Maternity leave is one of those seasons of life that feels equal parts exciting and financially terrifying. You’re growing a human, trying to prepare for everything, and somewhere in the middle of all that, you realize your paycheque is about to look very different.
I get it. I’m navigating this myself right now, and the financial side of mat leave is something most people don’t talk about honestly enough. So let’s change that.
This post breaks down what you can actually expect money-wise during maternity leave in Canada, what decisions you need to make ahead of time, and how to set yourself up so you’re not scrambling once the baby arrives.
First, let’s talk about what mat leave actually pays you.
In Canada, maternity and parental leave benefits come through Employment Insurance (EI), administered by the federal government. The basic idea is this: you stop working, you apply for EI, and the government replaces a portion of your income while you’re home with your baby.
The key word there is “portion.”
EI pays you 55% of your average insurable weekly earnings, up to a maximum of $729 per week in 2026. So if you were earning $1,500 a week before leave, 55% of that would be $825, but you’d actually receive around $729 because of the maximum. If you were earning $3,000 a week, you’d still only get $729 because that’s the ceiling.
For most Canadians, that’s a meaningful income drop. Which is exactly why planning ahead matters so much.
Maternity vs. parental benefits: what’s the difference?
These two often get lumped together, but they’re separate benefits.
Maternity benefits are for the person who gave birth. You can receive up to 15 weeks at that 55% rate. These are yours alone and can’t be shared with your partner.
Parental benefits are for both parents and can be shared. Here’s where you have a choice to make and it’s an important one.
Standard parental benefits give you up to 35 weeks of benefits at 55% of your earnings (maximum $729/week). You have to use them within 52 weeks of your baby’s birth.
Extended parental benefits stretch to 61 weeks but at a reduced rate of 33% of your earnings (maximum $437/week). You have up to 78 weeks to use them.
So standard pays more per week over a shorter period, and extended pays less per week but keeps income coming in longer. Neither is universally better. It depends on your household income, your partner’s situation, and how long you want to be home.
To reiterate, standard parental benefits give your family up to 40 weeks total, but one parent can receive up to 35 of those weeks; extended benefits give up to 69 weeks total, with up to 61 weeks for one parent.
One thing to know: once you start receiving parental benefits, you cannot switch between standard and extended. The decision is final. So think it through before you apply.
Does your employer top up your EI?
Some employers offer what’s called a maternity top-up, where they pay you the difference between your EI amount and a percentage of your full salary, sometimes up to 100% for a period of time.
If you’re not sure whether your employer offers this, now is the time to ask HR. Don’t assume. It can make a significant difference to how much you have coming in during those first few months.
The one thing that surprises most people: EI is taxable
A lot of people don’t realize this until they file their taxes and get a nasty surprise. Your EI benefits are considered taxable income. The government will deduct some tax off your payments, but depending on your situation, you might still owe at tax time or receive a refund.
If you want to avoid any surprises, you can request additional tax to be withheld from your EI payments when you apply. It’s worth speaking to an accountant or doing some math before you decide.
How to actually budget for mat leave
Once you know roughly what you’ll be receiving each month, the next step is getting your budget in line with that new reality. Here’s a simple way to approach it.
- Step one: figure out your real monthly EI amount. Use the EI Benefits Estimator on Canada.ca to get a personalized estimate based on your earnings.
- Step two: list your fixed monthly expenses. Rent or mortgage, utilities, car payments, subscriptions, insurance, debt minimum payments. These don’t change just because your income does.
- Step three: find the gap. Subtract your fixed expenses from your EI income. What’s left is what you have for groceries, baby supplies, and everything else. If you’re in the negative, you need to either cut something or supplement your income.
- Step four: build a mat leave fund before you go. If you have a few weeks or months before your leave starts, try to save aggressively now. Even $200 to $400 extra per month in a TFSA or high interest savings account can give you a cushion when you need it most.
A few things worth thinking about before your leave starts
Apply for EI as soon as you stop working. If you wait more than four weeks after your last day, you could lose benefits. Apply right away even if you don’t have all your documents yet.
Look into the Canada Child Benefit (CCB). Once your baby is born, you become eligible for the CCB, a tax-free monthly payment from the federal government. The amount depends on your family income and the age of your child. For many families this is a meaningful monthly addition. Make sure you apply as soon as possible after the birth. But please note that eligibility is based on your filing your taxes return.
Check if your province has additional benefits. Quebec has its own program called the Quebec Parental Insurance Plan (QPIP), which is more generous than the federal EI program. Some provinces also have their own supplements or tax credits and child benefits worth looking into.
Don’t forget about your RRSP and TFSA contributions. Mat leave is often when people pause their investing entirely and understandably so. But if you have any wiggle room, even small contributions to a TFSA during this time keep the habit going and your room doesn’t disappear if you don’t use it.
The honest truth about mat leave finances
Mat leave is one of the most financially humbling experiences many Canadians go through. Going from a full salary to 55% of it, right when your expenses are going up, is genuinely hard.
But it’s manageable with a plan. The people who struggle most are usually the ones who didn’t look at the numbers until the leave had already started. The people who do well are the ones who ran the math a few months out, made some adjustments, and gave themselves a buffer.
You don’t need to have it all figured out perfectly. You just need to understand what’s coming in, what’s going out, and where the gaps are.
If you want a more complete foundation for your finances before baby arrives, my book Financial Planning for Canadians: A Beginner’s Guide walks through all of this in a calm, structured way, including budgeting, savings accounts, and how to make your money work harder at every stage of life.
Have questions about mat leave finances or something specific you’re trying to figure out? Drop a comment below or reach out through the contact page. I’m happy to help.