Personal Tax -> Business -> Canada Pension Plan (CPP), Quebec Pension Plan (QPP) and Employment Insurance (EI) -> EI rates
Employment Insurance (EI) Premium Rates
The 2018 EI premium rate is $1.66 per $100 of insurable earnings, up 1.84% from the 2017 rate of $1.63.
The new Liberal government's platform included lowering the EI rate to 1.65% for 2017. The previous estimate for the 2017 rate, as announced in the Federal 2015 budget, was 1.49%. The actual rate for 2017, announced September 14, 2016, is 1.63%.
(1) This is the
minimum self-employment earnings that must have been earned in the
previous year in order to claim benefits.
See our article on EI for the Self-Employed.
The 2018 rates are outlined on the 2018 Employment Insurance Premium Rate page.
EI Basic Exemption
Although there is no basic exemption for employment insurance, if an employee's insurable earnings are $2,000 or less during any year, their EI premiums are refunded in whole.
A September 2014 Department of Finance announcement announced the introduction of a Small Business Job Credit. This credit will apply to small businesses with total EI premiums of less than $15,000 in 2015 or 2016. The employer premium for these firms will be $1.60 (x 1.4) per $100 of insurable earnings, reduced from $1.88 (x 1.4). This works out to 2.24%, reduced from 2.632%, or a difference of $0.39 per $100 of insurable earnings. The premium reduction will be in addition to the premium reduction related to Quebec's Parental Insurance Plan (QPIP). Employee premiums remain unchanged.
A September 2013 Department of Finance announcement indicated that the EI premium rate would be frozen at the 2013 level of 1.88% for 2014, and would not increase for 2015 or 2016. The rates were previously set by the Canada Employment Insurance Financing Board (CEIFB), which has been dissolved. A new rate-setting mechanism, which will set the EI premium rate annually at a seven-year break-even rate, takes effect in 2017. The Federal 2015 Budget indicated that this would reduce the rate from 1.88% ($1.88) in 2016 to approximately 1.49% ($1.49) in 2017. See Lowering the EI Premium Rate in 2017 on the 2015 Budget website. As noted above, the new Liberal government indicated that the 2017 rate would be 1.65% ($1.65) for 2017. However, the 2017 rate is 1.63%, announced in September 2016.
Self-employed persons who opt into the Employment Insurance program will pay the employee rate, and are eligible only for special benefits. The annual self-employment income required to qualify for special benefits will increase to $6,888 on January 1, 2017, up from $6,000. See our article on employment insurance for the self-employed.
Not Everyone Pays EI
EI premiums are not payable in some employment situations. See our article Who has to pay EI premiums?
Employers who provide their employees with a short-term disability plan may be able to pay less than the 1.4 x employee rate that most employers pay. See EI Premium Reduction Program - For Employers.
Premium rates for current and earlier years can be found on the Canada Revenue Agency (CRA) web page EI premium rates and maximums.
For more information on the EI clawback, see our article EI benefit repayment (EI clawback).
EI Premium Tables for Payroll Deductions
For EI premium tables for calculating payroll deductions, see the CRA publication T4032 Payroll Deduction Tables. See the Government of Canada web page Annual Reports on the EI Premium Rate and Maximum Insurable Earnings for more information on how the rates and insurable earnings levels are calculated.
See also our article on Take Home Pay Calculators.
See above re 2015/2016 reduction to EI rates for small businesses.
Note: Quebec started providing their own parental benefits beginning January 1, 2006, so their EI rates are lower. See the article on the Quebec Parental Insurance Plan.
Revised: September 20, 2017
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