Working while on claim in 2026: how earnings reduce your EI
Part-time work does not cancel EI. It reduces it, at a rate designed to leave you better off than staying home.
Updated on · Mottalib Radif · Editorial policy
The rule
For every dollar you earn in a week, your benefit is reduced by 50 cents, as long as your earnings stay at or below 90% of the weekly insurable earnings used to calculate your benefit. Every dollar above that 90% threshold reduces the benefit dollar for dollar. Once the benefit reaches zero, the week is not paid but not lost either: it remains available within your 52-week benefit period.
Example: previous earnings $1,000/week, benefit $550
| Weekly earnings | EI paid | Total income |
|---|---|---|
| $0 | $550 | $550 |
| $200 | $450 | $650 |
| $400 | $350 | $750 |
| $600 | $250 | $850 |
| $800 | $150 | $950 |
| $1,000 | $0 | $1,000 |
Earning $400 keeps you at $750 a week instead of $550. Earning $900 gives $1,000, the same as your old job, after which extra work brings nothing until the benefit is exhausted.
The table shows the design of the rule. Between zero and $900 of earnings, total income rises by 50 cents for every dollar earned, so working is always better than not working. At exactly 90% of the previous earnings, total income equals the previous earnings. Above that point, the benefit falls dollar for dollar and total income is flat until the benefit reaches zero at $1,000 of earnings, after which income is simply the wage. The threshold is based on the weekly insurable earnings used for the claim, not on the benefit; for a claimant at the maximum, whose insurable earnings were above the $1,325 ceiling, the 90% threshold is computed on the capped amount.
How the weeks are counted
Working While on Claim reduces the amount paid, not the number of weeks. A week in which a reduced benefit is paid counts as one week of entitlement, just like a full week. A week in which earnings reduce the benefit to zero is not paid and is not deducted from the entitlement. The benefit period, however, keeps running: 52 weeks from the start of the claim, whatever happens in between. A claimant with 30 weeks of entitlement who works part-time for six months will use those weeks more slowly in dollars but at the same pace in weeks, and may reach the end of the benefit period with weeks unused. Where the part-time work is substantial, it can be better to end the claim and reapply later on the new hours, which the weeks guide discusses.
What counts as earnings
Wages, commissions, tips, self-employment income, severance and vacation pay allocated to the week, some pension income. Not counted: RRSP withdrawals, investment income, CPP disability, workers’ compensation top-ups in some cases. Report gross amounts before deductions, in the week worked.
| Income | Earnings for EI? | Week it is allocated to |
|---|---|---|
| Wages and salary | Yes, gross | Week the work was done |
| Tips and gratuities | Yes | Week received |
| Commission | Yes | Week the transaction occurred, or spread if paid periodically |
| Self-employment net income | Yes, after operating expenses | Week the work was done |
| Vacation pay on separation | Yes | Weeks following the separation, at the normal weekly rate |
| Severance, termination pay, pay in lieu | Yes | Weeks following the separation |
| Bonus for work before the claim | Yes | Allocated to the period it relates to |
| Employer pension from the job you left | Yes, unless you requalified with new hours | Weeks it is paid for |
| CPP retirement pension | Yes | Weeks it is paid for |
| CPP disability, OAS | No | — |
| RRSP or TFSA withdrawals, investment income | No | — |
| Workers’ compensation (temporary total) | Yes, unless a top-up under an agreement | Weeks it is paid for |
| Rental income from property you do not actively manage | No | — |
Reporting correctly
- Every two weeks, complete the report online or by phone with the access code, answering for each of the two weeks: did you work, how many hours, gross earnings before deductions.
- Report the week the work was done, even if the pay arrives later; Service Canada compares with the employer’s records.
- Report hours as well as dollars: more than full-time hours in a week can make you unavailable for that week regardless of the pay.
- Declare self-employment income as net income after expenses, and be ready to show the calculation.
- If you make a mistake, correct it on the next report or by phone; a voluntary correction avoids the penalty.
Undeclared earnings are discovered through the automated matching of employer payroll records with EI claims, usually a year or two later. The consequences are an overpayment recovered from future benefits or through the CRA, a monetary penalty of up to 150% of the overpayment for knowingly false statements, and a violation that raises the hours required for your next claim by 25% to 100% depending on its seriousness. For the first violation the increase applies for five years.
Self-employment while on claim
Starting a business during a claim is permitted, with two tests. The earnings test above applies to the net income of the business each week. The availability test asks whether the business occupies so much of your time and capital that you are no longer available for work: Service Canada looks at the hours devoted to it, the investment, the financial success, the continuity of the activity and your intention to keep looking for a job. A business that is minor in extent, a few hours a week with small revenue, is compatible with benefits; one that becomes your principal occupation ends them. Provincial self-employment programs under Part II of the Act can allow you to keep benefits while launching a business full-time, on application before you start.
Refusing work
The rule assumes you accept suitable work when it is offered. Refusing a suitable job, or failing to look for one, can lead to a disqualification of seven to twelve weeks or the end of the claim. Suitable work is work in your usual occupation or a similar one, at comparable pay and conditions, within a reasonable commute, and, after a period on claim, work in a related occupation at somewhat lower pay. Part-time work is suitable if it does not prevent you from looking for full-time work. Accepting part-time work therefore protects the claim as well as topping up income.
Enter your previous weekly earnings in the calculator to get the base benefit, then apply the 50-cent rule to any earnings you expect.
