On September 11, 2014, the Minister of Finance Joe Oliver announced a new Small Business Job Credit that will cut the Employment Insurance (EI) premiums small businesses have to pay over the next two years.
The Small Business Job Credit will lower the EI premiums eligible small businesses have to pay from the current rate of $1.88 to $1.60 per $100 of insurable earnings in 2015 and 2016. This will reduce the eligible businesses EI payroll taxes by 15%.
The bad news is that no relief has been granted to the employees and they will continue paying the $1.88 rate.
The reduced rate will only be available to small businesses whose employer paid EI premiums are equal to or less than $15,000 in 2015 and 2016. The government estimates that nearly 90% of all EI premium-paying businesses in Canada will receive this credit.
In addition, the Canada Revenue Agency will automatically calculate the credit on the businesses return, so it doesn’t appear that business will have to apply or prepare any additional paperwork to claim this credit.
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