What term describes the upper limit on earnings used to calculate EI premiums?

What term describes the upper limit on earnings used to calculate EI premiums?

• A. Insurable earnings floor
• B. Maximum insurable earnings
• C. EI cap
• D. Premium base

Answer: (B)

The upper limit used to calculate EI premiums is called Maximum Insurable Earnings. EI premiums are calculated only on insurable earnings up to this cap each year, so any earnings above that amount aren’t subject to EI premiums. For example, if the cap is set at 66,000 and the employee EI rate is 1.63%, the maximum employee contribution is 1.63% of 66,000; earnings beyond 66,000 don’t increase the premium. While people sometimes refer to it as an “EI cap,” the precise term used in official guidance is Maximum Insurable Earnings.

The upper limit used to calculate EI premiums is called Maximum Insurable Earnings. EI premiums are calculated only on insurable earnings up to this cap each year, so any earnings above that amount aren’t subject to EI premiums. For example, if the cap is set at 66,000 and the employee EI rate is 1.63%, the maximum employee contribution is 1.63% of 66,000; earnings beyond 66,000 don’t increase the premium. While people sometimes refer to it as an “EI cap,” the precise term used in official guidance is Maximum Insurable Earnings.