NPI - Your Payroll Vacation Questions Answered - EN August 17 2023

YOUR PAYROLL
VACATION QUESTIONS
ANSWERED
4th Edition
TABLE OF CONTENTS
ACKNOWLEDGEMENTS �� 4
FORWARD �� 5
ABOUT THE INSTITUTE �� 7
SECTION 1: OVERVIEW �� 8

INTRODUCTION �� 8
EMPLOYMENT/LABOUR STANDARDS LEGISLATION �� 8
GREATER RIGHT OR BENEFIT �� 10
VACATION REFERENCE YEAR & ENTITLEMENT PERIOD �� 11
VACATION TIME VERSUS VACATION PAY �� 12
VACATIONABLE EARNINGS �� 13
ACCRUAL OF VACATION WHILE ON MATERNITY & OTHER LEGISLATED LEAVES �� 14
VACATION PAY UPON TERMINATION �� 16
DEDUCTIONS FOR OVERPAYMENTS OF VACATION PAY �� 17
VACATION REQUESTS �� 18
ESTABLISHING A VACATION POLICY �� 18
EMPLOYEE DONATION OF VACATION �� 21
SECTION 2: TABLES & TEMPLATES �� 22

TABLE 2.1: MINIMUM VACATION TIME & PAY REQUIREMENTS �� 22
TABLE 2.2: EMPLOYER OBLIGATIONS REGARDING VACATION �� 23
TABLE 2.3: VACATION POLICIES PERMITTED BY JURISDICTION �� 25
TABLE 2.4: VACATIONABLE EARNINGS BY JURISDICTION �� 26
TABLE 2.5: ACCRUAL OF VACATION TIME AND PAY WHILE ON LEGISLATED LEAVE �� 27
TABLE 2.6: RECOVERY OF ADMINISTRATIVE ERRORS OR ADVANCES NOT EARNED �� 28
TEMPLATE 2.7: ONLINE VACATION REQUEST EXAMPLE �� 30
TEMPLATE 2.8: VACATION REQUEST FORM �� 30
TEMPLATE 2.9: VACATION PAY RECONCILIATION �� 31
SECTION 3: QUESTIONS & ANSWERS BY TOPIC �� 32

VACATION TIME �� 32
VACATION SCHEDULING �� 33
VACATION PAY �� 35
YOUR PAYROLL VACATION QUESTIONS ANSWERED 2

VACATION ENTITLEMENT �� 36
BONUSES AND COMMISSION �� 38
VACATION POLICY �� 40
SECTION 4: QUESTIONS AND ANSWERS BY JURISDICTION �� 42

ALBERTA �� 45
BRITISH COLUMBIA �� 47
MANITOBA �� 51
NEW BRUNSWICK �� 53
NEWFOUNDLAND & LABRADOR �� 56
NORTHWEST TERRITORIES & NUNAVUT �� 59
NOVA SCOTIA �� 62
ONTARIO �� 65
PRINCE EDWARD ISLAND �� 68
QUEBEC �� 71
SASKATCHEWAN �� 74
YUKON �� 77
SECTION 5: RESOURCES �� 80

RESOURCES & WEBSITES �� 80

Copyright © 2010, 2017, 2018, 2023 fourth edition, National Payroll Institute. All rights reserved.
Published by the National Payroll Institute, Toronto, Ontario, Canada
Limit of Liability: This publication provides accurate and authoritative information. While the
publisher has used their best efforts in preparing this book, they make no representations concerning
the accuracy or completeness of the contents of this publication.
National Payroll Institute, Your Payroll Vacation Questions Answered, fourth edition / National
Payroll Institute
ACKNOWLEDGEMENTS
The National Payroll Institute (the Institute) would like to thank the members and staff who
provided both content and feedback on the development of Your Payroll Vacation Questions
Answered, fourth edition.
For more information on the National Payroll Institute and its products and services, please visit
www.payroll.ca or call
1-800-387-4693.

