Every paycheque, most Canadians see a line item for "EI" deductions—but what exactly are you paying for, and how much will it cost you this year? Understanding your Employment Insurance EI contributions isn't just about knowing where your money goes; it's about recognizing the safety net you're building for yourself and your family.
In 2025 and 2026, the EI premium rate and maximums are changing. Whether you're starting a new job, planning a family, or simply want to understand your pay stub better, knowing the EI max contribution helps you budget accurately and plan for the unexpected. This guide breaks down everything you need to know about EI contributions in plain language, with real numbers that matter to your wallet.
TL;DR
- 2025 EI Max Contribution: Employees pay up to $1,077.48 annually (based on MIE of $65,700 and a premium rate of 1.64%)
- 2026 EI Max Contribution: Employees pay up to $1,123.07 annually (based on MIE of $68,900 and a premium rate of 1.63%)
- Employer Contribution: Employers pay 1.4 times the employee rate in most provinces (Quebec has separate rates)
- Who Pays: Nearly all Canadian workers contribute to EI automatically through payroll deductions
- Why It Increases: Adjustments reflect inflation, wage growth, and the cost of maintaining the EI program across Canada
- What You Get: Access to temporary income support during unemployment, illness, parental leave, and other qualifying situations
What Are the Key Details of EI Max Contribution in 2025?
Employment Insurance (EI) max contribution is the highest amount deducted from an employee's paycheque for EI premiums in a calendar year, based on the Maximum Insurable Earnings (MIE) set annually by the Canada Employment Insurance Commission.
In 2025, Canadian employees contribute to Employment Insurance based on a maximum annual insurable earnings threshold of $65,700, with a premium rate of 1.64% applied to their gross earnings up to that cap (Service Canada, 2025).
For Employees (Outside Quebec):
- Premium Rate: 1.64% of insurable earnings
- Maximum Insurable Earnings (MIE): $65,700 per year
- Maximum Annual Contribution: $1,077.48
For Employers:
- Premium Rate: 2.296% (1.4 times the employee rate)
- Maximum Annual Contribution per Employee: $1,508.47
For Quebec Residents: Quebec operates its own Quebec Parental Insurance Plan, so rates differ:
- Employee Rate: 1.31%
- Maximum Employee Contribution: $860.67
What does this mean practically? If you're earning $65,700 or more annually in 2025, you'll pay $1,077.48 in EI premiums over the year—roughly $41 per paycheque if you're paid bi-weekly. Once you hit this maximum, your employer stops deducting EI premiums until the new year.
What About 2026?
In 2026, Employment Insurance contributions increase slightly to reflect cost-of-living adjustments and wage growth across Canada, with the Maximum Insurable Earnings rising to $68,900 while the annual premium rate decreases slightly to 1.63% (Canada Employment Insurance Commission, 2025).
For Employees (Outside Quebec):
- Maximum Insurable Earnings (MIE): $68,900
- Premium Rate: 1.63%
- Maximum Annual Contribution: $1,123.07
- Increase from 2025: $45.59 more per year (about $1.75 per bi-weekly paycheque)
For Quebec Residents:
- Maximum Employee Contribution: $895.70
The $3,200 increase in maximum insurable earnings means higher-income Canadians will pay slightly more in 2026, but this adjustment also means more earnings are protected if you need to claim EI benefits.
Maximum Insurable Earnings (MIE)
Maximum insurable earnings represent the income ceiling on which Employment Insurance premiums are calculated each year, meaning any earnings above this threshold are not subject to EI deductions (Canada Employment Insurance Commission).
How MIE works:
- Earning less than MIE: You pay the premium rate of your total earnings (example: $45,000 annually = $738 in EI at 1.64%)
- Earning at or above MIE: You pay only the maximum contribution (example: $90,000 annually = $1,077.48 maximum in 2025)
EI Premium Rate
The EI premium rate is the percentage of your insurable earnings deducted from each paycheque to fund Employment Insurance benefits, set at 1.64% for employees in most provinces for 2025 and 1.63% for 2026 (Service Canada).
Employee Rates:
- 2025 Standard Rate: 1.64%
- 2026 Standard Rate: 1.63%
- 2025 Quebec Rate: 1.31% (lower due to separate provincial pension plan)
- 2026 Quebec Rate: 1.30%
Employer Rates:
- 2025 Standard Rate: 2.296% (1.4 times employee rate)
- 2026 Standard Rate: 2.282% (1.4 times employee rate)
Example: If you earn $3,000 per paycheque in 2025, your EI deduction is $49.20 while your employer pays $68.88.
Maximum Contribution Amounts
Maximum contribution amounts represent the total EI premiums you'll pay annually once your earnings reach or exceed the MIE threshold (Canada Revenue Agency).
2025 Maximum Contributions:
2026 Maximum Contributions:
Once you reach the maximum, contributions stop. This typically happens in December for most Canadians earning at or above the MIE, giving you slightly higher net pay for the remainder of the year.
EI Contribution Table
Employee contributions increased by 2.7% from 2024 to 2025 and will increase by another 4.2% from 2025 to 2026. For many Canadians, these increases feel small month to month but add up over the year. If cash flow is tight during this adjustment, solutions like Bree's interest-free cash advances can help bridge short-term gaps without adding debt.
What is Employment Insurance?
Employment Insurance is a federal income-support program that provides temporary financial assistance to Canadian workers who lose their jobs through no fault of their own, become ill, take parental leave, or need to care for a seriously ill family member (Service Canada).
EI covers:
- Regular Benefits: Up to 45 weeks for job loss
- Maternity and Parental Benefits: Up to 76 weeks combined
- Sickness Benefits: Up to 26 weeks for illness or injury
- Compassionate Care Benefits: Up to 26 weeks to care for gravely ill family members
- Family Caregiver Benefits: Up to 15 weeks for critically ill family members
Most Canadian workers are covered, though self-employed individuals must opt in voluntarily.
