EI Premium Rates 2026: Employer & Employee Guide
The Canada Employment Insurance Commission set the 2026 EI premium rate at $1.63 per $100 of insurable earnings for employees. Employers pay 1.4 times the employee rate ($2.282 per $100). Maximum insurable earnings: $68,900. This guide covers the 2026 rates, Quebec rates, the 3-year trend, employer costs per employee, remittance deadlines, the Premium Reduction Program and common payroll errors. Written by a licensed Ontario CPA.
2026 EI Premium Rates at a Glance
| Parameter | 2026 (Outside Quebec) | 2026 (Quebec) |
|---|---|---|
| Employee EI premium rate | $1.63 per $100 of insurable earnings (1.63%) | $1.30 per $100 of insurable earnings (1.30%) |
| Employer EI premium rate | $2.282 per $100 of insurable earnings (1.4x employee rate) | $1.82 per $100 of insurable earnings (1.4x employee rate) |
| Maximum insurable earnings (MIE) | $68,900 | $68,900 |
| Maximum annual employee EI premium | $1,123.07 | $895.70 |
| Maximum annual employer EI premium (per employee) | $1,572.30 | $1,253.98 |
| Maximum weekly EI benefit rate | $729 | $729 |
| EI benefit rate | 55% of average insurable weekly earnings, up to the maximum | 55% of average insurable weekly earnings, up to the maximum |
One-Cent Decrease from 2025: The 2026 employee rate of $1.63 is a one-cent decrease from the 2025 rate of $1.64 and a three-cent decrease from the 2024 rate of $1.66. Despite the lower rate, the increase in maximum insurable earnings from $65,700 (2025) to $68,900 (2026) means the maximum annual premium has increased by $45.59 for employees and $63.83 for employers.
EI Premium Rates: 3-Year Comparison (2024 to 2026)
| Parameter | 2024 | 2025 | 2026 | Change (2025 to 2026) |
|---|---|---|---|---|
| Employee rate (per $100) | $1.66 | $1.64 | $1.63 | -$0.01 |
| Employer rate (per $100) | $2.324 | $2.296 | $2.282 | -$0.014 |
| Maximum insurable earnings | $63,200 | $65,700 | $68,900 | +$3,200 |
| Max employee premium | $1,049.12 | $1,077.48 | $1,123.07 | +$45.59 |
| Max employer premium (per employee) | $1,468.77 | $1,508.47 | $1,572.30 | +$63.83 |
| Max weekly benefit | $668 | $695 | $729 | +$34 |
The Rate Dropped, But the Cost Went Up: Many employers see the headline rate decrease and assume their payroll costs decreased. They did not. The maximum insurable earnings increased by $3,200 (from $65,700 to $68,900). For every employee earning at or above the maximum, the employer pays $63.83 more per year in EI premiums in 2026 than in 2025. For a business with 10 employees earning above $68,900, the total increase is $638.30 per year. The rate decrease does not offset the MIE increase for employees earning above the threshold.
2026 Employer EI Cost by Employee Salary
Use this table to calculate your 2026 EI premium obligation for each employee based on their annual salary. The employer pays 1.4 times the employee rate (2.282%) on insurable earnings up to $68,900.
| Employee Annual Salary | Employee EI Premium (1.63%) | Employer EI Premium (2.282%) | Total EI Cost (Employee + Employer) |
|---|---|---|---|
| $30,000 | $489.00 | $684.60 | $1,173.60 |
| $40,000 | $652.00 | $912.80 | $1,564.80 |
| $50,000 | $815.00 | $1,141.00 | $1,956.00 |
| $60,000 | $978.00 | $1,369.20 | $2,347.20 |
| $68,900 (MIE) | $1,123.07 | $1,572.30 | $2,695.37 |
| $80,000 | $1,123.07 | $1,572.30 | $2,695.37 |
| $100,000 | $1,123.07 | $1,572.30 | $2,695.37 |
| $150,000 | $1,123.07 | $1,572.30 | $2,695.37 |
Once an employee's earnings exceed $68,900 in a calendar year, no further EI premiums are deducted. The maximum annual employer cost is $1,572.30 per employee regardless of how much the employee earns above the MIE.
