Employment insurance premiums are set to decline by four cents as of January 1.
According to a press release from Employment and Social Development Canada, the EI rate for employees will be reduced to $1.58 per $100 of insurable earnings, a decrease compared to the 2019 rate.
The decrease also marks a reduction of 30 cents from 2016’s rate, meaning a single worker who earns $48,000 annually will pay $144 less in EI premiums in 2020 as compared to 2015, the federal government said.
Employers who pay 1.4 times the employee rate will see their 2020 rate decrease by six cents to $2.21.
Maximum Insurable Earnings will also increase to $54,200 from $53,100. That number is indexed on an annual basis. It represents the lining up to which EI premiums are collected and the maximum amount considered in applications for benefits.
The maximum annual EI contribution for a worker will decrease by $3.86 to $856.36. For employers, it will be down $5.41 to $1,198.90 per employee.
Additionally, the federal government said the premium Reduction Program will provide about $1.049 billion in premium relief in recognition of savings generated by short-term wage-loss plans.
For self-employed Canadians who have opted into EI, annual earnings required will increase to $7,279 for claims filed in 2020. The level of earnings required to be eligible for EI special benefits is also indexed annually to growth in the maximum insurable earnings.
Each year, the EI premiums are set based on a seven-year break-even rate.
The Senior Actuary’s report, which is used to set the rates, is available online.