Who has to pay Employment Insurance (EI)
premiums?
Employers are responsible for deducting EI premiums from all
employees, regardless of age. The employer pays a premium of 1.4
times the employee premium, unless they qualify for reduced premiums under the
Premium Reduction Program.
At present, self-employed people do not pay EI premiums,
and do not qualify to receive EI benefits. This is proposed to change in
January 2010. See our article on EI for the
self-employed.
EI premiums are not
payable in some employment situations, such as when the employee controls more than
40% of the corporation's voting shares, when the employee and the employer do
not have an arm's length relationship
(depending on other circumstances), or some other cases. Some of the
other situations where income is not subject to employment insurance:
casual employment if it is not for your usual trade
or business;
when a corporation employs a person who controls
more than 40% of the corporation's voting shares;
employment that is an exchange of work or services;
employment in agriculture or horticulture when
the person receives no cash remuneration; or
works less than seven days with the same
employer during the year (Note: If the employee works 7 days
or more, the employment is insurable from the first day of work.)
employment of a person in connection with a circus,
fair, parade, carnival, exposition, exhibition, or other similar
activity, except for entertainers, if that person:
is not your regular employee; and
works for less than seven days in the year
(Note: If the employee works 7 days or more, the employment
is insurable from the first day of work.)
employment of a person in a rescue operation, as
long as you do not regularly employ that person for that purpose;
employment by a government body as an election
worker if the worker:
is not a regular employee of the government
body; and
works for less than 35 hours in a calendar year
(Note: If the employee works 35 hours or more, the
employment is insurable from the first hour of work.)
CRA also has a section titled CPP/EI
Explained, which talks about different types of earnings and how
they are treated for CPP and EI purposes. It includes
information on
tips and gratuities
status of workers placed by employment agencies
real estate agents
Heavy machinery operators
workers engaged in construction
workers engaged in fishing
For a complete list of non-insurable earnings, see:
The information on this site is not intended to be a
substitute for professional advice. Each person's situation differs, and
a professional advisor can assist you in using the information on this web
site to your best advantage.
See our Business
Directory for tax, accounting and finance-related firms in your
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Please see our legal
disclaimer.