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How EI Premiums Are Calculated on Each Paycheque
| Step | What Happens | Example: $5,000 Bi-Weekly Gross Pay |
|---|---|---|
| 1. Determine insurable earnings for the pay period | Insurable earnings include regular wages, commissions, bonuses, overtime, vacation pay and most taxable benefits. Non-insurable amounts (certain director fees, some severance) are excluded. | $5,000 is fully insurable. |
| 2. Apply the employee EI rate | Multiply the insurable earnings by 1.63% (employee rate). | $5,000 x 1.63% = $81.50 employee EI deduction. |
| 3. Calculate the employer EI premium | Multiply the employee premium by 1.4 (or multiply insurable earnings by 2.282%). | $81.50 x 1.4 = $114.10 employer EI premium. (Or: $5,000 x 2.282% = $114.10.) |
| 4. Check the annual maximum | Track cumulative year-to-date EI premiums for the employee. Once the employee's cumulative premiums reach $1,123.07, stop deducting. The employer's cumulative maximum is $1,572.30 per employee. | After 14 bi-weekly pay periods ($81.50 x 14 = $1,141.00), the employee exceeds the max. The final deduction is adjusted to cap at $1,123.07 total. |
| 5. Remit to CRA | The employer remits both the employee's deduction and the employer's premium to CRA by the remittance deadline (typically the 15th of the following month for regular remitters). | Total EI remittance for this pay period: $81.50 (employee) + $114.10 (employer) = $195.60. |
2026 EI Rates for Quebec Employers and Employees
Quebec residents pay a lower EI premium rate because Quebec administers its own parental insurance program: the Quebec Parental Insurance Plan (QPIP). The QPIP replaces the EI maternity and parental benefits portion. Quebec employees and employers pay separate QPIP premiums directly to Revenu Quebec.
| Parameter | Outside Quebec | Quebec | Difference |
|---|---|---|---|
| Employee EI rate | 1.63% | 1.30% | 0.33% lower |
| Employer EI rate | 2.282% | 1.82% | 0.462% lower |
| Max employee EI premium | $1,123.07 | $895.70 | $227.37 lower |
| Max employer EI premium | $1,572.30 | $1,253.98 | $318.32 lower |
| QPIP employee rate (separate) | N/A | 0.494% (2026) | Paid to Revenu Quebec, not CRA |
| QPIP employer rate (separate) | N/A | 0.692% (2026) | Paid to Revenu Quebec, not CRA |
Ontario Employers with Quebec Employees: If your Ontario corporation has employees who reside in Quebec, you must deduct the Quebec EI rate (1.30%) for those employees and remit QPIP premiums to Revenu Quebec. The EI portion is still remitted to CRA but at the lower Quebec rate. Payroll software must be configured to apply the correct rate based on the employee's province of residence, not the employer's province of business. We configure multi-province payroll for every client with employees in more than one province.
EI Remittance Deadlines for Employers
| Remitter Type | When You Qualify | Remittance Deadline |
|---|---|---|
| Regular remitter | Average monthly withholding amount (AMWA) under $25,000. Most small businesses. | By the 15th of the month following the month in which the deductions were made. January payroll deductions due February 15. |
| Threshold 1 accelerated remitter | AMWA of $25,000 to $99,999.99. | Twice per month. Payroll in the first 15 days of the month: due by the 25th of the same month. Payroll in the last days of the month: due by the 10th of the following month. |
| Threshold 2 accelerated remitter | AMWA of $100,000 or more. | Up to 4 times per month. Due within 3 business days after the last day of the following pay periods: 1st to 7th, 8th to 14th, 15th to 21st, 22nd to end of month. |
| Quarterly remitter | AMWA under $1,000 and a history of on-time remittances. CRA must approve quarterly remitting. | By the 15th of the month following the end of each quarter. Q1 (Jan to Mar) due April 15. Q2 due July 15. Q3 due October 15. Q4 due January 15. |
| New employer (first year) | All new employers default to regular remitter until CRA assigns a remitter type based on AMWA. | By the 15th of the following month (regular remitter rules apply). |
Late Remittance Penalty Is Immediate and Escalating: The penalty for late payroll remittances (which include EI, CPP and income tax) is 3% if the remittance is 1 to 3 days late, 5% for 4 to 5 days, 7% for 6 to 7 days, and 10% for more than 7 days or if no remittance is made. If CRA assesses the 10% penalty more than once in a calendar year, the penalty doubles to 20% on the second and subsequent failures. On a $10,000 monthly remittance, a 10-day delay costs $1,000 in penalties (10%) on the first occurrence. A second late remittance in the same year costs $2,000 (20%). We remit on time for every payroll client. No exceptions.
