Canada’s employment insurance (EI) premium rate for 2024 will be $1.66 per $100 of insurable earnings for workers — an increase of three cents from the current rate. The employer rate is rising to $2.32.
Randy Boissonnault said that rate is 22 cents lower than it was between 2013 and 2016 when it sat at $1.88.
“This reflects the continued strength in Canada’s labour market and is in keeping with the Government’s work to ensure that the EI Operating Account is on track to balance over the course of its mandated seven-year break-even horizon,” he said.
“Canadians have worked hard to help rebuild and grow our economy after the significant challenges brought on by the global pandemic. This hard work has paid off. Today, 983,000 more Canadians are working than when the pandemic hit, and Canada had the strongest economic growth in the G7 over the course of 2022.”
The Canada Employment Insurance Commission made available the Actuarial Report and its summary for the 2024 Employment Insurance (EI) premium rate. The rate is set at $1.66 per $100 of insurable earnings for employees and $2.32 for employers who pay 1.4 times the employee rate.
This represents a three-cent increase from the 2023 EI premium rate of $1.63 for employees and $2.28 for employers.
Each year, the Commission is responsible for setting the annual premium rate based on a seven-year break-even rate forecast by the EI Senior Actuary. The rate is set in order to generate just enough premium revenue to cover EI expenses over the next seven years and eliminate any cumulative surplus or deficit in the EI Operating Account. Annual changes to the premium rate are subject to a legislated limit of five cents.
The cumulative deficit in the EI Operating Account, which was largely incurred due to the increase in the number of unemployed and the temporary measures introduced during the COVID‑19 pandemic, is forecast to be $18.8 billion on Dec. 31, 2024.
The seven-year forecast break-even premium rate of $1.66 per $100 of insurable earnings in 2024 brings the EI Operating Account to a near cumulative balance by 2030.
The premium rate in 2024 for residents of Quebec covered under the Québec Parental Insurance Plan will be $1.32 per $100 of insurable earnings, while their employers will pay $1.85 per $100 of insurable earnings. The maximum annual contribution for a worker in Quebec will increase by $53.19 to $834.24 (up $74.47 for employers to $1,167.94 per employee). EI premium rates are different for residents of Quebec because the province administers its own parental insurance plan, which is financed by Quebec workers and their employers.
The Commission also announced that the maximum insurable earnings for 2024 will increase to $63,200 from $61,500 in 2023. It is indexed on an annual basis and is the maximum annual income insured under the program threshold on which workers and employers pay EI premiums. The maximum annual EI contribution for a worker will increase by $46.67 to $1,049.12 (up $65.34 for employers to $1,468.77 per employee).
Furthermore, the Premium Reduction Program, which allows employers to apply for a reduction of EI premiums if they offer qualified wage-loss plans to employees, will provide roughly $1.29 billion in premium reductions in 2024 to registered employers and their employees, shared seven twelfths and five twelfths respectively. This is in recognition of savings generated to the EI program by employer registered short-term wage-loss plans.
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