2020 Employment Insurance Premium Rate to be decreased


2020 Employment Insurance Premium Rate to be decreased

 

Sept 20, 2019

Global Korean Post

 

The Canada Employment Insurance Commission (CEIC) announced that the 2020 Employment Insurance (EI) premium rate will be $1.58 per $100 of insurable earnings – a decrease of 4 cents for employees compared to the 2019 rate, and a decrease of 6 cents to $2.21 for employers who pay 1.4 times the employee rate.

Each year on or before September 14, the CEIC is responsible for setting the annual premium rate based on the seven-year break-even rate, which is a rate forecast to balance the EI Operating Account over a seven-year horizon, including the elimination of any cumulative surplus or deficit, as forecast by the EI Senior Actuary. The Senior Actuary’s report on the EI premium rate and the CEIC’s summary of that report are available online to ensure continued transparency and accountability in the rate-setting process.

The CEIC also announced that the Maximum Insurable Earnings (MIE) for 2020 will increase to $54,200 from $53,100 in 2019. The MIE is indexed on an annual basis and represents the ceiling up to which EI premiums are collected and the maximum amount considered in applications for EI benefits. The maximum annual EI contribution for a worker will decrease by $3.86 to $856.36 (down $5.41 for employers to $1,198.90 per employee).

Furthermore, the Premium Reduction Program (PRP) will provide roughly $1.049 billion in premium relief in 2020 to registered employers and their employees, shared 7/12 and 5/12 respectively, in recognition of savings generated to the EI program by employer registered short-term wage-loss plans.

Finally, for self-employed Canadians who have opted-in to the EI program, the annual earnings required in 2019 will increase to $7,279 for claims filed in 2020. The level of earnings required by self-employed Canadians to be eligible for EI special benefits is indexed annually to growth in the MIE.

The premium rate in 2020 for residents of Quebec covered under the Quebec Parental Insurance Plan (QPIP) will be $1.20 per $100 of insurable earnings, while their employers will pay $1.68 per $100 of insurable earnings. The maximum annual contribution for a worker in Quebec will decrease by $13.35 to $650.40 (down $18.69 for employers to $910.56 per employee). EI premium rates are different for residents of Quebec, because the province of Quebec administers its own parental insurance plan, which is financed by Quebec workers and their employers.

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