EI

Glossary / EI · Also called Employment Insurance

How it works

EI premiums are deducted from each pay and remitted with CPP and income tax as source deductions. Once an employee's insurable earnings for the year reach the maximum, premiums stop. The employee maximum for 2026 is $1,123.07 outside Quebec, and the employer pays up to $1,572.30 for that employee.

The Quebec rate is lower because Quebec runs its own parental insurance plan (QPIP), which employers there also deduct. Employers with a qualifying short-term disability plan can apply for a reduced EI rate. When an employee leaves, the employer issues a Record of Employment so Service Canada can assess the claim.

Worked example: Premiums at three earnings levels, 2026

An employee earning $50,000 outside Quebec pays 1.63% × $50,000 = $815.00, and the employer pays 1.4 × $815.00 = $1,141.00. An employee earning $100,000 pays only on the first $68,900, so the employee premium is $1,123.07 and the employer's is $1,572.30.

In the US and in Canada

In the United States

The US has no single equivalent shared by employee and employer. Unemployment benefits there are funded by employer-paid FUTA and state unemployment tax (SUTA).

In AcboBooks

AcboBooks calculates EI on each Canadian pay with the employer multiple of 1.4, stops at the maximum insurable earnings using year-to-date totals, posts both shares to payroll liabilities, and reports EI on the T4. It also builds a Record of Employment worksheet when someone leaves.

Related terms

• CPP
• Record of Employment (ROE)
• T4
• Payroll liabilities
• SUTA

Related on this site

• Canadian payroll calculator
• CRA payroll remittance schedules
• Canadian payroll in AcboBooks

Sources

• CRA: EI premium rates and maximums

Updated October 25, 2026. General information, not tax, legal or accounting advice. Rules and rates change; check with the IRS, the CRA, your state or province, or your accountant.

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