Christopher Liew is a CFP®, CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers at Blueprint Financial.
Preparing for the arrival of your first child can be as exciting as it is overwhelming, especially if you’re planning to take parental leave. While your Employment Insurance (EI) will provide some basic income support, it typically only replaces a portion of your regular earnings.
If you don’t already have several months’ worth of expenses saved in reserve prior to the arrival of your new child, you’ll need to employ some resourceful budgeting if you plan to take time off with your family.
Whether you’re planning to take a few months off or the full extended leave, the key to a successful transition lies in understanding the support available to you combined with a solid financial plan.
Below, I’ll break down some basics about how EI parental benefits work, how much you can expect to receive, and outline practical budgeting tips to help you feel more financially prepared.
Parental leave basics
EI maternity and parental benefits provide income replacement for eligible parents while they take time off work to care for a newborn or newly adopted child. However, the structure and amount of these benefits may differ based on your situation and the type of leave you choose.
Should you choose to take parental leave, your right to return to work may also be protected by various provincial regulations, allowing you to return to your prior position and rate of pay.
EI qualification
To qualify for EI parental benefits, you must have worked at least 600 insurable hours in the 52 weeks before your claim (equivalent to working around 12 hours per week for one year) and must also have experienced an interruption in earnings due to childbirth or parental responsibilities (something almost every parent qualifies for).
Both biological and adoptive parents may apply. If you’re self-employed, you must be registered with the EI program and meet minimum contribution requirements.
Standard vs. extended parental leave
Eligible new parents have two options:
- Standard leave - provides up to 40 weeks of shared benefits (with one parent eligible for up to 35 weeks), pays up to 55 per cent of your average weekly earnings
- Extended leave - offers up to 69 weeks (with one parent eligible for up to 61 weeks), pays up to 33 per cent of your average weekly earnings
How much can you get from EI parental leave benefits?
As of 2025, the maximum weekly benefit for standard parental leave is $695, and for extended leave, the weekly maximum drops to $417.
These amounts do count as taxable income, which means you won’t see the full amount. That said, some employers offer their own prospective parental leave benefits, which could help bridge the gap, providing you with additional income and your employer with a tax break or credit.
Budgeting before the baby arrives
Understanding what you can expect to receive from your EI government benefit is the first step to creating your budget. Once you have a reliable number you can expect from EI, you can create a plan to cover any additional resources you may need to cover bills and basic living expenses.
1. Estimate your EI income and compare it to your current spending
Use the Government of Canada’s EI benefits calculator to get a rough estimate of what your weekly payments will be. Then, compare that number to your current monthly expenses to identify any potential shortfalls. Knowing your “leave income” in advance helps you determine how much you may need to cut back or save ahead of time.
2. Build a parental leave emergency fund
Ideally, you should aim to save enough money to cover three to six months’ worth of essential expenses. Start putting aside money each month before the baby arrives. Even a small, consistent contribution can make a big difference as you prepare for a newborn.
3. Reduce or eliminate non-essential expenses
Take a close look at your spending and trim where possible. Cancel unused subscriptions, limit takeout, and postpone big-ticket purchases. Prioritize needs over wants, especially as baby-related expenses begin to take up more space in your budget. The goal is to keep your finances manageable while still enjoying time with your new child.
Long-term financial considerations
In addition to saving up and budgeting for your basic parental leave, adding a new member to the family will come with a host of other long-term financial implications, such as:
- Your child’s clothing
- School supplies
- Furniture, bedding, and room supplies
- Food and snacks
- Childcare expenses while they’re too young for school
Although you don’t need to budget for these specific expenses immediately prior to your parental leave, I do encourage new parents to devote some of their time off to create a financial plan for the future.
Once you get back into the daily rhythm of work, life, and caring for your child, planning for the future can become more difficult. Whether your goal is to create more disposable income, reduce your living expenses, go back to school, or start a small business, it’s easier to do this while you’re rested and relaxed rather than after you get back to the grind.
Final thoughts
Thanks to EI parental leave benefits, eligible parents-to-be are entitled to a portion of their pre-leave income. This benefit payment, combined with the right budgeting skills and savings, can provide new parents with the stress-free time they need to forge a lasting bond with their new child.
Planning ahead (even as early as nine months ahead) will give you a better chance to set you and your family up for success and allow you to take as much time as you need.
