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Maximum Insurable Earnings

Changes to Maximum Insurable Earnings for Employment Insurance in 2022

The Canada Employment Insurance Commission (CEIC) has announced an increase in the Maximum Insurable Earnings (MIE) for Employment Insurance in 2022. This means that the highest level of income for which EI premiums are paid will rise from $56,300 in 2021 to $60,300 in 2022.

What is MIE?

The Maximum Insurable Earnings (MIE) is the highest level of income for which Employment Insurance (EI) premiums are paid. The MIE is updated each year and determines the maximum amount of money that can be paid each week in benefits under the EI programmed.

Maximum Insurable Earnings

How will the MIE increase impact employees and employers?

Employees who are insured must pay EI payments on all earnings up to the yearly maximum wage of $60,300. This implies that a $1.58 deduction will be made for every $100 of pay earned until the annual limit of $60,300 is reached. The increase in MIE means that insured workers will pay a maximum annual EI premium of $952.74 in 2022, up from $889.54 in 2021.

Employers and their employees can save money on their health insurance costs through a programme called the Premium Reduction Program, which is set up by employers to provide short-term wage-loss plans.

What is the impact of the MIE increase on EI benefits?

Beginning in January 2022, the weekly maximum EI compensation rate will rise from $595 to $638. Claims filed before December 31, 2021, will be unaffected by the 2022 MIE rise.

What about people in Quebec?

People in Quebec are covered by the Quebec Parental Insurance Plan (QPIP), which costs $1.20 for every $100 of insurable income ($1.68 for employers). The premium rate in Quebec is lower than the rest of Canada since the Province of Quebec has been collecting premiums from its employees since January 2006 to run its own maternity, parental, and paternity benefits through the Quebec Parental Insurance Plan.


Updates on Employment Insurance (EI) Premium Rates and Basic Exemption

In 2021 and 2022, the EI premium rate is set at $1.58 per $100 of insurable wages. The government announced the replacement of the Canada Emergency Response Benefit (CERB) with three new benefits on August 20, 2020, to prevent additional expenses for employees and businesses due to the pandemic. The EI Senior Actuary projected that the 2022 rate would have been $1.81 without these interim measures.

For 2022, the maximum insurable earnings (MIE) will be $60,300, representing a 7.1 percent increase from the $56,300 MIE in 2021.

While there is no general exemption for EI, employees whose insurable earnings do not exceed $2,000 in a given year are entitled to a full refund of their EI premiums.


Calculation of Maximum Insurable Earnings (MIE)

The Maximum Insurable Earnings (MIE) are determined by the percentage increase in the average weekly earnings of the industrial aggregate in Canada, according to Statistics Canada. The calculation for the 2022 MIE increase is as follows:

Divide the average of the preceding 12-month period ending on April 30, 2021, by the average of the 12-month period ending on April 30, 2022. Multiply the resulting percentage increase by the previous year’s MIE figure before rounding, and round the result to the nearest hundred dollar multiple.

Maximum Insurable Earnings

Understanding Employment Insurance (EI) and its Programs

The EI Break-Even Rate: How it Works

Previously, the Canada Employment Insurance Financing Board (CEIFB) was responsible for setting EI rates, but it was dissolved, and a new rate-setting system went into effect in 2017. The new system sets the EI premium rate annually at a seven-year break-even rate.

EI for Self-Employed: What You Need to Know

Self-employed individuals who enroll in the employment insurance program pay the same premium rate as employees. However, only exceptional benefits are available to them, as shown in the chart above. Moreover, the amount of self-employment income required to qualify for special benefits increases every year.

EI Premium Reduction Program for Employers: A Cost-Saving Initiative

Employers who provide short-term disability coverage to their workers may be eligible to pay less than the typical 1.4x employee rate, thanks to the EI Premium Reduction Program.