Employment Insurance (EI) formula to calculate insurable earnings of teachers working on contract - 53 week record of employment on the web (ROE Web)
Why a formula?
Teaching contract 27 weeks or shorter
Comments on the Record of Employment (ROE)
How to use the formula?
The formula is a way to calculate the daily average insurable earnings for teachers with contract duration longer than 27 weeks. This is needed to complete the insurable earnings by pay period in Block 15C on the 53 week ROE Web.
For the purpose of calculating the benefit rate, the employer will report on the ROE the insurable earnings of the last 53 weeks — or less — in Block 15C. With the formula, the insurable earnings are allocated proportionately over the term of the contract, regardless of the basis on which they are paid.
If you are completing a 27 week ROE, refer to the formula for the 27 week ROE.
It is not necessary to do any averaging of the earnings when the duration of the contract is 27 weeks or shorter. All the earnings have to be reported on the ROE.
Comments on the Record of Employment (ROE)
ROE completed for a teacher with a contract duration longer than 27 weeks must show in the Comments section — Block 18 — "Averaging formula".
How to use the formula?
The following examples illustrate the use of the daily averaging formula when a contract duration is longer than 27 weeks. Using the formula, the insurable earnings by pay period in Block 15C will be completed on a weekly basis. One week is equivalent to 7 calendar days.
The daily average earnings are obtained by dividing the total earnings for the contract period by the total number of calendar days within the contract period.
See example. We have used rounded figures in all the examples to simplify the calculations.
- Period of the contract: September 1, 2005 to August 31, 2006
- Salary for the duration of the contract: $35,000
- Total calendar days in the contract: 365 days
- Calculation of the daily average earnings: $35,000 ÷ 365 days = $96
The teacher has an interruption of earnings on August 31, 2006 – last day paid.
For Block 15C, the following calculations must be done:
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The number of calendar days counting back from August 31, 2006 to September 1, 2005: 365.
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The number of full calendar weeks: 365 ÷ 7 days = 52.
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The number of days remaining: 365 – 364, i.e. 52 X 7 = 1.
Since the averaging formula is used, Block 15C is completed with the weekly insurable earnings, starting with the full calendar weeks as follows:
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Block 15C PP1 through PP52 will each show: $672 — i.e. $96 X 7, and
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Block 15C PP53 will show: $96 — i.e. $96 X 1.
The total insurable earnings to be reported in Block 15B for the last 27 weeks is $18,144, i.e. the sum of the entries in PP1 through PP27: $672 X 27 weeks — the completion of Block 15B did not change with the 53 week ROE Web.
See another example where the interruption of earnings occurs before the end of the contract.
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Period of the contract: September 1, 2005 to August 31, 2006
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Salary for the duration of the contract: $45,000
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Total calendar days in the contract: 365 days
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Calculation of the daily average earnings: $45,000 ÷ 365 days = $123
The teacher has an interruption of earnings on June 6, 2006 — last day paid —due to maternity leave.
For Block 15C, the following calculations must be done:
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The number of calendar days counting back from June 6, 2006 to September 1, 2005: 279.
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The number of full calendar weeks: 279 ÷ 7 days = 39.
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The number of days remaining: 279 – 273, 39 X 7 = 6.
Since the averaging formula is used, Block 15C is completed with the weekly insurable earnings, starting with the full calendar weeks as follows:
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Block 15C PP1 to PP39 will each show: $861 — i.e $123 X 7, and
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Block 15C PP40 will show: $738 — i.e. $123 X 6.
The total insurable earnings to be reported in Block 15B for the last 27 weeks is $23,247, i.e. the sum of PP1 to PP27 $861 X 27 weeks — the completion of Block 15B did not change with the 53 week ROE Web.
It might be necessary to combine the average insurable earnings of 2 contracts on the same ROE in order to complete Block 15C with the last 53 weeks — or less. In that situation, you must determine the daily average for each contract separately.
See example:
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Contract 1: from September 1, 2004 to August 31, 2005
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Salary for the duration of the contract: $40,000
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Total calendar days in the contract: 365
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Calculation of the daily average earnings: $40,000 ÷ 365 days = $110
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Contract 2 — current: from September 1, 2005 to August 31, 2006
- Salary for the duration of the contract: $45,000
- Total calendar days in the contract: 365
- Calculation of the daily average earnings: $45,000 ÷ 365 days = $123
The teacher has an interruption of earnings on January 13, 2006 — last day paid — due to maternity leave.
For Block 15C, the following calculation must be done:
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The number of calendar days in contract 2 counting back from January 13, 2006 to September 1, 2005: 135
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The number of full calendar weeks in contract 2: 135 ÷ 7 days = 19
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The number of days remaining in contract 2: 135 – 133, i.e. 19 weeks X 7 days = 2 days.
Since an averaging formula is used, Block 15C is completed with the weekly insurable earnings starting with the full calendar weeks from contract 2 and continuing with contract 1 as follows:
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Block 15C PP1 through PP19 will each show $861 — i.e. $123 X 7 days, and
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Block 15C PP20 will show $796 — i.e. $123 x 2 days plus $110 X 5 days, and
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Block 15C PP21 through PP53 will each show $770 — i.e. $110 X 7 days.
The total insurable earnings to be reported in Block 15B for the last 27 weeks is $22,545, i.e. the sum of PP1 to PP27 — the completion of Block 15B did not change with the 53 week ROE Web.
For more information on the averaging formula, please call the Insurance Telephone Information Service or contact your Service Canada Centre.
