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Who Has to Pay Employment Insurance (EI) Premiums?
Employers, whether incorporated or not, 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.
As of January 2010, self-employed people can remit EI premiums based on their self-employment income, in order to qualify for certain benefits. See our article on EI for the self-employed.
For maximum insurable amounts, and maximum premiums, see our tables of EI premium rates.
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:
There are some types of employment payments and other payments from which EI premiums do not have to be deducted. CRA information on what type of payments are and are not subject to CPP, EI or tax deductions is available in their Special Payments Chart.
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:
TaxTips.ca ResourcesDon't pay unnecessary employment insurance (EI) premiums
Getting back overpayments of CPP/QPP or EI premiums
August 20, 2020 Update: Three new benefits to replace Canada Emergency Response Benefit (CERB)
Canada Revenue Agency (CRA) ResourcesT4001 Employers' Guide - Payroll Deductions and Remittances - see Amounts and benefits from which you have to deduct EI premiums, and Employment, benefits and payments from which you do not deduct EI premiums.
Taxable benefits and allowances source deductions
Revised: September 20, 2022
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