EI Premium Reduction Program (PRP)
Employers who provide employees with a qualifying short-term disability plan can apply for a reduced EI premium rate. The reduction applies because qualified disability plans reduce the demand on the EI program (employees use their employer plan instead of EI sickness benefits).
| PRP Factor | Details |
|---|---|
| Best available reduced rate (2026) | 1.167x the employee rate (instead of the standard 1.4x). The employer rate drops from 2.282% to approximately 1.903%. |
| Maximum savings per employee (2026) | $261.68 per employee per year with the best reduced rate (Category 2 or 3 plan). |
| Total estimated PRP savings (2026, all registered employers) | $1.46 billion in combined employer and employee premium savings. |
| How savings are shared | 7/12 of the savings go to employers. 5/12 go to employees (through reduced employee deductions). |
| Qualifying plan types | Category 1: Cumulative paid sick leave plan. Category 2: Enhanced cumulative paid sick leave plan. Category 3: Weekly indemnity plan. Category 4: Cumulative paid sick leave plan combined with a weekly indemnity plan. |
| How to apply | Submit an application through the EIPR Portal. CRA reviews the plan and assigns the reduced rate if the plan meets the requirements. The reduced rate applies for the calendar year. |
$261.68 Per Employee Per Year in Savings: For a Guelph manufacturer with 25 employees, the PRP savings at the best reduced rate are $6,542 per year. For a Toronto IT company with 50 employees, the savings are $13,084 per year. The application process takes 4 to 6 weeks. If your company already provides a short-term disability plan (as many Ontario employers do), you may already qualify. We review every payroll client's benefits package for PRP eligibility during onboarding.
EI for Self-Employed and Incorporated Business Owners
| Situation | EI Obligation | Key Details |
|---|---|---|
| Sole proprietor (no employees) | No EI premiums required on self-employment income. | Self-employed individuals do not pay EI on their business income. However, they can voluntarily opt in to the EI special benefits program (maternity, parental, sickness, compassionate care, family caregiver) through Service Canada. |
| Incorporated business owner paying themselves a salary | Both employee and employer EI premiums apply. | The corporation is the employer. The owner-employee is an employee. The corporation deducts the employee EI premium from the salary and pays the employer premium (1.4x). Both amounts are remitted to CRA. Total EI cost at max salary: $2,695.37. |
| Incorporated business owner paying only dividends | No EI premiums on dividends. | Dividends are not insurable earnings. No EI is deducted or remitted on dividends. However, the owner has no access to EI benefits (including maternity, parental and sickness). The salary vs. dividend decision affects both EI costs and benefit access. |
| Incorporated owner paying a mix of salary and dividends | EI applies on the salary portion only. | The most common structure for owner-managers. Pay enough salary to maximize CPP/EI contributions (for benefit access) and take the balance as dividends. We optimize the salary/dividend mix for every incorporated client. |
| Owner with more than 40% ownership | EI premiums deducted but owner may not be eligible for regular EI benefits. | A shareholder who controls more than 40% of the voting shares is generally not eligible for regular EI benefits (job loss). They may still be eligible for special benefits (maternity, parental, sickness) if they opt in. The premiums are still deducted from salary and may be refundable on the T1 if the owner is confirmed as ineligible. |
The 40% Ownership Rule: Many incorporated business owners pay EI premiums on their salary but are surprised to discover they cannot collect regular EI benefits if the business closes or they lose their role. CRA considers a shareholder who controls more than 40% of the voting shares to be in a non-arm's length relationship with the employer. Regular EI benefits (job loss) are generally not available. The premiums may be refundable on the T1 return. We advise every incorporated client on the EI implications of their ownership structure and salary/dividend mix.