FORWARD
One of the biggest anxieties for payroll professionals is dealing with vacations. While it may seem
like a straightforward aspect of the employee relationship, that is not always the case. Employers
must be in full compliance with employment/labour standards regarding vacations.
Without exception, employment/labour standards in all jurisdictions in Canada provide employees

with a vacation in the form of paid time away from work. The legislation on vacations includes two
components: time and pay.
According to legislation across the country, employees earn vacation time and accrue vacation pay
over a 12-month period, and then enjoy the earned vacation time and receive the accrued vacation
pay during the next twelve-month period within the legislated time frames. Following this process,
employees only take vacation time and receive vacation pay after earning it.
For example, an employee earns vacation time and accrues vacation pay during the current vacation
reference year. In the following year, the employee takes the vacation time earned in the prior year,
and the employer pays out the vacation pay that had accrued. Based on the jurisdiction, vacation
time and pay will be granted within four to twelve months after being earned.
The vacation pay is calculated on the actual vacationable earnings when the above process is
followed. Vacationable earnings include regular wages, work-related bonus payments, and other types
of earnings, depending on the employee's jurisdiction. Employees receive vacation pay instead of
regular wages when they take vacation time.
In practice, however, employers do not generally administer vacation time and vacation pay in this
way. Employees do not necessarily want to wait a year or more to take a vacation, so many employers
allow their employees to take vacation time and receive vacation pay during the same
twelve-month period it is being earned and accrued. Some employers also allow employees to carry
over unused vacation, accrue vacation time and vacation pay as one component (one day per month
of regular pay to a maximum of ten days), or provide more vacation time with pay than legislated.
For example, let’s consider the following scenario: The employer uses the calendar year as the twelve-
month reference period in which employees earn and accrue their vacation entitlements (time and
pay). Employees are allowed to take their vacation time during the current twelve-month reference
period as they earn it and are paid at their regular pay rate while on vacation.
Theoretically, the vacation time and pay have been earned and taken by the end of the year, and the
vacation time and pay accumulators should be at zero. However, if the jurisdictional vacationable
earnings include other types of earnings an employee has received during the year, the vacation pays
received (paid at the employee’s regular pay rate) may not equal the total vacation pay owed to the
employee.

Therefore, a reconciliation of the vacation pays owed compared to what the employee was paid as
vacation pay must be completed. Any outstanding balance must be paid to the employee. Depending
on the jurisdiction, this balance must be paid within four to twelve months of the employee earning
it (in this case, four to twelve months after the end of the calendar year, December 31).
Similarly, if all the vacation time was not taken, unused vacation time may be carried forward.
Still, it must be taken within the legislated time frame applicable to the jurisdiction (four to twelve
months).
Where employers provide greater vacation time than legislated, a company policy or collective
agreement must state how that excess vacation time will be handled. For example, the company must
determine when the time can be taken, how much and how long the unused portion can be carried
over, and other administrative details.
Employers may prefer to accumulate vacation time and vacation pay as one component (one day of
regular pay per month). They must ensure the value is equal to or greater than the vacation time and
pay required by law. They should also develop a company policy that clearly states the conditions
under which the vacation will or will not accrue.
For example, employees will accrue vacation during active service but not during leaves of absence.
As you can see from these examples, the administration of vacations can become quite complex.
The National Payroll Institute (the Institute) has created this publication to help you. It provides
expert explanations and resources and answers to real questions from members in seminars and via
the Institute’s Payroll InfoLine.
The breadth of topics addressed in this book underscores the challenge this area represents. However,
it also highlights the opportunity for payroll to play a vital role in offering leadership and expertise in
the administration of vacations in their organization.
Steven Van Alstine, PLP, CAE

Vice-President, Professional Standards and Education
National Payroll Institute

ABOUT THE INSTITUTE
The National Payroll Institute (the Institute) has influenced the payroll compliance practices and
processes of hundreds of thousands of employers since 1978. The Institute’s mission is Payroll
Compliance through Advocacy and Education. With more than 20,000 organizations and
individual members, the Institute is committed to providing payroll-related services to payroll
professionals, and their employers need to be compliant and knowledgeable.
As the authoritative source of Canadian payroll compliance knowledge, the Institute has offered
professional payroll education and resources to its members regarding the administration of
vacations. This publication contains the resources and information available to members, as well as
the variety of questions received from members on this topic in seminars and through the Institute’s
Payroll InfoLine.
National Payroll Institute

