The EI factor for new employees is calculating EI at 1.64 instead of 1.4.

Question

I have gone into adjust as per the instructions: Setup/Settings/Payroll/Taxes but it won't let me adjust the 1.64 to 1.4. The 1.64 is greyed out. Please advise.

dongwoo c · Accepted Answer

Hi lovedcreation23 , 
 The &ldquo;EI Factor for new employees&rdquo; is simply the default value that Sage 50 applies when you create a new employee record, and the correct EI factor should be 1.4 . 
 If the field is greyed out , it&rsquo;s because Sage 50 is not in Single User Mode , or there is an active window open such as a paycheque, payroll cheque run, or payroll ledger . To make changes, ensure you switch to Single User Mode and close any payroll-related windows. 
 Once that&rsquo;s done, you&rsquo;ll be able to edit the EI Factor under: Setup &rarr; Settings &rarr; Payroll Taxes . 
 Hope this helps clarify things!

C White · Answer

I think you have more than one problem here. 
 First, 1.64% was the employee EI rate for 2025. The 2026 rate is 1.63%. You need to check that you're using Sage 2026.1 as that is the one with the correct tax tables for paycheques dated in 2026. 
 Second, you are making a really common mistake when dealing with EI. You are confusing the employee's EI rate and the employer's EI factor for that employee. 
 - Employee's EI rate = the amount that will be deducted from the employee's paycheque = set by the federal government each year, cannot be changed. It will be 1.63% for all employees in Canada for all of 2026. 
 - Employer's EI factor = how the employer's EI 'matching payment' is calculated. For almost all employers, the 'matching payment' is 1.4x the employee's amount. This means that if the employee has $100 deducted from their paycheque, the employer will have a 'matching' payment of $140, making the amount owing to the Receiver General because of this employee $240. However, in some cases and for some employees, it's possible to reduce the $140 'matching' payment. An example would be if you offer a good short-term disability plan so your employees won't need to use EI sickness benefits - if you register the plan with the government, you'll get a note back saying 'your matching payments for employees on the plan can be reduced to (say) 1.2x'. 
 So, what you need to do next: 
 1. Make sure you're using the right version of Sage. 
 2. Unless you have registered your benefit plan with the government and gotten a 'reduced EI factor' letter back, make sure that the EI factor for all of your employees is set to 1.4.

Sage 50

The EI factor for new employees is calculating EI at 1.64 instead of 1.4.

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