Equation for Expenditures (net of MPA)

The expenditures (net of MPA) are equal to the premium revenue.

The premium revenue is equal to the sum of the employer premiums paid on behalf of salaried employees, adjusted for overall employer premium reduction due to qualified wage-loss plans and to the small business job credit, of the salaried employee premiums deducted at source adjusted for employee refunds, and of the employee premiums for self-employed.

The employer premiums paid on behalf of salaried employees, adjusted for the overall employer premium reduction due to qualified wage-loss plans and due to the small business job credit are calculated as: 1.4 multiplied by the base rate and the total insurable earnings for salaried employees prior to adjustments for employee premium refunds (referred to as TIE), minus the reduction in employer premiums due to qualified wage-loss plans and to the small business job credit.

The salaried employee premiums deducted at source adjusted for employee refunds are calculated as: the product of the base rate, the TIE, and (1 minus the adjustment to reflect employee premium refunds, which is expressed as a percentage of TIE).

The employee premiums for self-employed are calculated by multiplying the base rate by the total self-employed earnings for individuals who opted into the EI program.

The resulting base rate is equal to the ratio of the sum of the expenditures (net of MPA) and the reduction in employer premiums due to qualified wage-loss plans and to the small business job credit to the earnings base of residents of all provinces.

The earnings base of residents of all provinces is developed as follows:

1.4 times the TIE, plus the TIE times (1 minus the adjustment to reflect employee premium refunds which is expressed as a percentage of TIE), plus the total self-employed earnings for individuals who opted into the EI program.

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