Toll free: 1-800-387-4693
Tel.: 416-487-3380
Email: InfoLine@payroll.ca (Please note: The Institute’s Payroll InfoLine is a members-only service.
You will be asked for your member number to access it.)
Disclaimer
The information presented in this publication represents the findings and recommendations of the National Payroll Institute and
is only as up-to-date as at the time of printing. While efforts have been made to answer all questions to the best of its ability as the
authoritative source of Canadian payroll knowledge, there is no claim as to the absolute reliability and accuracy of any information
presented herein, and there will be no acceptance of liability or responsibility for any errors or omissions on the part of the Institute.
Readers are encouraged to seek qualified legal advice on points of law or matters of interpretation.

SECTION 1: OVERVIEW
INTRODUCTION
Compliance with employment/labour standards regarding vacations is essential for all employers.
However, payroll professionals often find that the administration of vacation entitlements can
become quite challenging.
Employment/labour standards legislation states that vacation comprises vacation time and pay.
However, calculating and treating that time and pay varies from jurisdiction to jurisdiction. If you
work for a national organization, you may have to ensure compliance with up to 14 jurisdictions:
federal, provincial, and territorial laws. Also, remember that a company policy or a collective
agreement can replace the minimum standards and provide a greater right or benefit.
This publication provides information and resources on the administration of vacations for each
jurisdiction. It outlines all the payroll-related issues related to vacation time and vacation pay and
then looks specifically at each of the 14 jurisdictions in Canada.
Each chapter intends to give accurate, practical answers to the hundreds of questions submitted by
National Payroll Institute members in seminars, information sessions and via the Payroll InfoLine.
The questions cover numerous topics across all jurisdictions.
Payroll professionals are urged to review all the questions and answers and keep this publication as
a handy reference guide to develop or update their organization’s vacation policy. Particularly where
their organization operates in more than one jurisdiction, payroll professionals must be aware of
employment/labour standards related to vacations across Canada to ensure compliance.
The information in this publication is organized by topic. General information, rules, and
recommendations are in the first section, and tables and templates can be found in the second
section. The questions in the third and fourth sections are based on those asked by real members of
the Institute and are arranged by topic or jurisdiction.
The information presented represents the findings and recommendations of the Institute at the
publication date.
EMPLOYMENT/LABOUR STANDARDS LEGISLATION
Employment/labour standards legislation is specific to each jurisdiction. Fourteen different

employment/labour standards statutes, with accompanying regulations, exist across Canada: one
for each of the ten provinces and three territories and a federal act for those organizations that are
federally legislated. Consequently, the treatment of employees is not consistent across the country.

Each of the 14 statutes contains sections providing employees with a vacation in paid time away
from work. While there are some similarities in the various pieces of legislation, the differences
between them make it difficult for an organization to formulate a general policy on vacation that
meets only the minimum requirements outlined in each jurisdiction. As a result, organizations
operating in more than one province or territory must develop a vacation policy that meets the
minimum legislative requirements of all jurisdictions. In other words, the organization’s policy
complies with the minimum requirements of the most generous jurisdictions in which it operates.
Employers must concern themselves with statutes for the jurisdictions with active operations or
employees conducting work. Employees are protected by the jurisdiction rules where they work,
which is not necessarily the jurisdiction from which they are paid. For example, if an employee is
working out of their home office in Ottawa, Ontario, and the head office is in Montreal, Quebec,
they would fall under Ontario Employment Standards (even though that employee would be taxed
at source as a Quebec employee).
To add another dynamic to the equation, if you are governed under the Canada Labour Code as an
organization specifically involved in business related to banking, telecommunication, transportation,
and other like operations, the province or territory in which you operate does not determine vacation
legislation. In such instances, the Canada Labour Code would determine policy. However, this is not
the most common case; most organizations in Canada are legislatively bound by the employment/
labour standards legislation of the provinces and territories in which they have employees performing
services.
Some conditions need to be established before attempting to make blanket statements about
employment/labour standards legislation:
• Employment/labour standards legislation does not cover all employees. In some cases, it specifically
exempts certain employees from its coverage. These exemptions vary based on jurisdiction. Careful
attention should be paid to the legislation and regulations regarding which class of employees are
exempt.
• Unionized organizations typically govern policy through a collective agreement. Collective agreements
take precedence over employment/labour standards. However, it is important to note that collective
agreements must meet the minimum employment/labour standards of the applicable provincial or
territorial act.
• When organizations operating in more than one jurisdiction attempt to formulate a vacation policy
that incorporates the minimum legislative requirements for all applicable jurisdictions, careful
attention must be paid to potential legislative amendments in all jurisdictions concerned. One small
change in legislation can significantly impact an organization’s vacation policy.
A company’s vacation policy or practice can never fall below the minimums laid out by employment/
labour standards. Rules that exceed the laws can be written and enforced, but individual clauses that
do not at least meet the minimum standards are not enforceable.

