2027 EI Premiums: What Small Canadian Employers Will Pay

The 2027 Employment Insurance (EI) premium rate is $1.64 per $100 of insurable earnings for employees, and employers pay 1.4 times that, about $2.30. Maximum insurable earnings rise to $70,800. For a small employer, that means up to $1,625.57 per worker in employer premiums next year, up $53.27.

Realmilitaryflix covers money, renting and small business benefits in Canada. This explainer is for owners of small Canadian businesses who run payroll, plus bookkeepers and self-employed people who ask whether to opt in. It covers the new rate, a worked payroll example, the Quebec difference and one program that can lower the bill.

What are the 2027 EI premium rate and earnings limit?

The 2027 EI rate is $1.64 per $100 of insurable earnings, with maximum insurable earnings of $70,800. The Canada Employment Insurance Commission set the rate on September 14, according to an Insurance Business report. The rate is up one cent from $1.63 in 2026, and maximum insurable earnings are up from $68,900.

The report says the maximum annual employee premium is $1,161.12, up $38.05, and the maximum employer premium is $1,625.57, up $53.27. The maximum weekly benefit rises to $749 from $729.

The Office of the Chief Actuary, part of the Office of the Superintendent of Financial Institutions, explains where the number comes from. Its 2027 actuarial report shows a seven-year break-even rate of 1.62 percent. The Insurance Business report says an addendum tied to August 25 tariff-relief measures added two cents, which brings the rate to 1.64 percent.

The same report projects the EI Operating Account's cumulative deficit at $16.7 billion by the end of 2027. A large deficit is one reason premiums keep creeping up, though the rate is set to cover costs over seven years, not one.

How much will EI cost a small employer per employee?

Multiply each worker's insurable earnings, up to $70,800, by 1.64 percent for the employee share and by 2.296 percent for the employer share. The employer rate is 1.4 times the employee rate, which the Commission rounds to about $2.30 per $100. Earnings above the limit are not subject to premiums.

The table below shows the 2027 cost for typical annual salaries outside Quebec.

For a business with five employees, each earning $60,000, the employer share is $6,888 for the year. That is $6,888 divided across the payroll, or about $574 a month. In 2026, with a rate of 1.63 percent, the same payroll would have cost about $6,846, so the increase is roughly $42 a year for this example.

The jump is small for lower-paid staff and larger for higher earners, because the earnings cap rose by $1,900. An employee earning $70,800 or more adds $53.27 to your employer cost. A team of ten at or above the cap adds $532.70.

These figures cover EI only. Your payroll also includes Canada Pension Plan contributions, which we cover in our guide to CPP contributions for the self-employed in 2026.

How did the 2027 rate change compare with recent years?

The rate has moved only a little in the past three years, but the earnings cap has risen steadily. The Office of the Chief Actuary's 2026 actuarial report shows maximum insurable earnings of $68,900, up 4.9 percent from $65,700 in 2025. For 2027, the cap rises to $70,800, a further increase of about 2.8 percent.

That means the maximum employer premium has climbed even when the rate barely moved. A rate of 1.63 percent on a cap of $68,900 gave $1,572.30 in 2026. A rate of 1.64 percent on a cap of $70,800 gives $1,625.57 in 2027, an increase of $53.27.

The 2026 report also notes that the rate reflected the removal of the Small Business Premium Rebate. That program once gave a rebate to employers with small premium bills. Its removal means very small employers no longer get that offset, so every dollar of premium counts in a tight budget.

The September 2025 report set a break-even rate of 1.61 percent for 2026, and later measures raised the final 2026 rate to 1.63 percent. The same pattern repeated for 2027: a 1.62 percent break-even rate, plus two cents from the tariff-relief addendum, gave 1.64 percent. Expect rates to track both the unemployment outlook and government measures.

How should you budget for the increase?

Budget by adding a small cushion to your payroll forecast. The EI change is modest, but combined with higher wages and other payroll costs it can strain a thin margin. A simple approach is to add 2.3 percent of insurable payroll for employer EI and then check the total against last year's actual.

Look at timing, too. EI premiums are remitted with other payroll deductions, so the cost arrives every pay period, not in one lump. A small business with ten employees at $50,000 each pays about $11,480 a year in employer EI, which is $957 a month spread across payroll runs.

If you set prices based on labour costs, bring the change into your next review. Tax changes matter here too: see our note on the pause on B.C.'s PST expansion to professional services for another cost question that B.C. firms are still planning around. Even a half-percent shift in payroll cost matters when margins are only a few points.

What is different in Quebec?

Quebec workers pay a lower EI rate because the province runs its own parental insurance plan. The Insurance Business report says Quebec residents pay $1.29 per $100 in 2027 and employers pay $1.81, a 0.35 percentage point reduction. The actuarial report shows the Quebec Parental Insurance Plan reduction at 0.35 percent, up from 0.33 percent.

Quebec employers also pay premiums to the Quebec Parental Insurance Plan, which has its own rates and maximums. Quebec employers should check both sets of numbers with their payroll provider.

If you have staff in several provinces, set up each employee by work location. A payroll system that handles Quebec separately will avoid mistakes. Check the setup in January, before the first pay run.

How can a small employer lower its EI premiums?

Some employers can pay a reduced rate through the Premium Reduction Program. The program applies to employers with a qualifying short-term wage-loss plan, such as short-term disability coverage, that pays employees at least as much as EI sickness benefits would. The Insurance Business report estimates $1.687 billion in savings for about 23,800 registered employers in 2027.

The program has rules. The reduction must be shared with employees, and the employer must apply and report each year. Check the details with Service Canada before you design a plan.

This is where benefits and payroll meet. A small employer that already offers short-term disability coverage may qualify for a lower rate. If you do not offer it, compare the cost of a plan against the possible savings. Often a plan costs more than the premium reduction, so it makes sense only if you want the coverage for its own sake.

Talk to your insurance broker or benefits adviser. Ask whether the plan meets the program's requirements and what paperwork you need. Keep a copy of the policy with your payroll records.

What about self-employed owners and contractors?

Self-employed owners do not pay EI unless they opt in. Those who register for EI special benefits pay only the employee-side premium, according to the Insurance Business report, and a minimum earnings threshold of $9,515 applies for 2027. The benefits cover things like sickness, maternity and parental leave, not regular unemployment.

Think about the trade-off. A sole proprietor pays about $1.64 on each $100 of earnings up to the cap, which is $1,161.12 at the maximum. In return, they gain access to benefits they might otherwise lack. For a business owner with no private disability plan, that can be a fair deal.

Corporations that pay owners a salary treat the owner like any employee for EI purposes, with some exceptions. Ask your accountant how your own ownership share affects whether the work is insurable.

What should you do before January?

Prepare your payroll for the new rate before the first pay run of 2027. Update your payroll software, check the new maximums and confirm that the program year starts correctly. Then update your budget for the added cost.

Here is a short list to work through.

Our look at the CRA's digital platform reporting rules for online sellers covers another year-end task for some small businesses. Put both on the same January checklist.

Finally, confirm the figures against official sources before you finalize payroll. The numbers here come from a trade report and the actuarial report, and the Government of Canada publishes the official rates.

The practical answer

Small employers should expect a small increase in EI costs in 2027: one cent more per $100, and a higher earnings cap that adds up to $53.27 per top-earning employee. Realmilitaryflix's editors suggest updating payroll in December and checking whether a short-term disability plan could lower the rate.

Your next step is to run a quick calculation for each employee, using 2.296 percent up to $70,800, then add the total to your 2027 budget.