EI Premium Reduction Program – What You Need to Know

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With the Government of Canada’s Employment Insurance (EI) Premium Reduction Program, you can both increase your bottom line and improve employee welfare.

In addition to protecting unemployed individuals, Service Canada’s Employment Insurance program provides benefits to employees who face various life challenges and changes including illness, injury, or the joyous arrival of a new family member. You can provide additional similar income-protection coverage to your employees through a short-term disability plan. A short-term disability plan can help employees avoid using EI all together or reduce the amount of time EI would be required. Service Canada recognizes employers who provide short-term disability plans by offering the EI Premium Reduction Program.

EI Premium Reduction Program

Having a short-term disability plan that meets certain requirements, should entitle you to pay your Employment Insurance (EI) premiums at a rate that’s lower than the standard employer rate of 1.4 times the employee’s EI premiums.

To be considered for a premium reduction, your short-term disability plan must:

  • Provide at least 15 weeks of benefits for short-term disability
  • Match or exceed the level of benefits provided under EI
  • Pay benefit to employees within 8 days of illness or injury
  • Be accessible to employees within 3 months of hiring, and
  • Cover employees on a 24-hour-a-day basis


Learn more about the EI Reduction Premium Program here.

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