
EI Premium Reduction Program
Last Update: July 22, 2025
Canada
Money for employers
At a glance
Eligible Funding
- No Condition
Timeline
- Open Date : September 22, 2020
Financing Type
Grant and Funding
Eligible Industries
- All industries
Funds Providers
Unspecified
Program status
Open
Overview
You could get a premium reduction in the short-term disability benefits you pay to your insured employees.
Financing terms and conditions
The EI Premium Reduction Program offers employers lower EI premium rates by providing short-term disability plans that qualify under specific conditions. This reduction aids in cost efficiency for employers while ensuring employee benefits.
- Employers can obtain reduced EI premium rates when employees are covered by a qualifying short-term disability plan.
- Rates of premium reduction are categorized based on the type of short-term disability plan provided and the duration it meets the program’s requirements.
- The reduction rate is expressed as a percentage of the employee's insurable earnings, impacting the employer's premium calculations.
- Employers must continue providing five-twelfths of the savings from the reduction to the employees covered by the plan.
- Reduced rates require the employer to wait for an entitlement decision from Service Canada before applying the new rate.
Activities funded
Examples of admissible projects:
$ 20,000
Implementing a short-term disability plan for a new software development startup
$ 20,000
Establishing a comprehensive short-term disability plan for employees at a non-profit organization
$ 20,500
Implementing a short-term disability plan at a social economy enterprise
$ 25,000
Introducing a short-term disability program at a financial cooperative
$ 25,000
Implementing a new short-term disability plan for employees at a local manufacturing company
$ 25,000
Introducing a new short-term disability plan for employees at a legal firm
Eligibility
Eligibility for the EI Premium Reduction Program requires that the employer-provided short-term disability plan meets specific criteria.
- The plan must provide at least 15 weeks of benefits for short-term disability.
- The benefits provided by the plan must match or exceed those offered under EI regulations.
- Benefits must be disbursed to employees within 8 days of illness or injury, with an elimination period not exceeding 7 consecutive days.
- Employees must have access to the plan within 3 months of their hiring date.
- The plan must cover employees on a 24-hour-a-day basis.
- The employer must provide evidence of commitment to the short-term disability plan.
- The employer must undertake to return five-twelfths of the savings from the premium reduction to employees covered by the plan.
Who is eligible?
Employers who have insured employees covered by a short-term disability plan may apply. Insured employees are those on whose behalf an employer remits EI premiums to the Canada Revenue Agency (CRA).
Selection criteria
The evaluation and selection criteria for the EI Premium Reduction Program are based on the short-term disability plan provided by the employer and whether it meets specific requirements. Employers must ensure their plans meet the minimum criteria to qualify for a premium reduction.
- 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 (the elimination period cannot exceed 7 consecutive days)
- Be accessible to employees within 3 months of hiring
- Cover employees on a 24-hour-a-day basis
How to apply
1
Verify Eligibility
Ensure your short-term disability plan meets all the basic requirements laid out in the program guide.
2
Prepare Required Documentation
- Prepare a copy of the short-term disability plan(s) you provide to employees.
- Gather any applicable collective agreement(s) related to employees covered by the plan.
- If available, prepare a written mutual agreement regarding the return of the employees' portion of the reduction.
3
Complete Application Form
- Access the application form for Employment Insurance Premium Reduction (NAS5022).
- Fill out the form with accurate details about your organization and the short-term disability plan.
4
Submit Application
- Submit the completed application form and all required documents to the Service Canada office handling EI Premium Reduction.
- Ensure any missing documentation is provided within 30 days if requested by Service Canada.
5
Await Decision
- Await written notification from Service Canada regarding the outcome of your application.
- If approved, receive the reduced EI premium rate and recalculate your payroll as necessary.
6
Address Any Issues
If not approved, carefully review the reasons provided and consider resubmitting with modifications, or appeal if necessary.
Additional information
Here are additional relevant details for this grant:
- The Premium Reduction Program requires employers to refund five-twelfths of the savings to the employees covered by their plan.
- Employers must maintain sufficient documentation proving the eligibility of their short-term disability plans and must be prepared to submit additional documentation upon request within 30 days.
- If granted a reduction, employers might need to adjust their financial calculations retroactively from January 1 of the calendar year in which the reduction applies.
- A written appeal can be submitted within one year if the employer disagrees with a non-entitlement decision.
- Employers must notify the program of changes to their short-term disability plan, address, payroll deductions account, ownership or organizational structure.
Frequently Asked Questions about the EI Premium Reduction Program Program
Here are answers to the most common questions about the EI Premium Reduction Program. This section explains what the program is, how much funding is available, eligibility requirements, application deadlines, and other important details to help you determine if this grant is right for your business.
What is the EI Premium Reduction Program?
How much funding can be received?
What is the deadline to apply?
Is the EI Premium Reduction Program a grant, loan, or tax credit?
Who are the financial supporters of the EI Premium Reduction Program?
Who is eligible for the EI Premium Reduction Program program?
Who can I contact for more information about the EI Premium Reduction Program?
Where is the EI Premium Reduction Program available?

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