Self-Employed: Who Is Eligible to Register for EI?

Canada provides several programs designed to support citizens, permanent residents, workers, and students. One such initiative is Employment Insurance (EI), which also includes self-employed individuals as beneficiaries 

How Does Employment Insurance (EI) Work?

Canada’s Employment Insurance program offers a valuable safety net for workers. However, there is a common misconception that only salaried employees can benefit from this program.

Self-employed individuals can also register to access EI benefits. In this article, we explain the special EI benefits available for self-employed workers.

What Is Employment Insurance (EI)?

Employment Insurance (EI) is a Canadian government program that provides temporary income support to workers who are unemployed. This could be due to reasons such as unemployment, studying, illness or injury, pregnancy, or parental leave.

Workers are required to pay EI premiums and meet specific employment criteria. This raises several questions, such as:

• Can I receive EI only if I’m laid off?
• Can I receive EI if I’m self-employed?

As a self-employed worker, you can access special EI benefits after registering for the program, as explained below.

Who Can Register for EI?

EI for self-employed workers operates differently. Since self-employed income isn’t reported through regular pay stubs, EI premiums aren’t deducted at the source as they are for salaried employees. Instead, you must voluntarily register as self-employed with Service Canada under the EI Special Benefit for Self-Employed program.

To register, you need to have filed your income tax return for the previous year. Once registered, the EI premiums you pay will be calculated based on your declared self-employment income from your most recent tax return. 

Interestingly, if you earn both salaried income and self-employment income, both income sources will be covered under the program.

What Benefits Does EI Provide?

EI for self-employed individuals acts as a safety net against income fluctuations or unexpected events. Here are the primary situations where EI can replace lost income:

● Illness or Injury: If you're unable to work due to health reasons.

● Pregnancy and Parental Leave: For mothers and parents taking time off to care for a newborn or adopted child.

● Compassionate Care Benefits: For providing care to a critically ill family member.

● Agricultural Worker Benefits: Support for seasonal or agricultural workers.

● Income Loss Protection: Coverage for significant income

How to Register?

To register for EI as a self-employed worker, you must contact Service Canada voluntarily, either in person or online, and sign up for the EI Special Benefit for Self-Employed program..

After registering, you must wait 12 months from the registration date before being eligible to claim any benefits under this program.

It’s important to note that, as of now, the EI program for self-employed individuals is only available to those who are permanent residents (PR) or Canadian citizens

EI does not cover minor income drops. To qualify, you must demonstrate that your income has decreased by more than 40% due to time away from work for reasons such as injury, pregnancy, compassionate care, or other eligible circumstances.

Questions About EI for Self-Employed Individuals?
We recommend reviewing the official resources linked below or contacting Service Canada directly:

Employment Insurance – Special Benefits for Self-Employed Individuals

Other questions about your self-employed status?
Contact us at [email protected] or +1 778 319-4489

What Will Be Your Average Income as Self-Employed for 2023?

Please complete the questionnaire here so we can assess your tax situation as a self-employed individual.

_
About Real Tax

Real Tax specializes in accounting for small businesses, startups, and individuals. We assist Brazilian clients and individuals of other nationalities in Canada with income tax filing, business registration, payroll management, and more. Our bilingual team is ready to provide tailored solutions in both Portuguese and English.

Real Tax Canada – Accounting Solutions for Businesses in Canada
+1 778 319-4489 (WhatsApp)
[email protected]