Flaherty said the step will result in savings of $660 million in 2014.
"We are able to do this because of the falling unemployment rate — more people are working, fewer people are claiming Employment Insurance benefits and as a result the Employment Insurance operating account is on track to return to balance earlier than had been planned," Flaherty told reporters.
Employees currently pay a maximum annual EI premium of $891.12 while employers pay $1,247.57 based on a maximum annual insurable earnings of $47,400.
That works out to a 1.88 per cent EI premium rate for employees.
More to come