FAQ

Employment Insurance is a federal program administered by Employment and Social Development Canada (ESDC) that provides temporary income support to eligible Canadians. EI covers situations such as job loss through no fault of your own, illness, pregnancy, parental leave, and caring for a critically ill family member. Both employees and employers contribute mandatory premiums to fund the program.

EI premiums are mandatory for all employees with insurable employment under the Employment Insurance Act. The premiums fund a shared pool that provides income replacement benefits when eligible workers face qualifying events. Contributions are required regardless of whether you ever file a claim — EI functions as collective insurance rather than an individual savings account.

Most Canadian employees earning insurable income are required to pay EI premiums. This includes full-time, part-time, temporary, and casual workers. Self-employed individuals are generally exempt unless they have voluntarily opted in. Certain employment situations — such as family members working in a family business — may or may not be insurable depending on the specific relationship and circumstances under the Employment Insurance Act.

The employee EI premium rate for 2026 is 1.63% of insurable earnings, up to the Maximum Insurable Earnings (MIE) of $68,900. The maximum annual employee contribution is $1,123.07. Once you reach this maximum during the year, EI deductions stop for the remainder of that calendar year.

The Maximum Insurable Earnings is the annual income ceiling set by ESDC above which EI premiums do not apply. In 2026, the MIE is $68,900. Your EI premium is calculated on the lesser of your actual insurable earnings and the MIE. Income above $68,900 is not subject to EI deductions. The MIE is adjusted annually based on wage growth in Canada.

The formula is straightforward: EI Premium = min(Annual Insurable Earnings, MIE) × 1.63%. For example, if your annual insurable earnings are $50,000, your EI premium is $50,000 × 1.63% = $815.00. If your earnings are $80,000, the premium is calculated on $68,900 (the MIE cap), giving $68,900 × 1.63% = $1,123.07 — the annual maximum.

Employers contribute 1.4 times the employee EI premium. At the maximum insurable earnings, this means the employer pays $1,123.07 × 1.4 = $1,572.30 per year per employee. This amount does not come from your wages — it is an additional cost the employer bears on top of your salary. The employer's higher contribution reflects the benefit the EI program provides to businesses, allowing them to temporarily lay off workers with confidence they can rehire them later.

EI deductions stop once your cumulative EI premiums for the year reach the annual maximum of $1,123.07. For employees earning significantly above the MIE ($68,900), this cap may be reached mid-year. Once hit, your net pay will increase slightly each period for the remainder of the calendar year — you'll notice the EI line on your paystub shows $0. Deductions reset at the beginning of each new January.

EI is deducted each pay period based on that period's insurable earnings. If your pay varies — due to overtime, bonuses, commission, or variable hours — the EI deduction will vary accordingly. Additionally, once you reach the annual maximum mid-year, your EI deduction will drop to zero for the remaining pay periods of that year.

Each employer independently deducts EI from your paycheque without knowledge of what other employers have deducted. If you work for multiple employers and your combined insurable earnings exceed the MIE, you may over-contribute during the year. Over-contributed EI premiums are refunded through your annual T1 income tax return — the CRA calculates this automatically based on your reported T4 slips.

No. Quebec employees pay a reduced EI premium rate because they separately contribute to the Quebec Parental Insurance Plan (QPIP), which provides maternity, paternity, and parental benefits. Since QPIP covers benefits that federal EI would otherwise provide, the federal EI rate for Quebec employees is lower than the standard rate. This calculator uses the standard non-Quebec rate. Quebec residents should use the Quebec-specific rate available from ESDC or Revenu Québec.

Self-employed individuals are not required to pay EI premiums by default and are not eligible for regular EI benefits. However, self-employed Canadians can voluntarily opt into the EI program to access special benefits: maternity, parental, sickness, and compassionate care benefits. If you opt in, you pay only the employee premium (not the employer portion) and must maintain your participation for at least one full year before making a claim.

Insurable earnings generally include wages, salaries, commissions, tips (in most cases), and most other employment income paid under a contract of service. Income that is typically not insurable includes self-employment income (unless opted in), investment income, pension income, rental income, and certain director's fees. The specific rules around insurable earnings are defined under the Employment Insurance Act and related regulations.

No. EICalc.ca is an independent estimation tool and is not affiliated with the Government of Canada, Employment and Social Development Canada (ESDC), or Service Canada. This tool is provided for informational and planning purposes only. For official EI information and rates, visit canada.ca or contact Service Canada directly.