Reducing Your Employment Insurance (EI) Premiums - Frequently Asked Questions

In this section of our site, you will find the answers to questions that employers ask most often. If you have a question and you cannot find the answer on these pages or elsewhere on our site, contact us and one of our staff will gladly help you.

To return to the list of questions, use the arrow below each answer.

1. How do I apply for a premium reduction ?
2. When may I apply for a premium reduction ?
3. What must I submit with my application ?
4. What if some of these documents are not available when I apply ?
5. In addition to the date I apply, what other factors determine my reduced rate ?
6. What are the basic requirements of a short-term disability plan ?
7. What if I have some employees not covered by the plan?
8. Must I meet other requirements in addition to having an acceptable plan ?
9. How much will my reduction be ?
10. Can I receive a retroactive reduction ?
11. How will I receive my reduction ?
12. What if I don't qualify ?
13. What if I don't agree with the decision made on my application ?
14. How will the reduction affect the administration of my payroll ?
15. What must I do to retain my reduction ?
16. What if I want to cover a new group of employees under a plan ?
17. a) What if I make changes to my plan or cancel it?
    b) What if I change my address or payroll deductions account ?
    c) What if there is an ownership change or a change to the organizational structure ?

1.		Who can apply for a premium reduction ? Employers who have insured employees covered by a short-term disability plan may apply. Insured employees are those on whose behalf an employer remits EI premiums to the Canada  Revenue Agency (CRA).
2.		How do I apply for a premium reduction ? If you believe the short-term disability plan you provide to your employees meets the criteria described in Part 1, item 1.4 to 1.9 of the Program Guide, complete and submit the initial application form provided on this site.
3.		When may I apply for a premium reduction ? You may apply at any time. If your plan meets the requirements for a premium reduction on the date you applied, the effective date of the reduction will be the date you applied, otherwise the effective date of your reduction is based on when your plan becomes a qualifying plan. The earlier in the year you apply, the better your reduced rate could be. For more information, refer to Part II - item 4 of the Program Guide.
4.		What must I submit with my application ? You must submit a copy of: the short-term disability plan(s) you provide to your employees, any collective agreements(s) that are applicable to the employees covered by the short-term disability plan(s) and the written mutual agreement between you and your employees regarding your obligation to return their portion of the reduction , if such an agreement exists.
5.		What if some of these documents are not available when I apply ? Submit your application along with any documents you can supply. We will contact you to request any missing documentation and/or additional information required when we assess your application.
6.		In addition to the date I apply, what other factors determine my reduced rate ? Your reduced rate is also determined by the type of short-term disability plan you provide to your employees and the number of months during the year the plan meets our requirements. For more information regarding plans, refer to the Program Guide, Introduction - What type of short-term disability plan qualifies?
7.		What are the basic requirements of a short-term disability plan ? The plan must: provide at least 15 weeks of benefits, match or exceed the level of benefits provided under EI, pay benefits within 14 days of a disability, allow employees covered by the plan to claim benefits after an eligibility period of 3 months or less, cover employees on a 24-hour-a-day basis.
8.		What if I have some employees not covered by the plan ? You would not be entitled to a reduction on behalf of these employees. This means that if you were granted a reduction, you would be required to report these employees under a separate payroll deductions account from the one that would be assigned a reduced rate. For more information, refer to Part 1, item 1.3 of the Program Guide.
9.		Must I meet other requirements in addition to having an acceptable plan ? Yes, it is your obligation to ensure that employees covered by the plan benefit from the reduction in an amount at least equal to 5/12 of the total savings. For more information, refer to Part 1, item 1.2 of the Program Guide.
10.		How much will my reduction be ? As explained in question 2 and 3, your reduction is based on a number of factors. For the year 2004, the best reduced EI rate available to an employer with an acceptable weekly indemnity plan is 1.248. This reduced rate generates a savings of $.30 per $100.00 of employee insurable earnings. Because the maximum insurable earnings per employee per year is $39,000.00 for the year 2004, the maximum savings per employee per year is $117.37. You may access the reduced EI premium rates for the current year.
11.		Can I receive a retroactive reduction ? No, the effective date of a reduction is based on the application date. You may ask that your application be 'antedated' if you can demonstrate that you had good cause for not applying earlier.
12.		How will I receive my reduction ? If we determine that you meet all the requirements and qualify for a reduction, you will be notified in writing. This letter will indicate the reduced rate you should use for the entire year to calculate your employer EI premiums. Your reduction is a direct result of this calculation.
13.		What if I don't qualify? If you do not qualify, we will inform you of the modifications that have to be made. If you choose to make these modifications and submit them to us, we will assess them to determine if they meet the requirements. If you do not make the modifications, we will send you a notice of non-entitlement.
14.		What if I don't agree with the decision made on my application ? You may appeal any decision to the Commission by sending us a letter , giving the reasons for your appeal. Your letter must be sent within one year of the date on our notice of decision.
15.		How will the reduction affect the administration of my payroll? Because the reduced rate must be applied to remittances made throughout the entire calendar year, once you receive notification of your reduced rate, you will have to recalculate the employer EI premiums already paid retroactive to January 1, based on your new rate. Then, when you make the next remittance of source deductions, make the necessary financial adjustments by remitting the amount owed for the period less the amount you calculated as being an overpayment due to your new rate. If you have some employees not covered by your plan, this also affects the administration of your payroll. Please refer to question 8 above.
16.		What must I do to retain my reduction ? Please refer to Part III, item 1 of the Program Guide.
17.		What if I want to cover a new group of employees under a plan ? You should contact us immediately. You will be asked to provide proof of short-term disability coverage for these employees and also information regarding how these employees will receive their portion of the reduction savings as explained in question 9 above.
18.		a) What if I make changes to my plan or cancel it? b) What if I change my address or payroll deductions account ? c) What if there is an ownership change or a change to the organizational structure ? Please refer to Part II, item 5 of the Program Guide.