However, several jurisdictions have mechanisms for creating exceptions. The exceptions approved by
provincial or territorial employment/labour standards permit the employer and employee to agree to
certain adaptations of the act.
Vacation time and vacation pay information are available for all 14 jurisdictions across Canada
through the respective employment/labour standards websites. The links to the websites and
information on other resources are provided in Section 5: Resources.
GREATER RIGHT OR BENEFIT
If an employment contract or a collective bargaining agreement provides a greater right or benefit to

an employee than the minimum standard under employment/labour standards, the greater right or
benefit will generally prevail over the minimum standard. For example, with regard to vacation, some
employment contracts and collective agreements provide for a higher percentage of vacation pay and
longer vacations than legislation requires.
Contracts or agreements that do not at least satisfy the minimum standards under employment/
labour standards are not permitted. In addition, employers cannot rely on a greater benefit in respect
of one standard to offset a lesser benefit in respect of another.
From the perspective of vacation, employers should ensure that their policies address both the time
and the pay components to avoid misunderstandings; an employment/labour standards officer may
have to interpret a greater right or benefit provision.
To illustrate this point, it helps to look at Ontario’s Employment Standards Act as an example. The
Interpretation Manual deals with the concept of a greater right or benefit related to vacation and
vacation pay. The practical effects of this provision are as follows:
1. Any waiver or contracting out of any minimum standard under the Act is void.
2. Where an arrangement creates a greater entitlement than an employment standard, the
arrangement will prevail over the minimum standard.
3. Where a greater monetary benefit is provided, and the conditions for entitlement to that benefit
are met, the greater benefit should be assessed and enforced as wages due pursuant to s. 11(1). It
must be clear from the contract of employment exactly what the greater entitlement is before it is
enforced. For example, although a contract may provide a greater benefit of four weeks’ vacation
time, this does not necessarily mean that a corresponding increase (e.g., to 8 per cent) in the
percentage of vacation pay can be enforced. However, if a contract of employment does provide a
greater percentage for vacation pay, that greater percentage will be enforced even if the employee
does not complete the vacation entitlement year (unless the entitlement to the greater percentage
is clearly dependent upon that completion).

Greater benefit not clearly defined:
Employees will be entitled to four weeks of annual paid vacation leave.
Greater benefit clearly defined:

Employees will be entitled to four weeks of annual vacation leave. Vacation pay will be calculated
and paid as the greater of:
• four weeks of regular base salary/wage; or

• 6 per cent of vacationable earnings as defined by employment/labour standards legislation.
Unlimited vacation
Some employers have initiated unlimited vacation leave policies as a greater benefit. These plans
allow employees to take as many vacation days as they want, provided they complete their assigned
tasks and responsibilities.
An employer considering this type of greater benefit should create clear guidelines for employees on
using time off and ensure they accurately track all vacation leaves.
Under employment/labour standards legislation, an employer must be able to produce records to

validate employees received no less than their legislated entitlement to vacation time and pay.
The employer’s policy for an unlimited vacation plan must also define an employee’s entitlement
upon the termination of employment. For instance, although the plan may allow employees to take
unlimited time off during active employment, the policy may limit payout upon termination to the
legislated vacation pay entitlement.
VACATION REFERENCE YEAR & ENTITLEMENT PERIOD
A vacation reference year is a twelve-month period when the employee earns their vacation leave
and accrues vacation pay. Under employment/ labour standards legislation, employees earn the
entitlement in the current year. They would then be eligible to take the leave and receive the
payment of accrued vacation pay in the following year. Many employers provide a greater benefit by
allowing employees to take their vacation in the current year as it is accrued rather than waiting until
the following year.
The vacation reference year may be based on individual employee anniversary dates, or it can be a
common twelve-month period for all employees in the organization.
The entitlement period is the length of time following the end of the vacation reference year in
which the employer must grant vacation leave and pay accrued vacation dollars. These periods range
from four to twelve months, depending on the jurisdiction. See Table 2.1 in Section 2: Tables &
Templates for more details.

