COVID-19: Supplemental Unemployment Benefit Plans

Susan Hodkinson, Amanda Dimitry
| 3/21/2020
Supplemental Unemployment Benefit Plan

What is a SUB plan?

A Registered SUB (Supplemental Unemployment Benefit) plan is option for employers that benefits both employers and employees alike. It allows employers to continue to support employees while the burden of the bulk of their income is carried by Employment Insurance (EI). Registered SUB Plans can be implemented for temporary stoppage of work, training, or illness, injury or quarantine.

Benefits for employers

  • A SUB Plan It allows for a longer layoff (Up to 35 weeks within a 52-week period). If layoff exceeds the 35 weeks, termination pay would be required.
  • Reduces employee turn over, employees who are still receiving an income, are less likely to seek other employment.
  • Allows employers to still support their employees while allowing EI to carry 55% of their salary up to $54,200.

Benefits for employees

  • While an individual is receiving EI benefits, any income earned reduces from EI benefits received except when the benefits are received through a registered SUB Plan.
  • Employees can more comfortably wait for their employer, therefore not have to look for other employment.
  • Can afford to pay bills, and support their families, which would help physical and mental health, to allow for a healthy work force when called back to work.
  • Continued engagement and trust in their employer, which would reduce turnover, and the cost of hiring and training new staff. It makes employees feel like “we are in this together.”

Things to consider

  • How much will employees receive from EI? And for how long.
  • How long can my organization afford to support laid off employees?
  • How much will it cost to continue to support laid off employees?

EI Benefits summary

There are two factors for understanding how much an employee can receive from EI.

  1. How much an employee will receive?
  2. How long will the employee receive this benefit?

How much an employee will receive?

Service Canada will conduct a calculation and assessment of the employee’s earnings. The calculation uses the employee best earning weeks to dictate the benefit they will receive. The number of weeks used for the calculation is based on the economic region. 

In general, an employee can receive up to 55% of their earnings to a maximum of $573 per week. This maximum is based on the insurable earnings of $54,200.

Math breakdown:

$54200 * 55% /52 (weeks per year) = $573 per week

How long will the employee receive this benefit?

Employees can receive the benefit for 14 weeks up to 45 weeks. The duration of the benefit depends on the unemployment rate in your region.

How much will it cost?

A few scenarios below based on an employee earning multiple earnings, and top ups ranging from 50% to 70%.

Examples of salaries and top ups:

Annual Earnings

Weekly Earnings


EI per week (max 573)

Top up to 50%

Cost Per Week

Top up to 60%

Cost Per Week

Top up to 70%

Cost Per Week

$ 40,000

$ 769


$ 423



$ 462

$ 38

$ 538

$ 115

$ 50,000

$ 962


$ 529



$ 577

$ 48

$ 673

$ 144

$ 60,000

$ 1,154


$ 573

$ 577

$ 4

$ 692

$ 119

$ 808

$ 235

$ 70,000

$ 1,346


$ 573

$ 673

$ 100

$ 808

$ 235

$ 942

$ 369

$ 80,000

$ 1,538


$ 573

$ 769

$ 196

$ 923

$ 350


$ 504


Topping up a $50,000 employee to 60% of their earnings for 1 week would cost $48 per week. If topped up for 20 weeks, the employee would receive in total from their employer $960.

How do you create and register a SUB Plan?

To register for this program is very simple process, employers must complete a registration form and create a plan, and fax or mail it to Service Canada.

Step 1 – Register by downloading and completing the Service Canada form found here.

Step 2 – Draft your plan. We have created a template to get you started. Click here to access it. 

Aspects of plan to consider:

  • Who is covered?

    All employees?
    All employees with 1 year of service?
    All employees with 5 years of service?
    Only specific levels of employees?

  • How much will be topped up during the waiting period?

    The employee will be receiving any benefits during the waiting period
    Can be the same as the general top up, but the cost is higher as the employee is not receiving any benefit

  • How much will be topped up after the waiting period?

    Keep in mind that if the bulk of your workforce makes $54,000 and below, the cost will be minimal.
    The cost increases greatly for higher paid employees.

  • How long will the benefit be paid to employees?

    Any length of time would be appreciated by employees.
    Keep in mind that after 35 weeks within a 52 week period employee will need to be terminated, and paid out lieu of notice if applicable.

  • Duration of the plan

    These plans can be in place for maximum 5 years.
    SUB plans can be modified at any time by informing Service Canada in writing.

Please Note: Multiple plans and registrations forms would need to be completed if employees are on multiple payrolls under different business numbers.

Step 3 - Once the registration form and plan is complete mail or fax all documents to Service Canada.

Mail: Service Canada, SUB Program, PO Box 11000, Bathurst NB E2A 4T5

Courier: Service Canada, SUB Program , 120 Harbourview Blvd., Bathurst NB E2A 7R2

Fax: 506-548-7473

How Can Crowe Soberman Support You?

In these uncertain times, it is essential to remain agile and proactive as the COVID-19 situation unfolds. Having timely access to financial experts, insights and news as quickly as possible is critical—and that’s where we can help.

We have established a dedicated COVID-19 Resource Hub, highlighting areas of business operations that will likely be impacted by coronavirus. Whether you need to discuss your current financial situation and learn what options are available to you, or you want to be guided through the appropriate cash flow management strategies for your business, our team of experts are ready to help you at every step of the way. Please do not hesitate to reach out to your Crowe Soberman professionals for support during these challenging times.

We are in this together.

This article has been prepared for the general information of our clients. Specific professional advice should be obtained prior to the implementation of any suggestion contained in this article. Please note that this publication should not be considered a substitute for personalized tax advice related to your particular situation.

Download the SUB Plan template here.

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Susan Hodkinson
Susan Hodkinson
Chief Operating Officer & Partner, HR Consulting Practice