The Canada Employment Insurance Commission has released the actuarial report and its summary of the employment insurance (EI) premium rate for 2025.
The new rate will be set at $1.64 per $100 of insurable earnings for employees, with employers contributing $2.30, which is 1.4 times the employee rate. This reflects a slight reduction from the 2024 rates, which stood at $1.66 for employees and $2.32 for employers.
The Commission sets the annual premium rate based on recommendations from the EI senior actuary, using a seven-year break-even forecast. This approach ensures that premium revenue will cover EI expenses over the next seven years, balancing out any surplus or deficit in the EI operating account. The rate can only be adjusted by a maximum of five cents per year, as mandated by law.
Due to the impacts of the COVID-19 pandemic, which led to higher unemployment and temporary support measures, the EI operating account is projected to have a cumulative deficit of $15.8 billion by the end of 2025. The seven-year break-even forecast for 2025, set at $1.64 per $100 of insurable earnings, aims to eliminate this deficit by 2031.
For Quebec residents covered under the province’s parental insurance plan, the 2025 premium rate will be slightly lower. Employees in Quebec will pay $1.31 per $100 of insurable earnings, while employers will contribute $1.83. This results in a maximum annual contribution of $860.67 for workers and $1,204.94 for employers, reflecting increases of $26.43 and $37, respectively. Quebec operates its own parental insurance plan, which is funded separately from the federal EI system.
In addition to the new rates, the Commission announced that the maximum insurable earnings for 2025 will rise to $65,700 from $63,200 in 2024. This figure represents the income cap on which EI premiums are calculated. As a result, the maximum annual contribution for employees will increase by $28.36 to $1,077.48, while employers will see their contribution rise by $39.70 to $1,508.47.
The premium reduction program, which incentivizes employers to offer qualified wage-loss plans, will continue to provide significant savings. In 2025, employers and their workers are expected to benefit from approximately $1.37 billion in reduced premiums, with savings shared in a seven-twelfths to five-twelfths split between employers and employees. The program acknowledges the cost savings generated for the EI system by these employer-sponsored wage-loss plans.
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