)
- CRA: Second additional CPP (CPP2) contribution rates and maximums (2026: $85,000 second ceiling, $832 self-employed maximum)
- CRA: Line 22200, deduction for CPP or QPP contributions on self-employment and other earnings
- CRA: Line 31000, base CPP or QPP contributions on self-employment and other earnings (non-refundable credit)
- CRA: MP, DB, RRSP, DPSP, ALDA, TFSA limits, YMPE and the YAMPE (2027 YMPE and YAMPE not yet published as of October 7, 2026)
Last verified: October 7, 2026, against the pages above. The 2027 figures marked as our arithmetic or as an illustration will be replaced with the CRA's official 2027 table when it is published.
This article explains CPP rules in plain language. It is an estimate for general information, not tax or financial advice for your situation. Rates, ceilings and coming-into-force dates can change, so check the current CRA page before relying on a number.
Frequently asked questions
What is the self-employed CPP rate for 2027?
Bill C-30 sets the base CPP rate for self-employed people at 9.5% for 2027 and each later year, down from 9.9%. Employees and employers each go from 4.95% to 4.75%. The 2% CPP enhancement is not part of the change, so base plus enhancement should total 11.5% in 2027 instead of 11.9%. As of October 7, 2026 the CRA has not yet published its 2027 rate table, so treat 11.5% as arithmetic until the CRA confirms it.
Does CPP2 change in 2027?
Not under Bill C-30. The bill's CPP division amends only the base contribution rates and the related rate-review formulas. It does not touch the second additional (CPP2) rate, which for 2026 is 8% for self-employed people on earnings between $74,600 and $85,000, up to $832. The 2027 CPP2 earnings band will be set when the CRA publishes the 2027 ceilings.
When will the 2027 CPP maximum be known?
When the CRA publishes the 2027 year's maximum pensionable earnings (YMPE) and second ceiling (YAMPE). As of October 7, 2026 the CRA's limits table shows both as blank for 2027. The ceiling is set each January based on increases in the average wage in Canada; it rose from $71,300 in 2025 to $74,600 in 2026. That is why the 2027 maximum can't be stated yet, and why it could still be higher than 2026's $8,460.90 despite the lower rate.
Is the 2027 CPP cut certain?
Parliament has passed it: Bill C-30 received Royal Assent on June 18, 2026, and Canada's finance ministers unanimously agreed to the cut during the 2025–2027 Triennial Review. Under the Canada Pension Plan, a rate change takes effect on a day set by federal order, which requires consent from at least two thirds of the provinces, representing at least two thirds of the population. The government gives January 1, 2027 as the effective date. As of October 7, 2026 we have not seen that order published, so check the CRA's 2027 rate table when it appears.
Will a lower contribution rate shrink my CPP pension?
Bill C-30 doesn't change the benefit formulas. Its CPP division amends contribution rates only and leaves retirement, disability and survivor benefits as they are. The government's stated reason for the cut is that the 32nd Actuarial Report found the base plan can stay sustainable at a lower rate. The minimum rate the plan needs is at least 69 basis points below the current legislated rate.
I live in Quebec. Does this change apply to me?
Probably not directly. The CPP covers all of Canada except Quebec, where self-employed people contribute to the Quebec Pension Plan (QPP) instead. Bill C-30 amends the Canada Pension Plan only. For your 2027 QPP rate, check Retraite Québec. We haven't verified whether the QPP rate changes for 2027.
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