What Is Employment Insurance (EI)?
Mandatory federal insurance providing temporary income replacement for workers who lose their jobs, become ill, or take parental leave. Premiums are deducted from every paycheque.
Definition
Employment Insurance (EI) is a federal program that provides temporary financial assistance to Canadians who are unemployed, sick, or on parental or compassionate care leave. EI premiums are deducted from all insurable employment earnings. In 2026, the employee EI premium rate is 1.66% on maximum insurable earnings of $65,700, for a maximum annual employee premium of approximately $1,091. Employers pay 1.4 times the employee premium. To qualify for regular EI benefits, you generally need 420 to 700 insurable hours in the past 52 weeks (requirement varies by regional unemployment rate). Benefits replace 55% of average insurable weekly earnings, up to a maximum benefit of around $695 per week (2026). EI premiums are partially refundable through your annual tax return at lower incomes.
Formula
Example
You earn $55,000 per year. EI premium = 1.66% x $55,000 = $913 per year, or about $76 per month deducted from your paycheque.