Hiring a family member or a related person

Under the Employment Insurance Act, employees who are related to their employer (individual or corporation) might not be in an insurable employment. This means that they would not have EI premiums deducted from their pay and would not be able to get EI benefits.

There are several ways employees are considered to be related to the employer. They can be related:


This does not mean the employment of a family member is automatically not insurable. For more information, see Not dealing at arm's length for purposes of the Employment Insurance Act (EIA).

However, these individuals can be in insurable employment if you would have negotiated a similar contract with a person with whom you deal at arm's length.

You have to look at all the circumstances of the employment to see if someone else would have been hired under a similar contract of employment. The circumstances that we look at include:

If you are still not sure if you should deduct EI premiums, you can request a ruling from CRA before June 30 of the year following the year to which the question relates. For example, if the employment took place in 2021, the ruling request has to be made before June 30, 2022.

If you have already deducted EI premiums and you think you shouldn't have, you can request a refund of the EI premiums. Normally this requires that we make a ruling decision. You must make your request for a refund no later than three years from the end of the year in which the overpayment occurred.


You deducted EI premiums in 2018 and the employment was not insurable, you could get the premiums refunded up until the end of 2021.

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