Maternity leave in Canada brings joy — and a significant income reduction. Understanding your EI benefits, adjusting your budget, and making smart financial moves during this period sets you up for a strong return. This guide covers everything you need to know about managing money on maternity leave in Canada in 2025.
In Canada, maternity and parental benefits are paid through Employment Insurance (EI). Here is how the 2025 rates break down:
| Benefit Type | Duration | Rate | Max Weekly (approx.) |
|---|---|---|---|
| Maternity benefits | 15 weeks | 55% of earnings | ~$668/week |
| Standard parental (shared) | 40 weeks | 55% of earnings | ~$668/week |
| Extended parental (shared) | 69 weeks | 33% of earnings | ~$401/week |
The maximum insurable earnings for 2025 are $63,200. If you earn more than this, your EI benefits are still capped at the maximum rate. A two-week waiting period applies before benefits begin — budget for this gap.
Many Canadian employers offer maternity leave top-up plans that supplement EI to bring your income closer to your regular salary. Review your employment contract and HR policy to understand what top-up, if any, you are entitled to. If your employer offers a top-up, it does not reduce your EI benefits.
Start saving six to twelve months before your leave. A dedicated TFSA account works well — contributions are flexible, withdrawals are tax-free, and you can replenish after returning to work. Target covering the gap between EI benefits and your regular living expenses for the full leave duration.
Your RRSP contribution room is based on employment income. Contribute as much as possible in your last full working year before leave — your income and marginal tax rate are at their highest, so the tax deduction is most valuable. Once on EI, your income drops significantly, making RRSP contributions less tax-advantageous.
Before leave begins, review your monthly fixed costs: subscriptions, insurance premiums, car payments. Cancel or pause what you can. Reducing your baseline spending before income drops makes the transition far smoother.
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Get KOHO Free — Use Code 45ET55JSYAWhile on EI, your income is low — typically $25,000–$40,000 for the year. This puts you in a low marginal tax bracket. TFSA contributions are more valuable here because you are saving after-tax dollars at a low rate and all future growth is tax-free. Hold off on RRSP contributions unless you have unused room from previous high-earning years and want to use the deduction strategically.
EI maternity and parental benefits are taxable income. CRA will issue a T4E slip. If your household income is relatively low, you may owe little or no additional tax — but if your partner has high income and you file jointly, be aware of potential clawbacks or additional amounts owing.
Once your baby arrives, apply for the Canada Child Benefit immediately through CRA. The CCB provides tax-free monthly payments based on family net income and number of children. For a family with net income below ~$36,502, the maximum benefit in 2025 is approximately $7,787/year for a child under 6. Apply as soon as possible after birth — payments are not backdated more than 11 months.