Employment Insurance (EI) formula to calculate insurable earnings of teachers working on contract - 27 week record of employment
Why a formula?
Teaching contract 27 weeks or shorter
Comments on the Record of Employment (ROE)
How to use the formula?
Why a formula?
The formula is a way to calculate the daily average insurable earnings for teachers with a contract duration longer than 27 weeks. This is needed to complete the total insurable earnings in Block 15B on the 27 week Record of Employment (ROE).
For the purpose of calculating the benefit rate, the employer must report on the ROE the total insurable earnings of the last 27 weeks in Block 15B. 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 the 53 week ROE Web version, refer to the formula for the 53 week Record of Employment.
topTeaching contract 27 weeks or shorter
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.
topComments 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".
topHow to use the formula?
The following examples illustrate the use of the daily averaging formula when a contract duration is longer than 27 weeks. One week is equivalent to 7 calendar days. A period of 27 weeks is equivalent to 189 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.
The total insurable earnings to be reported in Block 15B on the ROE is the daily average earnings multiplied by the number of calendar days within the 27 weeks or 189 days.
See example. We have used rounded figures to simplify the calculations.
One year contract
- Period of the contract: September 1, 2004 to August 31, 2005
- 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 total insurable earnings to be reported on the ROE in Block 15B is $18,144, i.e. $96 X 189 days.
It might be necessary to combine the average insurable earnings of 2 contracts on the same ROE in order to obtain the total insurable earnings for the last 27 weeks. In that situation, you must consider the number of days within the current contract and add a sufficient number of days from the preceding contract to reach 189 days or 27 weeks.
See example:
Two contracts, one Record of Employment
- Contract 1: from September 1, 2004 to August 31, 2005
- Salary for the duration of the contract: $35,000
- Total calendar days in the contract: 365
- Calculation of the daily average earnings: $35,000 ÷ 365 days = $96
- Contract 2 — current: from September 1, 2005 to August 31, 2006
- Salary for the duration of the contract: $40,000
- Total calendar days in the contract: 365
- Calculation of the daily average earnings: $40,000 ÷ 365 days = $110
The teacher has an interruption of earnings on January 13, 2006 — last day paid — due to maternity leave.
A ROE must be completed with January 13, 2006 as the last day paid and the 2 contracts must be considered for a total of 189 days or 27 weeks to complete Block 15B.
The following calculation must be done:
- Contract 2 : 135 days counting back from the last day paid, January 13, 2006 to September 1, 2005. The insurable earnings for that period equal $14,850, i.e. 135 days X $110.
- Contract 1: 54 days, i.e. 189 - 135 days, counting back from August 31, 2005 to July 9, 2005. The insurable earnings for that period equal $5,184, i.e. 54 days X $96.
The total insurable earnings to be reported in Block 15B on the ROE are $20,034, resulting from the calculation formula for the 2 contracts: $14,850 for the 2nd contract and $5,184 for the 1st contract.
For more information on the averaging formula, please call the Insurance Telephone Information Service or contact your Service Canada Centre.
