Employment Insurance (EI) for Self-Employed Persons

Key Takeaways

Employment Insurance (EI) benefits include maternity, parental, sickness, and caregiving support.

There are five types of EI benefits available to the self-employed: Maternity and parental benefits, sickness benefits, family caregiver benefits for adults, family caregiver benefits for children, and companionate care benefits.

As a self-employed individual you are only responsible for the payment of the employee portion of the premium.

The individual can still register for the EI self-employed program even if they are also employed as an employee.

Self-employed Canadians have the option to register for Employment Insurance (EI) special benefits, providing a crucial safety net. These benefits include maternity, parental, sickness, and caregiving support, offering up to 55% of the individual’s earnings, with a maximum weekly amount of $668 (2024). By opting into this program, self-employed Canadians can ensure they have access to financial assistance when they need to take time away from their business to care for themselves or their loved ones. It is important to note that EI regular benefits which are benefits for individuals who lose their jobs through no fault of their own, is not available through this program.

There are five type of EI benefits available to the self-employed:

EI maternity and parental benefits: EI maternity and parental benefits provides financial assistance to individuals who are either pregnant or have recently given birth and are away from work. EI parental benefits are available to the spouse who is taking time off from work to care for a newborn baby or a newly adopted child.

EI sickness benefit: This benefit is available to individuals who are unable to work due to a medical condition. The individual must obtain a medical certificate from a certified medical practitioner stating that the individual is unable to work and for approximately how long. Medical reasons include illness, injury, quarantine or any medical condition that prevents you from working.

EI caregiver benefits: EI caregiving benefits provide financial assistance to an individual who is away from work to care for or support a critically ill or injured person or someone needing end-of-life care. There are three sub-categories under this benefit:

Family caregiver benefit for children: Individuals who provide care to or support a critically ill or injured person under 18.

Family caregiver benefit for adults: Individuals who provide care to or support a critically ill or injured person 18 or over.

Compassionate care: Individuals who provide care or support to a person who requires end‑of‑life care.

Before applying for self-employed Employment Insurance benefits, the individual must satisfy the minimum income requirements for the program. For example, to be eligible for benefits in the 2024 tax year (January 1, 2024 and December 31, 2024), you need to have made at least $8,492 in net self-employed earnings in 2023.

Other eligibility requirements are:

You must be a Canadian citizen or a permanent resident.

You need to have been enrolled in the self-employed program for a minimum of 12 months.

You should have reduced your business activity by over 40% for at least one week.

Registering for the self-employed program is relatively simple:

Register for My Service Canada Account (MSCA) using your GCKey, provincial ID number, or online banking partner.

Log in to MSCA and apply for the program and click on the “Employment Insurance” button.

Submit supporting documentation.

Pay EI premiums

The premiums are based on self-employed income for the entire calendar year, starting the year of registration. Once you register for self-employed EI, you will need to pay the premiums for as long as you remain self-employed. The EI premiums are calculated on Schedule 13 of the income tax return - Employment Insurance Premiums on Self-Employment and Other Eligible Earnings. The EI premiums are reported on line 31217 and line 42120 of your return and the premiums are deducted from your refund or added to your tax payable. As a self-employed individual you are only responsible for the payment of the employee portion of the premium.

The individual can still register for the EI self-employed program even if they are also employed as an employee. In such event, the insurable earnings can be combined o increase the benefit rate. The maximum benefit weeks and amounts will still remain the same.

You can withdraw from the program at any time, unless you have received special benefits as a self-employed person. If you have, you’ll continue paying premiums for as long as you’re self-employed (source: Canada.ca).

For further information please contact Taxtron Support at 416-491-0333 or visit www.taxtron.ca