VACATION TIME VERSUS VACATION PAY
Vacation with pay is an entitlement addressed by legislation in every jurisdiction of Canada. It

applies, in some form, to every organization doing business in Canada. The idea of a vacation with
pay originates from a historical belief that an employee has a right to a defined annual break away
from work without financial loss.
The employer finances the break from work by accumulating a mandatory accrual of vacation pay,
calculated on top of the employee’s gross annual wage or salary.
The purpose of the legislation governing vacation is twofold:
• To provide an employee with time off work

• To provide for the payment of vacation pay
All jurisdictions require each employee, including part-time and managerial staff, to take a minimum
of two weeks off work after each year of employment unless specifically exempted under the
legislation. All jurisdictions require each employee, including part-time and managerial staff, to
take a minimum of two weeks off work after each year of employment unless specifically exempted
under the legislation. (Saskatchewan goes further, providing for a minimum of three weeks.) In some
jurisdictions, this minimum time increases with years of service.
Many jurisdictions legislate how an employee must take the time, for example, as either two periods
of one week each or as one period of two weeks. In some jurisdictions, for instance Ontario allows
vacation to be taken in one-day increments provided that the employee and employer agree in
writing. When a vacation week includes a statutory or company holiday, the vacation is extended
by one day, or another day off is arranged with the employee’s consent. See Table 2.2 in Section 2:
Tables & Templates for more details.
Each act defines vacation leave as a specified number of weeks. To convert that to days or hours, you
would calculate based on the following examples:
• An employee who normally works three days per week and is entitled to two weeks of vacation
would receive six days of vacation leave.
• An employee who normally works 25 hours per week and is entitled to two weeks of vacation
would receive 50 hours of vacation leave.
Note: It is important to note that when a business is sold, and the new owner continues to employ the
employees, vacation entitlement is considered the same as though the business had not been sold.
The employer can decide when the employee takes vacation time each year. Still, most employment/
labour standards legislation requires that employers provide the employee with adequate notice,
depending on the jurisdiction. Should the employee postpone the vacation indefinitely, the employer
does not have the right to advise that the legislated vacation will be forfeited if not taken by a specific

date. The employer is obliged to ensure that the legislated vacation time is taken. See Table 2.2 in
Section 2: Tables & Templates for more information.
Further, where notice of termination is given to the employee, the notice period cannot form any
part of the employee’s annual vacation. In other words, the employer cannot force the employee to
use any remaining annual vacation as part of the notice period.
In most jurisdictions, employees cannot waive their rights to the legislated minimum vacation
time without permission from the director of employment/labour standards. Generally, an
employee cannot be paid in lieu of taking the minimum vacation time except upon termination of
employment. See Table 2.3 in Section 2: Tables & Templates for more information.
Vacation pay is calculated as a percentage of gross vacationable earnings in all jurisdictions

except Saskatchewan, which calculates it as a fraction of vacationable earnings. The definition of
“vacationable earnings” varies from jurisdiction to jurisdiction. Vacation pay is paid when employees
take their vacation time or terminate their employment, whichever comes first. Some jurisdictions
also allow employees to receive their vacation pay entitlement on an anniversary date or vacation pay
each pay.
Many companies adopt a policy advancing vacation entitlement to employees before earned.
However, when an employee leaves the company before the vacation advance is satisfied, an employer
cannot withhold any vacation overpayment from that employee’s final earnings unless written
permission was obtained from the employee or is permitted by legislation.
In Quebec, before 2003, any vacation paid in advance used to be considered a gift and not the
payment of vacation pay. However, amendments to the legislation in 2003 harmonized the province
with the other jurisdictions (see the previous paragraph). Such amendments demonstrate the need to
keep on top of legislative changes.
VACATIONABLE EARNINGS
Under Canada’s employment/labour standards legislation, vacation pay is accrued on earnings

