Employment Insurance (EI) is one of Canada's most important social safety nets, providing temporary income replacement to Canadians who lose their jobs through no fault of their own or who need time away from work for major life events. Whether you are an employee trying to understand your paystub deductions or an employer managing payroll obligations, knowing how EI works in 2025 is essential. This guide breaks down everything you need to know about EI premiums, eligibility, benefit amounts, and employer responsibilities under the current rules.
Employment Insurance is a federal social insurance program administered by Service Canada under the Employment Insurance Act. It provides temporary income replacement in several key situations:
EI is funded through premiums paid by both employees and employers throughout the year, based on insurable earnings. It is not a welfare or means-tested program — it is a contributory insurance program, and your entitlement depends on your contribution history and employment circumstances.
Each year, the Canada Employment Insurance Commission sets the premium rates and the maximum insurable earnings (MIE). For 2025, the figures are as follows:
Once an employee's insurable earnings reach $65,700 for the year, both the employee and employer stop making EI contributions for the remainder of that calendar year. Earnings above the MIE are not subject to EI premiums.
Quebec residents: Quebec operates its own parental insurance program (QPIP — Quebec Parental Insurance Plan), which covers maternity, paternity, parental, and adoption benefits. As a result, Quebec employees and employers pay slightly lower federal EI rates, since QPIP handles those specific benefit types separately.
Employers who provide enhanced short-term disability or paid leave benefits to their employees may qualify for a reduced EI premium rate through the EI Premium Reduction Program. Under this program, if your workplace plan provides benefits equivalent to or better than EI sickness, maternity, or parental benefits, the standard employer multiplier of 1.4× can be reduced to 1.2× or 1.3×, depending on the plan. The employer must share a portion of the savings with employees, typically through improved benefits or higher wages. This can represent meaningful annual savings for businesses with larger payrolls, and is worth exploring as part of a broader HR and compensation strategy.
To qualify for EI, you must first be in "insurable employment." This generally means you are an employee working under a contract of service — self-employed individuals are not automatically covered. You must also have accumulated sufficient insurable hours during the qualifying period.
The number of hours you need depends on the regional unemployment rate where you live:
The qualifying period is the shorter of the 52 weeks immediately before your claim or the period since your last EI claim. All insurable hours worked with any employer during that window count toward your total.
Once you qualify, your weekly benefit amount is based on 55% of your average weekly insurable earnings, calculated over the best 14 to 22 weeks in your qualifying period. The number of "best weeks" used in the calculation also varies by region — areas with higher unemployment rates use fewer best weeks, which generally results in a higher average and therefore a higher benefit.
Maximum weekly EI benefit for 2025: $668
This is derived from the MIE: $65,700 ÷ 52 weeks = $1,263.46 × 55% = $694.90, but the legislated maximum weekly rate for 2025 is set at $668. If your average insurable earnings are lower than the MIE cap, your actual benefit will be less than the maximum.
How long you can receive regular EI benefits depends on both your insurable hours and your regional unemployment rate. The benefit period ranges from a minimum of 14 weeks to a maximum of 45 weeks. Regions with higher unemployment rates and claimants with more insurable hours qualify for longer benefit periods.
Beyond regular job-loss benefits, EI provides several special benefit categories:
Parents can combine maternity and parental benefits, and both parents can claim parental benefits — though the total weeks between them cannot exceed the maximums noted above.
Self-employed individuals are not covered by EI by default. However, they can voluntarily opt in to the EI program to access special benefits — specifically sickness, maternity, parental, and compassionate care benefits. Regular job-loss benefits are not available to self-employed claimants even after opting in.
Key rules for self-employed EI opt-in:
For incorporated business owners who pay themselves a salary through their corporation, the standard employee rules apply — EI premiums are deducted from the salary, and the corporation pays the employer portion.
For Canadian employers, EI is a mandatory payroll deduction. Here is how it works in practice:
Failing to deduct or remit EI accurately can result in penalties and interest from the CRA. If you over-deduct, employees are entitled to a refund when they file their personal tax return. At Swift Accounting Calgary, we help businesses of all sizes stay on top of payroll compliance — from setting up deduction schedules to T4 preparation at year end.
It is also worth noting that not all employment relationships are insurable. Certain family members employed by a related corporation, or workers classified as independent contractors rather than employees, may not be subject to EI. If you are unsure about the insurability of a particular work arrangement, it is worth getting clarity before an issue arises — the CRA can rule on insurability if there is a dispute.
If you have questions about EI obligations, payroll remittances, or how EI interacts with your broader compensation structure, the team at Swift Accounting is here to help Calgary businesses navigate these rules with confidence.
Generally, no. EI regular benefits are available to those who are unemployed through no fault of their own — meaning layoffs, shortage of work, or dismissal without just cause. If you quit voluntarily, you are disqualified unless you can demonstrate "just cause" for leaving, such as workplace harassment, a significant change in your job duties, or being required to relocate. The bar for proving just cause is relatively high, so it is important to document your reasons thoroughly before leaving.
There is a one-week unpaid waiting period at the start of most EI claims. You will not receive benefits for that first week — it functions similarly to a deductible. The waiting period applies to regular, sickness, maternity, and most other EI benefit types. You should apply as soon as you stop working even if you are still within the waiting period, since delays in applying can delay when your benefits start.
Employers must pay EI premiums for all employees in insurable employment. However, there are exceptions — for example, certain arm's-length family members may not be in insurable employment, and owner-operators who control more than 40% of the voting shares of their corporation are typically excluded. Independent contractors are also excluded, though misclassifying an employee as a contractor can expose a business to significant back-premium liability. When in doubt, the CRA's CPT1 ruling request process can clarify a worker's status.
If you receive a lump-sum severance payment upon termination, Service Canada may allocate those funds over a period of weeks, which delays when your EI benefits begin. The allocation is based on your normal weekly earnings. Payments in lieu of notice are treated differently from true severance or retiring allowances — the specifics depend on how the payment is structured and what your employment contract says. If you are navigating a termination scenario, it is a good idea to understand how your exit package will affect your EI start date before you sign anything.
Free 30-Min Consultation · No Obligation
Our Calgary team handles personal tax, corporate returns, GST/HST, payroll, and bookkeeping — all under one roof.
Swift Ltd · Calgary, Alberta · swiftltd.ca