How to Make Money on Maternity Leave in Canada

For most, maternity leave is a time to focus on your child’s first year of life. This is often demanding, especially for new parents. In addition, many cherish the time away from work and other adult obligations to focus on this new milestone in their life. But with that said, everyone navigates parenthood differently. Some may be motivated to make money, possibly out of necessity. Alternatively, it could be a way to stay in touch with the “real world” and not become insular during maternity leave. In this article, we’ll explore how to make money on maternity leave in Canada. This will include the limits surrounding earning money on maternity leave and ideas on how to actually bring in some extra dollars. Continue reading to learn more!

How to Make Money on Maternity Leave in Canada

Can I earn money while on maternity leave in Canada?

The answer is it depends. If you are not claiming maternity or parental benefits, then you are free to earn as much money as you’d like. But if you are claiming maternity or parental benefits, you have to first serve your waiting period. The waiting period is only one week. It is sort of like a deductible, similarly to a minimum payment before making an insurance claim.

After the 1-week waiting period, you can earn money. You will be able to keep 50 cents of your Employment Insurance (EI) benefit for every dollar you earn, up to 90% of the weekly insurable earnings used to calculate your EI benefit amount. The 90% amount is the earnings threshold.

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These types of income will be deducted from your EI maternity and parental benefits:

  • Employment income
  • Self-employment income
  • Compensation payments from a work accident or occupational sickness
  • Payments from a group health insurance plan or group wage loss replacement plan
  • Retirement income, such as Canada Pension Plan (CPP), military or police pension or provincial employment-based plans
  • Allowances or other benefits paid under provincial legislation

Related Reading: What to do when you get laid off in Canada?

These types of income will not be deducted from your EI maternity and parental benefits:

  • Disability benefits
  • Survivor or dependent benefits
  • Workers’ compensation benefits
  • Additional insurance benefits paid under a private plan that are approved by Service Canada
  • Additional maternity or parental benefits paid by an employer from a supplemental unemployment benefit plan
  • Sickness or disability payments received under a private wage loss replacement plan
  • Retroactive salary increases

To summarize, you can earn money while on maternity leave. However, you do have to be wary you don’t cannibalize your EI benefits, if you are receiving those. If you are receiving EI benefits, it might be better not to earn additional money and just rely on the benefit. After all, it’s meant to help you while navigating the first year of your newborn child’s life!

How much does the government of Canada pay for maternity leave?

As of 2023, the maximum weekly amount you can get while on maternity leave from EI benefits is $650. The exact amount you receive is up to 55% of your earnings. But remember, you may have to pay some of this back if you earn excess income.

Related Reading: What is My RRSP Contribution Limit?

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How can I earn money while on maternity leave?

There are tons of ways to earn money while on maternity leave. Although, it should go without saying that you shouldn’t compromise your child’s wellbeing and safety to earn an income.

Here’s some tactics on how to make money on maternity leave in Canada from non-employment sources:

  • Clean out your closet and home. Are there old clothes or items that you’re no longer using? Or maybe you overprepared for the baby and don’t have use for some of the things you bought. Gather them and sell them on platforms like Kijiji and Facebook Marketplace. Now that you’re a parent, chances are there’s some things you no longer have use for! Maybe that beer pong table from college or that fancy prom dress from your teens.
  • Switch banks. There are tons of promotional offers available in Canada for new account holders. Interested in making a couple extra hundred bucks? It could be worth it. However, make sure to read the fine print because some of the offers have hidden terms and conditions before you get your promo.
  • Get into investing. If you have the spare time to learn a new skill, investing is a good one to get into. Try to build a passive income stream. If you successfully manage it, you can rely on the passive income stream indefinitely!
  • Other government benefits. Take some time to research other government benefits available to you. Who knows? You might find out you’re eligible for something and you can bring in some extra cash.
  • Pursue a passion. This one is more so a long game, but if there’s a course or subject you always wanted to study and potentially pursue as a career, now’s your chance. You can take free online courses with companies like Coursera and Free Learn Canada.

Working not an issue? Here’s some tactics on how to make money on maternity leave in Canada from employment sources:

  • Paid surveys. You’re not exactly going to earn a fortune off these, but maybe you’ll earn some Starbucks money. Plus, you could be helping countless others by providing your insights. There may even be surveys targeted at new mothers or parents.
  • Rent out your car. If you don’t use your car a ton, you can rent it out on apps like Turo. You can always ensure your car is ready and available for you when you need it — you’re in the driver’s seat!
  • Online side hustles. Do you have a knack for writing? Or maybe you’re good at coding? Perhaps you’re really good at graphic design? All these things can be monetized online. You can start by making a profile for yourself on platforms like Fiverr and Upwork.
  • Create an online store. If you’re a crafty person and have the resources to build at home, you can open an online store. You can start selling your creations online for a profit.
  • Babysitting. If other parents in your neighborhood need help caring for their kids, you can make some extra money babysitting. In fact, some parents have even found success creating a small day care in their home. The parents will have more trust in you than a stranger at a day care and your children will grow up around their neighbors — it’s a win win!

There are likely a ton of other ways on how to make money on maternity leave in Canada — this is just what we came up with. If you’re bored, it’s time to get creative and think of ways to make a couple extra bucks!

How to avoid maternity leave deductions?

If you don’t want your maternity or parental leave benefits to be deducted, do not earn employment or self-employment income while claiming benefits. Otherwise, you might have to pay back some of your EI benefits through a clawback at tax time. Although, you can earn passive income or money from promos. If you’re unclear of what income affects maternity leave deductions, refer back to the lists we provided above.

Related Reading: The RRSP in Canada: A Complete Strategy Guide

What jobs can I do from home on maternity leave?

The easiest jobs to do from home while on maternity leave are those that are online. This could be freelancing, consulting, or offering services through some kind of online marketplace. By doing so, you can be close to your child, while still earning an income. Start by assessing what your skills are and then determine a plan to offer them online. This could be proofreading, website design, teaching an online course and more — the options are infinite! Who knows, maybe you’ll discover a knack for it and can continue to work from home online beyond your maternity leave.

Related Reading: Does Your Debt Die with You in Canada?

What are the advantages of making money on maternity leave?

Let’s face it, raising a child isn’t cheap! Childcare costs have gone up exponentially. In addition, there tends to be more demands placed on child rearing, such as investing in a hobby or sport of theirs and saving for post-secondary education. Making money while on maternity leave can be affective way to raise extra money to put towards these kinds of costs.

In terms of qualitative advantages, everyone experiences parenthood differently. Some people have demanding children which doesn’t leave them much time to do much else. But others may have quiet, sleepy children who don’t fuss a lot. In that case, you may find yourself feeling bored on maternity leave and wanting to make some extra money. In other words, making money on maternity leave can be a great way to pass the time and stay in touch with the “real world”, so to speak.

Read More: How to Make Extra Money Online in Canada

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