EI Premiums: What You Need to Know
Employment Insurance (EI) provides temporary income to workers who lose their jobs, as well as maternity, parental, and sickness benefits.
2025 EI Rates
- Employee rate: 1.63% (1.272% in Quebec)
- Maximum insurable earnings: $63,200
- Maximum annual premium: ~$1,030 (~$804 in Quebec)
- Employer rate: 1.4x the employee rate
Why Quebec Has Lower EI Rates
Quebec residents pay reduced EI premiums because the province administers its own parental insurance plan (QPIP), which covers maternity and parental benefits separately. QPIP has its own premium of 0.494% on earnings up to $94,000.
When Do EI Premiums Stop?
Once your earnings reach the maximum insurable earnings ($63,200), no further EI premiums are deducted for the rest of the year. This means higher earners effectively stop paying EI partway through the year.
How EI Premiums Are Calculated in Practice
EI premiums are calculated on a per-pay-period basis using your year-to-date insurable earnings and the current premium rate. For most employees, the employer deducts 1.63% of each pay period’s insurable earnings until the annual maximum of $1,030.40 (1.63% × $63,200) is reached. For example, if you earn $3,000 bi-weekly, your employer would deduct $48.90 per pay period until the cap is hit—typically around late September or October for full-time, year-round workers. If your income is irregular or you change jobs mid-year, your total premiums may fall slightly below or exceed the maximum depending on timing and cumulative earnings. It’s important to note that insurable earnings include not only regular wages but also certain bonuses, commissions, and vacation pay—though some types of income, such as tips (if not reported), may not count.
EI Premiums vs. Canada Pension Plan (CPP) Deductions
While both EI and CPP contributions are mandatory payroll deductions for most employed Canadians, they serve different purposes and follow distinct rules. CPP contributions go toward your retirement, disability, or survivor benefits and have a separate contribution ceiling ($68,500 in 2025) and employee rate (5.95% in 2025). In contrast, EI premiums fund short-term income support for unemployment, illness, pregnancy, or parental leave and are capped at $63,200 in insurable earnings. Another key difference: CPP contributions continue until you start receiving a retirement pension or reach age 70, whereas EI premiums stop once the annual earnings cap is reached—even if you continue working. Understanding how both deductions apply helps workers better forecast take-home pay and plan for future benefits eligibility.
Using the Canadian Salary Calculator to Estimate EI Premiums
Our EI calculator 2025 tool integrates up-to-date federal and Quebec-specific premium rates to give you an accurate estimate of your EI contributions. By entering your annual gross income, pay frequency, and province of residence, the calculator automatically applies the correct rate (including Quebec’s 1.272% rate), checks against the $63,200 insurable earnings ceiling, and breaks down your estimated bi-weekly or monthly EI deduction. This is especially useful for freelancers transitioning to salaried roles, job offer comparators, or those planning side-hustle income alongside main employment. The calculator also highlights the break-even point during the year when EI deductions stop—helping you anticipate changes in your net pay over time. For Quebec residents, the tool even adjusts for QPIP premiums to avoid double-counting or underestimating total deductions.