United States · IRS · Plan years beginning in 2027
ACA affordability percentage 2027.
The Required Contribution Percentage the IRS set for plan years beginning in calendar year 2027, the three employer safe harbors it plugs into, and a calculator for the most an employee can be charged for self-only coverage.
Short answer: For plan years beginning in calendar year 2027 the Required Contribution Percentage is 10.22%, published in IRS Revenue Procedure 2026-26 (section 3.02). Employer coverage is affordable for the employer mandate when the employee’s share of the lowest-cost self-only plan that provides minimum value does not exceed 10.22% of the measure the employer picks: Form W-2 wages, rate of pay, or the federal poverty line for one person divided by 12. Under the poverty-line safe harbor with the 2026 HHS guideline of $15,960, that is $135.93 a month ($169.91 in Alaska, $156.37 in Hawaii), derived figures. The same revenue procedure gives the 2027 Applicable Percentage Table for the premium tax credit, which runs from 2.15% below 133% of poverty to 10.22% at 300% to 400%.
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The 2027 number and where it comes from
Revenue Procedure 2026-26 does two things. Section 3.01 sets the Applicable Percentage Table used to work out an individual’s premium tax credit under section 36B for taxable years beginning in 2027, and section 3.02 sets the Required Contribution Percentage for plan years beginning in calendar year 2027 at 10.22%. That second figure is the one employers mean by “the affordability percentage”: section 36B(c)(2)(C)(i)(II) treats employer coverage as unaffordable when the employee’s required contribution exceeds 9.5 percent of household income, and the 9.5 percent is indexed each year, which is how it becomes 10.22% for 2027. The revenue procedure says the 2027 adjustments are based on the most recent projections of premium growth and income growth, that the additional adjustment in section 36B(b)(3)(A)(ii)(II) is not required for 2027 because the failsafe exception applies, and that it supplements Rev. Proc. 2014-37. Our 2026 page covers the 9.96% figure for plan years beginning in 2026.
The three safe harbors, and the 2027 caps they produce
Employers do not know household income, so the regulations at 26 CFR 54.4980H-5(e)(2) let an applicable large employer test the employee’s share of the lowest-cost self-only plan that provides minimum value against one of three stand-ins. The IRS Q&A adds that the safe harbors are available only if the employer offers minimum value coverage to at least 95 percent of its full-time employees and their dependents.
| Safe harbor | What the regulation measures | 2027 monthly cap (10.22%, derived) |
|---|---|---|
| Form W-2 wages | The employee’s Form W-2 wages from the employer for the year (the IRS Q&A says Box 1), tested against the annual contribution | $340.67 a month on $40,000 of wages |
| Rate of pay, hourly | 130 hours multiplied by the lower of the employee’s hourly rate at the start of the coverage period or the lowest rate during the month | $199.29 a month at $15.00 an hour |
| Rate of pay, salaried | The employee’s monthly salary; the safe harbor is not available if the monthly salary is reduced, including through a cut in hours | $357.70 a month on $3,500 a month |
| Federal poverty line | The poverty line for a single individual for the applicable calendar year, for the state where the employee works, divided by 12 | $135.93 (48 states and DC); $169.91 (Alaska); $156.37 (Hawaii) |
The poverty-line figures use the 2026 HHS guidelines of $15,960, $19,950 and $18,360 for one person, published in the Federal Register on January 15, 2026. The regulation refers to the poverty line for the applicable calendar year, and plans starting on January 1, 2027 will usually rely on the guideline available when the year is set up, so confirm which guideline your plan year uses before you price the plan.
The 2027 Applicable Percentage Table (premium tax credit)
Section 3.01 of the revenue procedure gives the table below for taxable years beginning in 2027. The statute says the applicable percentage increases on a sliding scale in a linear manner from the initial to the final percentage within each tier, so a household at 275% of poverty, halfway through the 250% to 300% tier, is at 9.44% (derived). The percentages are the share of household income a household is expected to pay for the benchmark plan; they are not the employer test.
| Household income as % of the federal poverty line | Initial percentage | Final percentage |
|---|---|---|
| Less than 133% | 2.15% | 2.15% |
| At least 133% but less than 150% | 3.23% | 4.30% |
| At least 150% but less than 200% | 4.30% | 6.78% |
| At least 200% but less than 250% | 6.78% | 8.66% |
| At least 250% but less than 300% | 8.66% | 10.22% |
| At least 300% but not more than 400% | 10.22% | 10.22% |
Worked examples
W-2 method. An employee with $40,000 of Box 1 wages is charged $150 a month for the lowest-cost self-only plan. The annual cap is 10.22% of $40,000, or $4,088.04, which is $340.67 a month, so a $150 charge is affordable with $190.67 to spare. Hourly rate of pay. At $15.00 an hour the monthly base is 130 hours times $15.00, or $1,950, and 10.22% of that is $199.29; a $200 charge is over the cap by $0.71. Poverty line. Any employee in the 48 states can be charged up to $135.93 a month under this method whatever they earn, so the same $150 charge is over the cap by $14.07; an employer that wants to charge $150 must rely on the W-2 or rate-of-pay method for that employee instead. The calculator reports the base, the cap, the margin and the annual cap for whichever method you pick.
