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Effective January 1, 2026, Canada's Employment Insurance maximum annual insurable earnings increased from CAD 65,700 to CAD 68,900. Employee EI rates decreased slightly to 1.63% (1.30% in Quebec) and employer rates to 2.28% (1.82% in Quebec). Maximum annual employer contributions rose to CAD 1,572.30 per employee (CAD 1,253.98 in Quebec) and employee contributions to CAD 1,123.07 (CAD 895.70 in Quebec) due to the higher earnings cap. These changes apply to all employers and employees subject to EI for payments made on or after January 1, 2026.
Effective January 1, 2026, Canada's Employment Insurance (EI) maximum annual insurable earnings increased from CAD 65,700 to CAD 68,900. Employee contribution rates decreased slightly to 1.63% (1.30% in Quebec), and employer rates decreased to 2.28% (1.82% in Quebec). Despite the lower percentage rates, maximum annual contributions rose due to the higher earnings cap: employers now pay up to CAD 1,572.30 per employee (CAD 1,253.98 in Quebec), while employees contribute up to CAD 1,123.07 (CAD 895.70 in Quebec).
Who is affected
All employers and employees subject to Employment Insurance in Canada. This includes employers operating in all provinces and territories, with distinct rates continuing to apply for Quebec-based employees. The changes affect payroll calculations for all payments made on or after January 1, 2026.
What's changing
The maximum insurable earnings threshold increased by CAD 3,200, and contribution rates decreased marginally for both employers and employees. Quebec maintains separate, lower rates than the rest of Canada.
| Component | Rest of Canada 2025 | Rest of Canada 2026 | Quebec 2025 | Quebec 2026 |
|---|---|---|---|---|
| Maximum insurable earnings | CAD 65,700 | CAD 68,900 | CAD 65,700 | CAD 68,900 |
| Employer rate | 2.30% | 2.28% | 1.83% | 1.82% |
| Employee rate | 1.64% | 1.63% | 1.31% | 1.30% |
| Maximum employer contribution | CAD 1,508.47 | CAD 1,572.30 | CAD 1,204.94 | CAD 1,253.98 |
| Maximum employee contribution | CAD 1,077.48 | CAD 1,123.07 | CAD 860.67 | CAD 895.70 |
Contributions stop once an employee's annual insurable earnings reach CAD 68,900.
What NEO partners and clients should do
- Update payroll systems to apply the new maximum insurable earnings of CAD 68,900 and revised contribution rates for all payments dated January 1, 2026 or later
- Verify that Quebec employees are processed using the Quebec-specific rates (1.82% employer, 1.30% employee)
- Communicate the updated deduction amounts to employees before the first 2026 payroll run
- Review year-end 2025 payroll to ensure employees who reached the 2025 cap (CAD 65,700) resume EI deductions in January 2026 under the new threshold
