It is often misunderstood whether EI is a loan that needs to be paid back.
In short, there could be some cases where you need to pay back EI.
This usually happens if you received more benefits than the amounts you were entitled to.
At the time you file your income tax return, if your overall income in 2024 is over $79,000, you’ll have to repay 30% of the lesser of:
- the excess difference in your net income over $79,000, or
- the total regular benefits paid in the taxation year
There are some exemptions.
For example, you won’t have to repay your EI benefits if:
- your net income in 2024 is less than $79,000, or
- in the last 10 taxation years, you received less than 1 week of regular or fishing benefits
- you were paid special benefits (this includes maternity, parental, sickness, compassionate care or family caregiver benefits).
If within the same taxation year you received a combination of regular and special benefit, you may still be required to repay a percentage of EI.
You’ll find how much you need to repay in the “Other Information” section of your T4E slip.
Repayment Requirements and Conditions
To qualify for Employment Insurance (EI) benefits, you must satisfy the repayment requirements and conditions.
One crucial condition is that you must have contributed to the EI program through your employment earnings.
It is also essential that you have lost your job through no fault of your own and that you are actively seeking new employment.
The number of hours you have worked in recent weeks or months, based on your location and the specific circumstances of your job loss, will determine your eligibility.
The repayment obligations may differ depending on the cause of your job separation.
If you voluntarily resign without a legitimate reason, you may be obligated to reimburse any benefits you have received.
If you were terminated due to misconduct, you may not be eligible for EI benefits.
Likewise, if you turn down suitable employment opportunities without a valid justification, you may be required to repay any benefits you have received.
The repayment requirements and conditions for Employment Insurance are designed to ensure that the program aids individuals in need while preserving its sustainability for future generations.
Instances When Repayment May Be Required
When it comes to Employment Insurance, repayment may be required if individuals receive more benefits than entitled to or fail to meet certain conditions.
One instance when repayment may be required is inaccurate income reporting or failure to report changes in employment status.
This can result in overpayment and the need to repay the excess amount.
Another instance is failure to fulfill obligations while receiving Employment Insurance benefits.
For example, refusing suitable employment without a valid reason may require repayment of received benefits.
Repayment may also be required if individuals receive benefits while ineligible.
This can occur if they do not meet necessary criteria for Employment
Insurance or if circumstances change and they are no longer eligible.
By promptly reporting any changes, individuals can ensure the correct amount of benefits are being received and thus avoid the need for repayment.
Frequently Asked Questions
- Do you have to pay back Employment Insurance (EI) benefits?
- How is the repayment amount calculated for EI benefits?
The repayment amount is typically 30% of the lesser of your net income above a certain threshold or the total amount of regular EI benefits received.
- Are special EI benefits subject to repayment?
No, special EI benefits such as sickness, maternity, paternity, or caregiving benefits are not subject to repayment.
- How can I access my EI tax slip (T4E)?
If your T4E doesn’t arrive by mail, you can access a soft copy by logging into your My Service Canada account.
- Should I include my EI benefits on my tax return?
Yes, EI benefits are taxable as income, and you should include your EI tax slip (T4E) with your tax return.
- What should I do if I owe taxes on my EI benefits?
If your EI benefits did not deduct enough income taxes at source and you owe taxes, you may need to pay additional tax to the Canada Revenue Agency (CRA) based on your marginal tax rate. It’s recommended to consult a tax advisor for guidance on how to handle this situation.