What this page does not cover
- Family coverage. The affordability test and the safe harbors look at the employee’s cost for self-only coverage only.
- The employer shared responsibility payment amounts for 2027, which are set separately; see the 4980H penalty calculator.
- Wellness incentives, opt-out payments, HRAs and flex credits, which can change the required contribution under other IRS guidance.
- Plan years beginning in 2026 or earlier; the 2026 percentage lives on its own page.
Method
The 10.22% figure and the Applicable Percentage Table were read from the text of Rev. Proc. 2026-26 on November 11, 2026. The safe-harbor descriptions follow 26 CFR 54.4980H-5(e)(2) and the IRS employer shared responsibility Q&A (questions 39 and 40). Each cap is 10.22% of the safe-harbor base: annual wages divided by 12, 130 times the hourly rate, the monthly salary, or the one-person poverty guideline divided by 12, rounded to the cent and labelled derived. The sliding-scale percentage interpolates linearly within the tier as section 36B(b)(3)(A)(i) describes. Nothing is stored or sent.
Figures read from the sources below on November 11, 2026. Last updated November 11, 2026.
Sources
- IRS Revenue Procedure 2026-26 (Applicable Percentage Table for 2027; Required Contribution Percentage 10.22%) (retrieved November 11, 2026)
- 26 CFR 54.4980H-5(e)(2): affordability safe harbors (Form W-2 wages, rate of pay, federal poverty line), Cornell LII (retrieved November 11, 2026)
- IRS: Questions and answers on employer shared responsibility provisions (questions 39 and 40, affordability and safe harbors) (retrieved November 11, 2026)
- 26 U.S.C. 36B(b)(3)(A)(i) and (c)(2)(C)(i)(II): sliding scale and the 9.5 percent required contribution, Cornell LII (retrieved November 11, 2026)
- HHS ASPE: 2026 poverty guidelines ($15,960, $19,950 and $18,360 for one person) (retrieved November 11, 2026)
Common mix-ups
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Often assumedThe 2027 affordability test still uses 9.5 percent of pay.
What the source saysThe statute’s 9.5 percent is indexed each year; Rev. Proc. 2026-26 sets the Required Contribution Percentage at 10.22% for plan years beginning in 2027. [1]
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Often assumedThe premium tax credit table and the employer affordability percentage are the same number for every household.
What the source saysThe 2027 Applicable Percentage Table runs from 2.15% below 133% of poverty up to 10.22% at 300% to 400%; only its top tier matches the single 10.22% employer figure. [1]
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Often assumedThe employer test measures the cost of family coverage.
What the source saysThe IRS Q&A ties affordability to the employee’s required contribution for self-only coverage under the lowest-cost minimum value plan, and the safe harbors are self-only measures. [2]
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Often assumedAn employer can rely on a safe harbor however few employees it offers coverage to.
What the source saysThe IRS Q&A says the safe harbors apply only if the employer offers minimum value coverage to at least 95 percent of its full-time employees and their dependents. [2]
Checked against these sources on .
Frequently asked questions
What is the ACA affordability percentage for 2027?
10.22% for plan years beginning in calendar year 2027, set by IRS Revenue Procedure 2026-26, section 3.02.
Which revenue procedure sets the 2027 percentage?
Rev. Proc. 2026-26, which supplements Rev. Proc. 2014-37 and is effective for taxable years and plan years beginning in 2027.
What is the 2027 federal poverty line safe harbor amount?
$135.93 a month in the 48 states and DC, derived as 10.22% of the 2026 HHS guideline of $15,960 for one person divided by 12; $169.91 in Alaska and $156.37 in Hawaii.
How does the rate of pay safe harbor work?
For an hourly employee the regulation multiplies 130 hours by the lower of the hourly rate at the start of the coverage period or the lowest rate in the month; for a salaried employee it uses the monthly salary, and the safe harbor is not available if the salary is reduced.
Does the test apply to family coverage?
No. Affordability is measured on the employee’s required contribution for the lowest-cost self-only plan that provides minimum value.
What was the percentage for 2026?
Our 2026 page records 9.96% for plan years beginning in 2026; the 2027 figure of 10.22% is higher.
Is the Applicable Percentage Table the same as the employer test?
No. The table sets the share of household income a household pays for the benchmark plan when claiming the premium tax credit; the Required Contribution Percentage is the single figure used to test employer coverage.
Can an employer use the safe harbors for only some employees?
The IRS Q&A says the safe harbors are available only if the employer offers minimum value coverage to at least 95 percent of its full-time employees and their dependents; the regulation lets the choice of safe harbor vary by reasonable category of employee.
Is this an official determination?
No. It applies the published percentage to the numbers you type; the IRS, the regulation and your plan documents govern.
Not legal or tax advice
This page is general information from an unofficial guide, not legal, tax or benefits advice. The 10.22% figure is the published Required Contribution Percentage for plan years beginning in 2027; the caps are derived from the numbers you type and the 2026 poverty guidelines. Confirm plan-year rules with the IRS guidance and a benefits professional before you set contributions. Nothing you type is sent anywhere.