Every September, the Canada Employment Insurance Commission (CEIC) is required by law to set next year's Employment Insurance premium rate — and every September, that rate flows straight into every payroll system in the country the following January 1, regardless of which province an employer operates in. This year's confirmation landed on September 14, 2026: the 2027 EI premium rate rises to $1.64 per $100 of insurable earnings for employees, and the maximum insurable earnings ceiling climbs to $70,800. For businesses in Alberta, British Columbia, Ontario, and everywhere else outside Quebec's separate parental insurance regime, this is a confirmed change to budget for now, not a proposal to wait on.
What the Commission actually confirmed
The CEIC's announcement sets three numbers that matter for payroll, all effective January 1, 2027:
- Employee premium rate: $1.64 per $100 of insurable earnings, up from $1.63 in 2026.
- Employer premium rate: $2.30 per $100 of insurable earnings — employers pay 1.4 times the employee rate, as they do every year — up from $2.28 in 2026.
- Maximum insurable earnings (MIE): $70,800, up from $68,900 in 2026.
Those figures combine to raise the maximum annual EI premium a single employee can pay in 2027 to $1,161.12, an increase of $38.05 over 2026's $1,123.07 cap. On the employer side, the maximum annual EI contribution per employee rises to $1,625.57, up $53.27 from $1,572.30 in 2026. Because the MIE — not just the rate — increased, every employee earning at or above the new ceiling will see a higher EI deduction next year even though the per-$100 rate itself moved only one cent.
Quebec employers and employees are governed separately because of the Québec Parental Insurance Plan (QPIP), which carves parental and maternity benefits out of the federal EI premium. The 2027 EI rate for Quebec-based employees is $1.29 per $100 of insurable earnings, with employers paying $1.81 per $100 — both lower than the rest-of-Canada rate because QPIP is funded through separate provincial premiums.
Source: Employment and Social Development Canada — Canada Employment Insurance Commission confirms 2027 Employment Insurance premium rate and Summary of the 2027 Actuarial Report on the Employment Insurance Premium Rate.
Why the rate moved, and why it's not arbitrary
Unlike many federal measures that start as budget proposals and work through Parliament, the EI premium rate is set through a mechanical, legislated process. Under the Employment Insurance Act, the CEIC sets the rate each September based on a seven-year break-even forecast prepared by the EI Senior Actuary — the rate calculated to bring the EI Operating Account to balance seven years out, smoothing year-to-year swings rather than reacting to a single year's claims volume. The 2027 rate is being set against a forecast cumulative deficit in the EI Operating Account of $15.6 billion as of December 31, 2026, with the $1.64 rate calculated to return the account to balance by the end of 2033.
This matters for how confidently a business can plan around it: because the rate-setting mechanism is statutory rather than the outcome of a budget bill working through Parliament, there is no Royal Assent milestone to track the way there is for most tax changes. The rate the Commission announces in September is the rate that takes effect the following January 1 — it does not require further legislative action to become binding on payroll.
The Commission also confirmed that the Premium Reduction Program continues into 2027, providing roughly $1.7 billion in premium reductions to registered employers whose approved wage-loss replacement plans reduce the burden EI would otherwise place on short-term disability claims. Employers with an existing reduced-rate registration should confirm with their payroll provider or the CRA that the reduced employer rate carries forward correctly into the new year rather than defaulting to the standard 1.4x rate.
Source: Summary of the 2027 Actuarial Report on the Employment Insurance Premium Rate.
What this means alongside the CPP changes already coming in 2027
This is not the only statutory payroll change landing on January 1, 2027. The CPP base contribution rate is separately legislated to fall from 9.9% to 9.5% combined (4.75% each for employer and employee) starting the same date — a genuine rate cut, moving in the opposite direction from EI's modest increase. The two changes are unrelated in cause (one is an actuarial EI rate-setting exercise, the other a legislated CPP base-rate adjustment) but land on the same pay stub on the same day, and payroll systems need both updated correctly for the first pay run of 2027. See our CPP base rate cut explainer for what changes — and what doesn't — on the CPP side.
Net effect for a typical employee earning above both the CPP YMPE and the new EI ceiling: a lower CPP base deduction partially offsets a higher EI deduction, but the two don't move by the same dollar amount, and CPP2 (the enhanced tier on earnings between the YMPE and YAMPE) is unaffected by either change. Payroll teams should not assume the two changes cancel out without running the actual numbers for their own wage bands.
What to actually do before January 1, 2027
- Confirm payroll software vendors have scheduled the update. Most cloud payroll platforms push CPP/CPP2/EI rate and ceiling updates automatically, but this is worth a direct confirmation rather than an assumption, particularly for businesses running custom or in-house payroll calculations.
- Re-forecast total payroll tax cost for 2027, factoring in both the EI increase and the CPP base-rate cut together, not just one in isolation — the net change varies by wage band and isn't uniform across your workforce.
- Check your Premium Reduction Program registration if your business offers a qualifying short-term disability plan, to ensure the reduced employer EI rate is correctly applied from the first pay period of 2027.
- Update any internal budget templates, quotes, or labour-cost models that hard-code the current $68,900 MIE or $1.63/$2.28 rates — these are common places outdated figures linger past a rate change.
- Flag the change to clients or finance teams now if you prepare payroll for others, since the September confirmation gives a full pay-run cycle of lead time before the change is live.
Key takeaways
- The 2027 EI premium rate is confirmed, not proposed: $1.64 per $100 of insurable earnings for employees, $2.30 for employers, effective January 1, 2027 — set through the CEIC's statutory September rate-setting process, with no further legislative step required.
- Maximum insurable earnings rise to $70,800 (from $68,900), pushing the maximum annual employee EI premium to $1,161.12 and the maximum employer premium to $1,625.57.
- Quebec's rate stays lower ($1.29 employee / $1.81 employer) because of the separate QPIP parental-benefits regime.
- This lands on the same date as the legislated CPP base-rate cut to 9.5% — the two move in opposite directions and need to be modelled together, not assumed to offset.
RN Canada runs payroll and statutory-deduction compliance for owner-managed businesses across Alberta, British Columbia, and Ontario, including CPP, CPP2, and EI calculation, remittance, and year-end T4 preparation. If you'd like your 2027 payroll budget modelled against the confirmed rates before your first pay run of the year, our bookkeeping and payroll team can build that forecast now.