Your 2027 EI bill is set. For your staff it is pennies, and your own line may not belong there at all

Next year's Employment Insurance numbers landed on 14 September, and the headline is the least useful part of them. The rate moved a single cent. The earnings ceiling moved $1,900. For a small team that adds up to roughly the price of one decent dinner across the whole year. The line genuinely worth five minutes is the one with your own name on it, because if you control more than 40 percent of the voting shares of your own company, the Act says that employment was never insurable, and the premiums coming off it are buying you nothing at all.

The 2027 numbers, straight

From 1 January 2027:

• Your employees pay $1.64 per $100 of insurable earnings, up from $1.63.
• You pay $2.30 per $100, which is 1.4 times the employee rate, up from $2.28.
• The earnings ceiling rises from $68,900 to $70,800.
• The most any one employee pays all year is $1,161.12, up $38.05.
• The most you pay for any one employee is $1,625.57, up $53.27.

Quebec runs its own parental insurance plan, so Quebec rates are lower and went the other way: $1.29 employee and $1.81 employer, both a cent below 2026.

One practical note. CRA's own rates and maximums table still stops at 2026. The Commission's announcement is the source until CRA catches up, so if your bookkeeper says the 2027 figures are not out yet, they are reading the wrong page.

The rise is in the ceiling, not the rate

This is the bit the coverage keeps getting the wrong way round.

An extra two cents per $100 on the employer side is $0.20 per $1,000 of pay. Run it on a real person. A part-timer on $35,000 of insurable earnings costs you $798.00 in employer EI this year and $805.00 next year. Seven dollars.

Six people at that level: $42 a year for the whole team. That is not a cost increase, it is a rounding error, and any supplier who tells you they are raising prices because of EI is telling you a story.

The real movement is at the top. The ceiling went from $63,200 in 2024 to $70,800 in 2027, about 12 percent in three years, while the employee rate went from $1.66 to $1.64 to $1.63 and now back to $1.64. So the extra money comes out of one group only: the people you pay more than the ceiling. In most owner-operated businesses that is a short list, and you are usually on it.

Now the line with your name on it

If you are incorporated and pay yourself a salary, stop here and check one thing.

The Employment Insurance Act, at paragraph 5(2)(b), excludes from insurable employment "the employment of a person by a corporation if the person controls more than 40% of the voting shares of the corporation". CRA says the same in plain words on its own insurability page.

Not a relief you claim. Not an election you file. An exclusion written into the Act.

Nothing in your payroll software knows who holds the voting shares. It deducts what you told it to deduct when the line was set up, usually years ago, usually by whoever set up the first pay run.

So price the mistake. An owner paying themselves at or above the ceiling in 2027:

• Employee premiums: $1,161.12
• Employer premiums: $1,625.57
• Total: $2,786.69 a year

On a $60,000 salary it is $984.00 plus $1,380.00, so $2,364.00.

Both halves are your money. And the person that money is insuring cannot claim regular EI benefits, because the employment is not insurable. You are paying a premium on a policy that will not pay out.

What "more than 40 percent" actually means

Three things people get wrong.

It is voting shares, not value. Control of the votes decides it, not what percentage of the company's worth you hold. Non-voting or preferred shares do not count toward the test.

Two owners at fifty fifty are both excluded. CRA's own worked example is exactly this: two people each holding 50 percent, and neither one has insurable employment. Equal partners often assume the rule is aimed at sole owners. It is not.

CPP is not the same question. The 40 percent rule sits on CRA's list of what is excluded from insurable employment. It is not on the list for pensionable employment. Do not touch your CPP line while you are fixing your EI line, and remember the base CPP rate is being cut on the same date, which is a separate change you also need in the January pay run.

If you hold 40 percent or less, you may still be outside EI, but it stops being automatic and becomes a question of fact. That one is decided by asking CRA for a ruling.

If you have been paying it, ask for it back

Overpaid premiums are refundable. The employer applies on form PD24, Application for a Refund of Overdeducted CPP Contributions or EI Premiums.

The limit is in subsection 96(10) of the Act: a refund "is payable only if an application is made in writing to the Minister within three years after the end of the year for which the premiums were deducted or required to be paid".

Read that as dates rather than as law.

• A 2023 overpayment has to be applied for by 31 December 2026. After that it is gone.
• 2024 and 2025 stay open into 2027 and 2028 respectively.
• The year you are standing in gets fixed on the payroll, not by a refund claim.

Nobody is going to write and tell you. CRA checks that employers have deducted enough. It does not go looking for the ones deducting too much.

The family payroll question, which cuts both ways

If your spouse, your child or your parent is on the payroll, this gets more interesting and a good deal less comfortable.

Paragraph 5(2)(i) excludes "employment if the employer and employee are not dealing with each other at arm's length", and related people are treated as not at arm's length. Subsection 5(3)(b) then puts the decision with the Minister of National Revenue, who can deem the employment to be at arm's length after looking at "the remuneration paid, the terms and conditions, the duration and the nature and importance of the work performed", and asking whether a substantially similar contract would have been made with a stranger.

Which means employing family is not automatically insurable and not automatically excluded. It is a judgement about whether the deal looks real.

The trap has two ends, and both are expensive.

If the employment is ruled not insurable, you have been paying premiums for years that bought no cover. If you assume it is not insurable and stop deducting, and CRA later decides it was insurable, you owe the arrears. And the worst version is the one where nobody asks until your daughter files a claim after a bad quarter and finds out at that moment that the answer is no.

A ruling settles it in advance, and there is a deadline attached. Subsection 90(2): a request from anyone other than the Commission "must be made before the June 30 following the year to which the question relates". So the door on 2026 closes on 30 June 2027.

What replaces the cover, if you decide to stop paying

Do not just take the saving and forget the question, because something was being insured, even if badly.

If you control more than 40 percent of the voting shares you count as self-employed for EI, and you can register for the self-employed measure that covers the six special benefits: maternity, parental, sickness, compassionate care and the two family caregiver benefits. Regular EI, the kind you claim when work dries up, is not part of it.

Two things make the arithmetic different from your payroll line.

You pay the employee rate only. In 2026 that is $1.63 per $100, capped at $1,123.07. There is no 1.4 times employer portion on top, which is the whole $1,625.57 gone.

It is a one-way door. Canada.ca is blunt about it: once you have received benefits through the programme, you "must continue paying EI premiums for the duration of your self-employment and will not be able to withdraw from the program". The maximum weekly benefit is $749 in 2027.

For a lot of owners the honest answer is to stay out and build the cash buffer instead. For an owner who is planning a family, or who has no private disability cover and no partner's income behind them, the special benefits programme is cheap for what it does. Either answer is defensible. Drifting into it because a payroll setting was never questioned is not.

What this looks like from the other side of a sale

Two reasons a buyer cares about a line this small.

The first is arithmetic. A cost you do not owe is pure profit once it stops, and profit is what gets multiplied. Take $2,786.69 off your annual costs and at a three times multiple you have moved the price of the business by roughly $8,400, for the price of one letter. That is the cheapest margin work available to you this quarter.

The second is what it signals. Payroll is one of the first places a buyer's accountant goes, because it is high volume, it repeats monthly, and errors there tend to be structural rather than one-off. An owner insured against a risk the Act says they cannot claim for is a small finding that invites bigger questions. Clean it up, keep the ruling letter and the PD24 in the file, and it becomes a non-event. Our guide on clean books covers the rest of that habit.

And there is a quieter version of the same point. If you are outside EI and the business cannot run for a month without you, there is no safety net anywhere in the picture. That is not a payroll problem, it is owner dependence, and it is the thing buyers discount hardest.