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Learn how to correctly calculate the Record of Employment (ROE) in 2025. Ensure compliance, avoid mistakes, and support employees with accurate ROE reporting.
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Accuracy in payroll and HR documentation has never been more important. Among the most critical documents employers must provide in Canada is the Record of Employment (ROE). Whether an employee resigns, is laid off, or faces reduced hours, a properly issued ROE ensures that the employee can apply for Employment Insurance (EI) benefits without delay.
Knowing how to calculate the Record of Employment correctly is vital—not only for employee wellbeing but also for maintaining legal compliance and protecting your business from penalties.
In this guide, we’ll explain everything you need to know about calculating ROEs correctly in 2025, including how to handle complex situations, avoid mistakes, and adopt best practices that simplify the process.
A Record of Employment (ROE) is a critical document issued by Canadian employers that records details of an employee's work history, including hours worked, earnings, and the reason for their interruption of earnings. Service Canada uses this information to determine eligibility for Employment Insurance (EI) benefits.
Employers must submit an ROE even if the employee is not planning to apply for EI. The ROE protects both employees and employers by creating an official record of employment activities.
Regardless of the cause of the employment interruption, the law requires that the ROE be issued promptly and accurately.
When errors occur on an ROE, they can create a domino effect of problems:
By knowing how to calculate the Record of Employment properly, businesses can protect themselves and support employees in times of transition.
Employers must issue an ROE under several circumstances, including:
There are no exceptions based on employment type—full-time, part-time, casual, and seasonal workers are all covered by ROE rules.
Proper calculation involves gathering complete, accurate data for each employee experiencing an interruption. Let’s walk through it in detail:
An ROE requires detailed insurable earnings for a specific number of pay periods leading up to the last day worked:
Tip: Even if the employee worked for fewer periods, you report only the periods actually worked.
Insurable earnings include more than just base wages:
Include:
Exclude:
Important: You must report gross earnings before deductions for taxes, benefits, or other withholdings.
For hourly workers: Report actual hours worked per pay period.
For salaried workers: Use standard weekly hours (e.g., 40 hours/week) unless employment agreements specify differently.
Example:
The last day worked is the last day the employee was physically present and earning wages.
It does not include vacation, severance, or paid leaves extending beyond the final working day.
If an employee works their final shift on July 15 but is paid vacation up to July 30, you still record July 15 as the last day worked.
This is a critical field on the ROE (Box 16):
Choosing the wrong reason code can delay an employee’s EI application! Always match the reason precisely to Service Canada’s definitions.
Scenario:
Steps:
If an employee leaves for maternity or parental leave, use Code "F" for Maternity or appropriate parental leave reasons.
Ensure the ROE reflects accurate insurable hours leading up to the leave.
Remote work status does not change ROE obligations. As long as the employee has an interruption in earnings, the employer must issue an ROE.
Even casual employees with irregular schedules must have an ROE issued once their earnings interruption occurs (e.g., end of a seasonal contract).
Employers often run into trouble with:
Each of these mistakes can cause audits, fines, and unnecessary administration headaches.
Modern payroll systems offer built-in ROE Web integration, dramatically reducing manual errors. Look for platforms certified to file ROEs electronically.
Consistently record employee status changes, pay adjustments, leave periods, and hours worked to simplify calculations when an ROE is needed.
Host annual training sessions on ROE compliance and updates from Service Canada to ensure consistency across the organization.
Always double-check:
Electronic submissions through ROE Web minimize delays and provide confirmation tracking, ensuring you meet your legal obligations.
Employers must keep payroll records, including ROEs, for at least six years after they are created.
This is important for audit defense and employee record requests.
Because ROE reporting periods vary by pay cycle:
Ensure your payroll and HRIS systems are configured correctly to capture the right reporting periods when generating an ROE.
Mastering how to calculate Record of Employment correctly in 2025 is not just a regulatory obligation—it’s a best practice that strengthens the relationship between employers and employees.
By understanding every detail, automating processes, and submitting ROEs promptly, you protect your company from compliance risks and support your employees' financial security during transitions.
Small mistakes can create big problems—but with the right approach, you can manage ROEs with confidence and precision.
Schedule your free Outsail consultation today and discover the tools and partners that can help you streamline compliance, protect your business, and better support your employees.
