EI Premiums: Employee and Employer Rates Explained

A straightforward breakdown of Employment Insurance premium rates, maximum insurable earnings, and how to calculate deductions for your workforce.

8 min read Beginner February 2026

Stack of official payroll documents showing EI premium rate tables and calculation worksheets for 2026

Understanding EI in Canada

Employment Insurance premiums are something you’ll deal with regularly if you’re running payroll. They’re not complicated once you understand the basic structure — there’s a rate, a maximum, and a calculation. That’s really it.

What makes it important is that both employees and employers pay into the system. Your employees see the deduction on their paychecks. You’re responsible for collecting it, matching a portion, and remitting everything to Service Canada. Get it wrong, and you’ll hear about it during an audit.

This guide walks you through the rates, the maximums, and the actual math. We’ll show you how to calculate what comes off each paycheck and what you owe as an employer. By the end, you’ll have the concrete numbers and the method — no guessing required.

Close-up view of payroll calculation spreadsheet with EI deduction formulas highlighted in blue, tax columns visible

2026 EI Premium Rates

The rates change annually, and they’re different for employees and employers. For 2026, here’s what you’re working with.

Employees pay 1.62% of insurable earnings (in most provinces). That’s the amount deducted from their paychecks. Employers pay 1.66% — slightly higher than the employee rate. These percentages apply only to earnings up to the maximum insurable earnings limit, which we’ll cover next.

Quebec operates its own system called the Quebec Parental Insurance Plan (QPIP) instead of the federal EI program, so the rates and rules differ there. If you’ve got employees in Quebec, you’ll need to handle that separately.

2026 Premium Rates (Canada)

Employee Rate: 1.62%

Employer Rate: 1.66%

Maximum Insurable Earnings: $63,200

Detailed chart showing 2026 EI premium rate breakdown by province with employee and employer percentage columns

Visual representation of maximum insurable earnings calculation with salary progression bars showing where EI contributions stop

Maximum Insurable Earnings Cap

Here’s where it gets practical. You don’t pay EI on all earnings — only up to a maximum. For 2026, that cap is $63,200. Once an employee hits that threshold of earnings in a year, you stop deducting EI from their paychecks for the rest of the year.

This matters because it means your high-income earners won’t have EI deducted on their entire salary. If someone makes $100,000 annually, you’re only calculating EI on the first $63,200 of that.

The maximum changes yearly — it’s indexed to average industrial wages. So you’ll need to update your payroll system each January to reflect the new amount. Missing this is a common mistake, and it’ll throw off your remittances to Service Canada.

Quick Example

Employee earns $70,000 per year. Maximum insurable earnings is $63,200. You calculate EI only on $63,200, not the full $70,000. The remaining $6,800 is exempt from EI contributions.

How to Calculate EI Deductions

The math is straightforward. Take the employee’s insurable earnings (up to the maximum), multiply by the employee rate, and that’s what comes off their paycheck.

For the employer side, it’s the same approach — use the employer rate instead. You’ll deduct the employee amount and also calculate what you owe as an employer.

Identify Insurable Earnings

Take the gross pay for the pay period, but cap it at the maximum insurable earnings ($63,200 annually). Most weekly or bi-weekly employees won’t hit this, but it matters for annual calculations.

Apply Employee Rate

Multiply insurable earnings by 1.62% (the 2026 employee rate). This is the amount you deduct from the employee’s paycheck.

Calculate Employer Amount

Multiply the same insurable earnings by 1.66% (the 2026 employer rate). This is what you contribute as the employer — it’s a separate cost from the employee deduction.

Remit to Service Canada

Combine all employee deductions and employer contributions. Remit the total according to your schedule — typically monthly, but it depends on your remittance frequency.

Detailed payroll calculation worksheet showing step-by-step EI deduction formula with example numbers and result highlighted

Business owner reviewing payroll records showing employee and employer EI contribution split on monthly summary report

Employer Contribution Responsibilities

As an employer, you’re not just collecting EI from employees — you’re also paying into the system. Your contribution is 1.66% of insurable earnings. It’s a real cost that impacts your payroll budget.

The key difference between employee and employer rates is that your contribution doesn’t reduce employee pay. You’re paying this separately from what comes off their checks. It’s a business expense.

Many employers track this as a payroll tax liability. You’ll accumulate both the employee deductions you’ve withheld and your own contributions, then remit them together to Service Canada. Missing a remittance deadline can result in penalties, so it’s worth setting up a system to track this automatically.

Pro Tip

Keep a running tally of EI amounts throughout the year. Don’t wait until remittance is due to figure out what you owe. Most accounting software handles this automatically, but it’s worth verifying quarterly that the numbers look right.

Remitting EI to Service Canada

Once you’ve calculated EI for all your employees and determined your employer contribution, you need to remit the total to Service Canada. The timing depends on your business size and payroll frequency.

Most small to medium businesses remit monthly. Some larger employers remit more frequently. Your remittance schedule is determined when you register with the CRA for payroll deductions.

You’ll include your EI remittance with your other payroll deductions — CPP contributions and income tax withholding. Everything goes to the CRA, and they handle directing the EI portion to Service Canada. Submitting late results in penalties and interest, so treat this as a non-negotiable deadline.

Before You Remit

Verify all employee insurable earnings are capped at $63,200
Check that employee rate (1.62%) was applied correctly
Confirm employer contribution (1.66%) is included
Add employee deductions and employer contributions together
Submit by your assigned remittance deadline

Service Canada remittance form with filled-in EI contribution amounts and payment confirmation stamp

Key Takeaways

EI premiums don’t need to be complicated once you understand the structure.

The Rates

Employees pay 1.62%, employers pay 1.66%. Both apply to insurable earnings only, not all compensation.

The Cap

Maximum insurable earnings is $63,200 for 2026. Once an employee reaches that, no more EI is deducted for the year.

The Calculation

Insurable earnings rate = deduction (or contribution). It’s simple arithmetic. Automate it to avoid errors.

The Deadline

Remit to Service Canada by your assigned deadline. Late payments trigger penalties. Set calendar reminders or automate submissions.

Need help with other payroll calculations? Check out our guides on CPP contributions and T4 preparation.

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Disclaimer

This guide is provided for informational purposes only and doesn’t constitute professional accounting or legal advice. EI rates, maximums, and regulations are subject to change. We’ve included 2026 rates as of publication, but you should verify current rates directly with Service Canada or the CRA before processing payroll. Every business situation is different — if you’re uncertain about your specific obligations, consult with an accountant or payroll professional who can review your particular circumstances.