defined as vacationable that are paid during the twelve-month vacation reference year. Earnings
included in the calculation of vacation pay vary by jurisdiction and include payments made in
addition to regular salary or wages.
Some vacationable earnings common to all provincial and territorial jurisdictions include but are not
limited to regular wages and salary, call-in pay, shift premium, and retroactive payments. However,
some earnings are not vacationable in certain jurisdictions. These include, but are not limited to,
allowances, statutory holiday pay, overtime pay, gifts and certain types of bonuses. It is important to
note that an organization cannot expressly label an earning or payment by another term, so it will
not be included in the calculation of vacation pay.

A common issue is whether bonuses should be included in calculating vacation pay entitlements.
In general, bonuses and gifts that are non-discretionary or related to work hours, productivity or
efficiency are included in the earnings on which vacation pay is calculated. However, discretionary
bonuses and gifts unrelated to hours of work, production or efficiency are excluded. Thus, the
employer must know the type (discretionary or non-discretionary) and purpose (related to hours of
work, production or efficiency) of any bonuses to determine if they should be included with wages to
calculate vacation pay.
For information on what is included or excluded in the definition of wages when calculating vacation
pay, refer to Tables 2.4 and 2.5 in Section 2: Tables & Templates.
For further details, you can also consult each jurisdiction’s respective employment/labour standards
legislation and related regulations.
ACCRUAL OF VACATION WHILE ON MATERNITY & OTHER LEGISLATED

LEAVES
One of the most common issues surrounding annual vacation is its treatment in relation to the job-
protected leaves provided by employment/labour standards, such as maternity, paternity and parental
leaves. The rights of employees who are absent from work to have or care for a baby are protected
by law (similar to those that protect employees who spend time away from work because of layoff,
sickness, injury, approved leaves under a contract of employment or collective agreement, pregnancy
and emergency in many jurisdictions).
Legislation in each jurisdiction defines whether vacation leave continues to accrue while an employee
is on a legislated leave of absence. In some jurisdictions, vacation time continues to accrue during
the leave. In contrast, in others, vacation time accrues up to the leave date and only resumes once the
employee returns to active employment. See Table 2.6 in Section 2: Tables & Templates.
Although an employee returning from leave may be eligible for the full amount of vacation leave, the
amount of vacation pay owed will likely be less than normal because, unlike vacation time, vacation
pay is based on vacationable earnings. During an unpaid leave of absence, no vacation dollars accrue.
The exception is Quebec, where vacation dollars accrue on average weekly earnings when certain
types of leave occur, such as maternity and paternity.
For example, if an employee outside of Quebec is away on maternity, paternity or parental leave for
an entire vacation reference year, the employer would not normally owe that employee any vacation
pay. However, that employee would still be entitled to two or three weeks of unpaid vacation.
In Quebec, as stated above, vacation pay is based on average weekly earnings in the case of maternity
and paternity leaves or due to sickness, organ or tissue donation for transplant or an accident (that is
not work-related). Therefore, employers with employees in Quebec must do a special calculation in
these situations.

A brief overview of the calculation follows. For more details, see the section, “How to calculate the
indemnity,” with examples on the website of Quebec’s Commission des normes, de l’équité, de la
santé et de la sécurité du travail. The website is provided in Section 5: Resources.
The formula for calculating vacation pay for employees returning from a maternity, paternity,
sickness, organ or tissue donation for transplant or a non work-related accident leave in
Quebec:
• Multiply the average weekly wage by 2 or 3, depending on years of service.

