Commission publishes unemployment insurance rates for 2025

The Employment Insurance Commission of Canada has released its actuarial report and summary of Employment Insurance (EI) premium rates for 2025.

The new rate will be set at $1.64 per $100 of insurable earnings for employees, with employers contributing $2.30, or 1.4 times the employee rate. This reflects a slight reduction from the 2024 rates of $1.66 for employees and $2.32 for employers.

The Commission sets the annual contribution rate based on the recommendation of EI’s senior actuary, using a seven-year break-even forecast. This approach ensures that contribution revenues will cover EI’s expenses for the next seven years, offsetting any surpluses or deficits in EI’s operating account. The rate may be adjusted by up to five cents per year, as required by law.

Due to the impact of the COVID-19 pandemic, which has led to increased unemployment and the introduction of 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 breakeven forecast for 2025, set at $1.64 per $100 of insurable income, aims to eliminate this deficit by 2031.

For Quebecers covered by the provincial parental insurance plan, the 2025 premium rate will be slightly lower. Quebec employees will pay $1.31 for every $100 of insurable earnings, while employers will pay $1.83. This amounts to a maximum annual premium of $860.67 for employees and $1,204.94 for employers, representing an increase 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 in 2025 will increase from $63,200 in 2024 to $65,700. This figure is the upper income limit on which EI premiums are calculated. As a result, the maximum annual premium for employees will increase by $28.36 to $1,077.48, while employers will see their premium increase by $39.70 to $1,508.47.

The premium reduction program, which encourages employers to offer qualified wage loss plans, will continue to provide significant savings. In 2025, employers and their employees are expected to benefit from approximately $1.37 billion in reduced premiums, with the savings being split on a seven-twelfths-five-twelfths basis between employers and employees. The program recognizes the cost savings generated for the EI system by these employer-sponsored wage loss plans.

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