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🧑🔎 Canada Employment Insurance Commission confirms 2024 Employment Insurance premium rate

Tuesday, 26 September 2023 02:23.PM

The Canada Employment Insurance Commission today 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 December 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.

The Senior Actuary's report on the 2024 EI premium rate and the Commission's summary of that report are available online to ensure continued transparency and accountability in the rate-setting process.

SOURCE: Employment and Social Development Canada

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