Employment Insurance premium rate
Measures for Employers
New in Canada’s Economic Action Plan
Through Canada’s Economic Action Plan, the Government of Canada will freeze the Employment Insurance (EI) premium rate for 2010 at $1.73 per $100 of insurable earnings—the same level as in 2009 and its lowest level since 1982. Keeping the EI premium at the same level in 2009 and 2010, rather than raising it to the break-even level, will achieve a projected combined economic stimulus of $10.5 billion. Canada enjoys some of the lowest payroll taxes among countries in the Organization for Economic Co-operation and Development, providing a competitive advantage to employees and their employers. The new measure ensures that premium rates for workers and employers will not increase during the economic downturn.
About the program
The EI Program is funded through employer and employee premiums paid on insurable earnings. As of January 1, 2009, the employee rate per $100 of insurable earnings is $1.73. Employers contribute 1.4 times the employee’s premiums. The rate is different in Quebec than in the rest of Canada because Quebec has assumed responsibility for maternity and parental benefits.
How it works
The Canada Employment Insurance Commission (CEIC) set the EI premium rate for 2009. In Budget 2009, the Government froze the EI premium rate for 2010 at $1.73 per $100—the same rate as 2008 and 2009. For 2011 and beyond, the Canada Employment Insurance Financing Board (CEIFB)—announced in Budget 2008—will begin setting premium rates on a break-even basis. To ensure that premium rate increases are gradual enough to support a strong economic turnaround, the CEIFB will be mandated not to recover any EI costs associated with the enhanced EI measures and training announced in Canada’s Economic Action Plan, estimated at $2.9 billion.
Who will benefit
All workers and employers who pay EI premiums will benefit from the decision to freeze EI premium rates.
How to find out more
For information on how EI premiums are collected, including what constitutes insurable employment, visit the Canada Revenue Agency website.
For information on the CEIC and the CEIFB, and to read annual reports on the EI premium rate and maximum insurable earnings, visit Employment and Social Development Canada (ESDC), Reports: Employment Insurance (EI).
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