What Are EI Contributions?
EI contributions are mandatory payroll deductions automatically taken from your gross earnings each pay period to fund the Employment Insurance program, with both employees and employers sharing portions (Canada Revenue Agency).
Think of EI contributions as insurance premiums you pay with every paycheque. They're:
- Automatic: Your employer deducts them before you receive net pay
- Shared: Both you and your employer contribute
- Capped: Contributions stop once you reach the annual maximum
- Tax Deductible: They reduce your taxable income
All premiums flow into the Employment Insurance Operating Account, which funds benefits, program administration, and employment support services.
How EI Contributions Work in Canada
EI contributions function as a pay-as-you-go insurance system where employees and employers share the cost through regular payroll deductions calculated on insurable earnings (Service Canada).
The process:
- Your employer must calculate insurable earnings (regular wages, bonuses, commissions)
- Deductions appear on your pay stub each pay period
- Employers remit both portions to the Canada Revenue Agency
- Contributions stop at maximum once you reach the MIE threshold
- Reconciliation at tax time to catch over-contributions or errors
How to Calculate Your EI Contribution?
Calculating your EI contribution involves multiplying your gross insurable earnings by the premium rate up to the maximum insurable earnings threshold (Canada Revenue Agency).
Formula: EI Contribution = Insurable Earnings × Premium Rate (1.64% for 2025)
Examples:
- $45,000 salary in 2025: $45,000 × 0.0164 = $738 per year
- $80,000 salary in 2025: Only the first $65,700 counts = $1,077.48 maximum
- $2,500 bi-weekly in 2025: $2,500 × 0.0164 = $41 per paycheque
The CRA offers a free payroll calculator at canada.ca/payroll for precise calculation.
What Are the Employer Contributions and Responsibilities
Employer contributions to Employment Insurance require businesses to pay 1.4 times the employee premium rate, plus handle all administrative tasks (Canada Revenue Agency).
Employer obligations:
- Pay 2.296% of each employee's insurable earnings in 2025 (vs. 1.64% for employees)
- Calculate and remit payments monthly or quarterly
- Issue Records of Employment when employees leave
- Maintain payroll records for six years
For a $50,000 employee in 2025, the employer pays $1,148 annually, while the employee pays $820—a significant payroll cost for businesses.
Why EI Contributions Increase Each Year?
EI contributions increase annually primarily to keep pace with inflation and rising average wages, ensuring the program maintains adequate funding with transparency (Canada Employment Insurance Commission).
Key drivers:
- Wage growth: As Canadian incomes rise, the MIE must increase proportionally
- Program sustainability: Rates adjust to ensure sufficient funds during downturns
- Benefit enhancements: Recent expansions (like extended sickness benefits) increase costs
- Economic cycles: Rebuilding reserves after high-claim periods
FAQs
What is the maximum EI payment?
The maximum Employment Insurance payment in 2025 is $695 per week, representing 55% of average insurable weekly earnings up to the MIE (Service Canada, 2025). Your actual benefit depends on your earnings history and can be lower.
How much money can you make on top of EI?
You can earn up to 90% of your weekly EI benefit without penalty—any earnings beyond that reduce your EI payment dollar-for-dollar (Service Canada). This policy encourages part-time work while collecting benefits.
Do employers pay more EI than employees?
Yes, employers pay 1.4 times the employee rate—2.296% versus 1.64% in 2025—meaning they contribute $1.40 for every dollar employees pay (Canada Revenue Agency).
Is EI mandatory for all workers in Canada?
EI is mandatory for most employees earning insurable income, but self-employed workers (unless they opt in), workers over 70, and certain specific employment types are exempt (Service Canada).
How are EI contributions used?
EI contributions fund benefit payments (85-90% of budget), employment support programs, and administrative costs, with reserves maintained for economic downturns (Service Canada Annual Report).
Find Out How the EI Changes Affect Your Paycheck
Understanding EI changes helps you budget accurately. For most Canadians, the 2025 increase amounts to less than $3 per paycheque—but when combined with other payroll changes like additional CPP contributions and second additional CPP contributions, along with changes to Canada Pension Plan and basic exemption amounts, it matters.
Impact examples:
- $35,000 earner in 2025: $574 total annual contribution ($22.08 per bi-weekly paycheque)
- $60,000 earner in 2025: $984 total annual contribution ($37.85 per bi-weekly paycheque)
- Maximum earner in 2025: $1,077.48 total annual contribution ($41.44 per bi-weekly paycheque)
Managing the impact:
- Review your pay stub regularly
- Adjust your budget for January payroll changes
- Build an emergency buffer for unexpected expenses
When cash flow gets tight during pay transitions, Bree offers interest-free cash advances up to $500—no credit check, no hidden fees, just straightforward support when you need it.
Important Information and Notes
As announced by the Canada Employment Insurance Commission, the date when new rates apply is January 1st each year. For comparison purposes, it's additionally required that contributors determine whether they're subject to standard or Quebec rates. The result of these changes means the total CPP and EI deductions will increase for most workers. Information filed with the CRA must accurately reflect these rates and any situations where special types of employment might be exempt.
Citations:
[1] https://www.canada.ca/en/services/benefits/ei/ei-regular-benefit/benefit-amount.html
[2] https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/employment-insurance-ei/ei-premium-rates-maximums.html
[3] https://www.canada.ca/en/services/benefits/ei.html
[4] https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions.html
[5] https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/payroll/payroll-deductions-contributions/employment-insurance-ei/ei-premium-rates-maximums.html
Join our newsletter to get the latest updates