• Multiply this amount by the total of the weeks worked during the year plus the maternity leave
(to a maximum of 18 weeks) or paternity leave (to a maximum of five weeks) or sickness (to a
maximum of 26 weeks).
• Divide this total by 52.
• The result is the vacation pay.
For example, an employee is entitled to two weeks of vacation. Her regular average weekly
earnings are $1,000, and she worked 20 weeks before beginning 18 weeks of maternity leave.
• $1,000 X 2 = $2,000
• $2,000 X (20 + 18) = $76,000
• $76,000 ÷ 52 = $1,461.54 in vacation pay owed
Employers should always refer to their organization’s internal policies, procedures, collective
agreements and individual employment contracts. In some cases, no matter the jurisdiction,
employers may be required to calculate a vacation pay accrual for an employee on maternity,
paternity or parental leave if such provisions exist in their internal policy. Employers should seek legal
counsel if they are uncertain how their policies may be interpreted in each of the various jurisdictions
in which they operate.
It is important to note that employers cannot change standard practice for an employee who is or
was on leave to better suit them financially. To do so would constitute discrimination. Case law has
determined that employment/labour standard boards interpret legislation in certain instances in this
manner.
To ensure compliance, the payroll system must be set up to track vacation entitlement and other
leave entitlements such as maternity, paternity, and parental leaves.

VACATION PAY UPON TERMINATION
In general, vacation pay is paid when employees take their vacation time or terminate their
employment, whichever comes first. In the event of termination, the amount of vacation to be paid
is determined as follows:
For employees who have not yet become entitled to paid vacation leave (because, for example, they
were employed for only part of the vacation reference year):
• An amount equal to 4 per cent* of the vacationable earnings earned during the period of
employment.
For employees who have become entitled to a paid vacation leave:
• An amount equal to 4 per cent* or 6 per cent* of the vacationable earnings earned during the
previous vacation reference year, less any vacation pay already paid out for that reference year;
plus
• An amount equal to 4 per cent* or 6 per cent* of the vacationable earnings earned during
the current vacation reference year from the employee’s last vacation entitlement date to the
termination date.
*Note: The percentage to be applied is determined by the jurisdiction in which the employee works. Instead
of a percentage, The Saskatchewan Employment Act dictates an amount equal to 3/52 or 4/52 of the
vacationable earnings. Where an employer has defined a greater benefit, such as a higher vacation accrual
percentage, that benefit must be honoured.

For example, an employee is terminated effective March 28 of the current year. The company’s
vacation year is based on the calendar year. The employee had taken one week of their vacation
entitlement, paid at $500.
Upon termination, the employee’s vacation pay entitlement is calculated as follows:
Prior Year Vacationable Earnings $26,000
Vacation Rate x 4 per cent
Vacation Indemnity $ 1,040
Vacation Indemnity Paid to Date $ 500
Remaining Vacation Pay $ 540
Current Year Vacationable Earnings to Date $ 6,500
Vacation Rate x 4 per cent
Vacation Pay Earned $ 260
Total Vacation Pay Owing on Termination $ 800
When an employee is terminated, an employer must pay all final wages within a specific timeframe.
In Section 2: Tables & Templates, Table 2.2 shows the requirements for paying wages upon
termination, emphasizing vacation pay, and Template 2.9 is a vacation reconciliation worksheet.
DEDUCTIONS FOR OVERPAYMENTS OF VACATION PAY
Most jurisdictions in Canada have legislation that addresses an employer’s right to recover amounts
previously paid. These fall into two categories:
• Administrative errors
• Repayment of salary or wage
• Amounts paid by policy or employment contract with conditions
An employee receiving a payment they were not entitled to due to an error would be classified as an
administrative error.
An employer may also have a policy of allowing employees to receive their vacation in advance of
earning it, conditional on the employee repaying any amounts they received that they did not earn.
Table 2.7 in Section 2: Tables & Templates details the employer’s right to recover employee
overpayments for each situation.

VACATION REQUESTS
An integral part of the process of an organization’s protocol around vacations is an effective vacation
request process that protects both the employee and the employer.
A vacation request form can assist employers in ensuring their records and those of their employees
match. For instance, the number of days the employee is entitled to, how many days are being
requested, and the employee’s outstanding entitlement for the remainder of the reference year.
Many employers utilize a time and attendance system to monitor and track vacation entitlement and
process employees’ time off requests.
When an employer has a policy of granting vacation in advance, an employee acknowledgement

should be included on the vacation request form. This will help avoid later disputes, especially where
a vacation advance becomes repayable to the employer.
A sample online Vacation Request Form can be found in Section 2: Tables & Templates.
ESTABLISHING A VACATION POLICY
A standardized procedure for vacation requests is important. Equally important is a vacation policy
stating how vacation is handled that is communicated to employees (likely through an employee
handbook containing other organizational policies).
A vacation policy that is properly documented and communicated results in three important
benefits:
• Provides consistency across all departments of an organization.

