In payroll compliance, insurable earnings are used to calculate premiums for which program?

In payroll compliance, insurable earnings are used to calculate premiums for which program?

• A. Employment Insurance
• B. Quebec Pension Plan
• C. Canada Pension Plan
• D. Ontario Health Insurance

Answer: (A)

Insurable earnings are the portion of an employee’s earnings used to calculate Employment Insurance premiums. In Canada, EI premiums are deducted on insurable earnings up to the annual maximum insurable amount, with separate rates for the employee and the employer. The Canada Pension Plan (and the Quebec Pension Plan) uses pensionable earnings to determine CPP/QPP contributions, not insurable earnings, and Ontario Health Insurance is funded through taxes rather than payroll premiums tied to insurable earnings. So the program that uses insurable earnings to calculate premiums is Employment Insurance.

Insurable earnings are the portion of an employee’s earnings used to calculate Employment Insurance premiums. In Canada, EI premiums are deducted on insurable earnings up to the annual maximum insurable amount, with separate rates for the employee and the employer. The Canada Pension Plan (and the Quebec Pension Plan) uses pensionable earnings to determine CPP/QPP contributions, not insurable earnings, and Ontario Health Insurance is funded through taxes rather than payroll premiums tied to insurable earnings. So the program that uses insurable earnings to calculate premiums is Employment Insurance.