In response to the government proposal to “appropriately and timely reduce the social insurance rate”, this paper studies the space for reduction of the payment rate in basic old-age insurance for employees by means of constructing an entity fixed effect model. Adopting the provincial panel data, from 2007 to 2014, this paper reveals that under the conditions of maintaining the current substitution rate, the system support ratio and the fund income and expenditure ratio, only Guangdong and Zhejiang show the reduction space for a lower payment rate allowing the possibility of “a lower rate with actuarial balance, no less income or remuneration”. In contrast to nominal rate, there is space for reduction in every region. While reducing the rate, it must be ensured to improve wholistic management, to combine rate reduction with payment, to implement both expending the coverage of the old-age insurance and postponing the retirement age, and to coordinate a lower payment rate with higher replacement rate.