When you must issue an ROE
You must issue an ROE whenever an employee has an interruption of earnings. That happens when an employee quits, is dismissed, is laid off, or goes on leave and has seven consecutive calendar days with no work and no insurable earnings from you. It also happens when an employee’s earnings drop below 60% of their regular weekly earnings because of illness, injury, quarantine, pregnancy or parental leave, or caring for a family member.
You issue an ROE for every interruption, even if you do not think the employee will apply for EI and even if they say they do not need one. The ROE is how Service Canada builds a person’s insurable employment history, and a missing ROE can delay their benefits for weeks.
Deadlines
If you file ROEs electronically, you must issue each one within five calendar days after the end of the pay period in which the interruption of earnings occurred. Paper ROEs must be issued within five calendar days of the interruption or of the day you become aware of it. Electronic filing is strongly preferred by Service Canada; employees can see their ROE in their My Service Canada Account, and you do not need to give them a paper copy.
Late or missing ROEs can lead to penalties, and they cause real hardship for the employee waiting on benefits. Build the five-day deadline into your termination checklist and track it. SeroPayroll tracks the deadline for each ROE it prepares.
How to file: ROE Web or a payroll extract
There are two electronic options. ROE Web is Service Canada’s online application, where you can fill in ROEs one at a time on screen. Or you can upload a payroll extract file (a .BLK file) produced by payroll software, which fills in the hours and earnings automatically from your payroll records. Either way, you first need to register your business for ROE Web through Service Canada and set up users.
Uploading a payroll extract is faster and less error-prone, because the software already knows each pay period’s insurable hours and earnings. SeroPayroll, and payroll inside SeroBooks Pro, produce ROE .BLK files ready to upload to ROE Web.
What goes on the ROE
The ROE asks for the employee’s details and SIN, your business number and payroll account, the pay period type, the first day worked, the last day for which the employee was paid, and the final pay period ending date. It also asks whether the employee is expected to return and, if so, when.
The core of the ROE is insurable hours and insurable earnings. You report total insurable hours over the required number of most recent pay periods, and insurable earnings for each of those pay periods. Insurable earnings generally include wages, vacation pay paid during employment, and most taxable benefits paid in cash, up to the annual maximum insurable earnings. Hours include paid hours, including paid leave and overtime hours actually worked, not overtime multiplied by the premium rate.
Finally, report any vacation pay, severance, retiring allowances, pay in lieu of notice or other monies paid or payable at separation. These can affect when EI benefits begin, so report them accurately.
- Employee name, address and SIN
- First day worked and last day paid
- Final pay period ending date and pay period type
- Insurable hours and insurable earnings by pay period
- Expected date of recall, if any
- Reason for issuing (reason code)
- Vacation pay, severance and other monies at separation
Choosing the right reason code
Every ROE needs a reason code describing why it was issued. Choose the code that matches the actual situation, not the one the employee asks for. Service Canada decides EI eligibility; your job is to report facts. If the situation is unclear, describe it accurately and be prepared to answer a follow-up call from Service Canada.
If you are unsure which code applies, Service Canada’s ROE guide lists every code with examples. Choosing code K (other) when a specific code exists usually leads to Service Canada contacting you for clarification.
- A: shortage of work, end of contract or season
- D: illness or injury
- E: quit
- F: maternity
- G: retirement
- M: dismissal
- N: leave of absence
- K: other (with an explanation)
Amending or replacing an ROE
If you find a mistake after issuing an ROE, such as wrong insurable earnings or a missed final payment, issue an amended ROE through ROE Web or by uploading a corrected file. Do not issue a new ROE for the same interruption. Amending updates the existing record so the employee’s claim reflects the correct information.
Common reasons to amend include retroactive pay increases, vacation pay or severance that was calculated after the ROE was issued, and corrections to the last day paid.
Insurable hours and earnings: getting the numbers right
The number of pay periods you report depends on your pay frequency. Service Canada sets the required count of most recent pay periods for each pay period type, so check the current ROE guide or let payroll software calculate it. Report the periods in order, starting with the final pay period, and include periods with zero earnings where they fall within the range.
For hourly employees, insurable hours are the hours actually worked and paid, plus paid leave such as vacation taken and statutory holidays. For salaried employees without tracked hours, use the employee’s normal hours of work, or a reasonable estimate consistent with their salary and the minimum wage rules. Overtime counts as the hours worked, not the premium-adjusted equivalent.
Insurable earnings for each pay period include gross wages, vacation pay paid in that period, statutory holiday pay, commissions, and most cash taxable benefits, up to the year’s maximum insurable earnings. They do not include non-cash benefits such as employer-paid group insurance premiums. When an employee’s earnings in a period exceed what is insurable, report the insurable amount only.
Keep records and build a routine
Keep copies of every ROE and the payroll records behind them for six years. Make the ROE part of a standard offboarding checklist: final pay calculated, outstanding vacation pay paid, ROE issued within five days, benefits cancelled, equipment returned and system access removed.
For seasonal businesses such as restaurants, patios, tourism and construction, ROEs arrive in batches at the end of each season. Preparing them from payroll software, rather than typing each one into ROE Web, saves hours and avoids errors in insurable hours.