Total 2026 Employer Payroll Cost Beyond Gross Salary
EI is only one component of the employer's payroll cost. Here is the full employer burden for a single employee earning $68,900 (the MIE) in 2026.
| Employer Payroll Obligation | 2026 Amount (per employee at $68,900) |
|---|---|
| Employer EI premium (1.4x employee rate) | $1,572.30 |
| Employer CPP contribution (matching employee CPP) | $4,034.10 (CPP1, approximate at 2026 rates) |
| Employer CPP2 contribution (second ceiling, matching) | $396.00 (approximate, on earnings between first and second ceiling) |
| WSIB (Ontario, rate varies by industry) | $500 to $2,500 (typical range depending on rate group) |
| Employer Health Tax (Ontario, if payroll exceeds $490,000) | 0.98% to 1.95% of total Ontario payroll (exempt under $490,000) |
| Vacation pay (minimum 4%) | $2,756.00 |
| Total employer cost beyond gross salary (per employee) | $9,258.40 to $11,258.40 (15% to 18% above gross salary) |
The employer's true cost of a $68,900 salary is $78,158 to $80,158, depending on the WSIB rate group and whether the Ontario Employer Health Tax applies. EI is 15% to 17% of the total employer payroll burden.
10 Common EI Payroll Errors
| # | Error | Consequence |
|---|---|---|
| 1 | Using 2025 EI rates for 2026 pay periods | Over-deduction or under-deduction of employee EI. Under-remitted employer premiums result in penalties. Update payroll software rates before the first 2026 pay run. |
| 2 | Not updating the maximum insurable earnings to $68,900 | Employees earning between $65,700 and $68,900 stop having EI deducted too early. The employer under-remits. CRA assesses the shortfall plus penalties. |
| 3 | Applying the outside-Quebec rate to Quebec-resident employees | Over-deduction of 0.33% from the employee's paycheque. The employee overpays EI all year and must wait for their T1 refund to recover the excess. |
| 4 | Not deducting EI on bonuses, commissions and overtime | All insurable earnings are subject to EI. Bonuses, commissions, overtime, vacation pay and most taxable benefits are insurable. Missing EI deductions on these amounts results in under-remittance. |
| 5 | Deducting EI from a shareholder-employee who controls more than 40% of voting shares without advising them of benefit limitations | The owner pays EI premiums all year but cannot collect regular EI benefits. The premiums may be refundable on the T1 but the owner is not informed until tax time. |
| 6 | Late remittance (even by 1 day) | Penalty starts at 3% for 1 to 3 days late. Escalates to 10% for 7+ days. Second failure in the same year: 20%. On a $10,000 monthly remittance, a 10-day delay costs $1,000 (first offense) or $2,000 (second offense). |
| 7 | Not issuing ROEs within 5 calendar days of an interruption of earnings | CRA penalty for late ROE filing. The employee's EI claim is delayed. If the employer fails to issue an ROE, CRA can issue one on the employer's behalf and assess penalties. |
| 8 | Not applying for the Premium Reduction Program when eligible | If you provide a qualifying short-term disability plan and do not apply for the PRP, you overpay EI premiums by up to $261.68 per employee per year. On 25 employees, the annual overpayment is $6,542. |
| 9 | Treating an employee as an independent contractor to avoid EI | CRA can reclassify the worker as an employee and assess the employer for retroactive EI premiums (both the employee and employer portions) plus penalties and interest for every pay period. |
| 10 | Not reconciling T4s to EI remittances at year-end | Discrepancies between the total EI reported on T4 slips and the total EI remitted to CRA result in CRA assessments, trust exam reviews and potential penalties. Reconcile before filing T4s in February. |
Frequently Asked Questions: EI Premium Rates 2026
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