• Establishes a process that is viewed to be fair.
• Reduces the number of repetitious questions about the policy or procedure.
When developing your organization’s vacation policy, keep the following in mind:
• Ensure that it is clear and concise.

• Include exactly how much vacation time and pay employees are entitled to receive. One of the
policy objectives should be to minimize the possibility of future legal challenges.
• Outline when employees can take their vacation time and how the vacation will be scheduled.
• State what happens to unused vacation time, such as carry-over and use-it-or-lose-it provisions.
• Indicate when and how vacation pay will be remitted to employees.

Remember that no employee can lose the right to legislated minimums, regardless of what an
organization’s policy stipulates. An organization can allow an employee to carry over a maximum
number of days, but that can never infringe on the legislated minimums laid out by employment and
labour standards within a particular jurisdiction.
For example, in a jurisdiction where the legislated minimum is two weeks, an employer can stipulate
that an employee with a greater right or benefit of four weeks of vacation can carry over a maximum
of five days. At the end of the year, if an employee has only taken two weeks of vacation, they can
carry over five days and lose their right to the extra week of time and pay.
Note: Some jurisdictions (British Columbia, Manitoba, Northwest Territories, Nunavut, Newfoundland
and Labrador) do not allow employers to implement a use-it-or-lose-it policy. Therefore, employers would
be wise to obtain legal counsel if they consider implementing these provisions in their company policies or
collective agreements.
Employers should be very cautious and spell out their policies and some of the resulting
consequences. An example such as the one above is a good way to do that.
10 Tips for Effective Vacation Policies
The following tips for effective vacation policies can be adapted to formulate vacation policies.
1. Documentation: Have a written vacation policy that is applied fairly and consistently. An
employment contract or employee handbook is a good place to provide this. Employees should
acknowledge in writing that they understand the policy.
2. Entitlement: Clearly state how employees earn vacation time and when they will be eligible to
request vacation leave. For example, is the full vacation entitlement allocated to employees at the
start of each reference year, or do employees earn a portion or percentage of the annual total paid
time off each pay period or month? A good way to deal with this is to list the available earned
vacation balance on the employee’s pay statement or make it available online in the time &
attendance system or company intranet site.
3. Calculation: Clearly state how vacation pay is calculated. When offering vacation leave in excess
of the minimum standards, define how vacation pay will be calculated. Will it be calculated
using the corresponding percentage (2 per cent per week of leave) or as the greater of a specified
number of weeks of regular salary/wage and the minimum percentage required per employment/
labour standards legislation.
4. Scheduling: Communicate to employees how vacation time should be requested. Define
any peak business periods when vacation will not be permitted. Have an effective and well-
documented request process.
5. Length of leave: Clearly state if vacation leave will be granted in periods of days or complete
weeks and if there is a maximum number of consecutive weeks permitted for a single leave.

6. Advancing vacation time: Employers do not have to grant vacation until it has been earned.
In most jurisdictions, employment/labour standards do not permit an employer to offset the
amount of unearned vacation previously paid to an employee against the wages or salary
earned through the termination date without written authorization. Stipulate in your policy or
on a vacation request form if advances are permitted and how the advance will be repaid if the
employee terminates before earning the vacation time.
7. Carry-forward option: Advise whether there are vacation caps, whether time may be carried
over from year to year, whether the employer will buy back unused vacation at the end of each
year, or whether the vacation is subject to a use-it-or-lose-it provision (such policies are not legal
in terms of legislated vacation).
8. Payout upon termination: Clearly define that the vacation payout for terminating employees
will be equal to previously earned/accrued vacation at the termination date.
9. Review: Periodically review your vacation policy to ensure it is clear and implemented correctly.
If a change in employment/labour standards minimum requirements occurs, make sure your
policy is still compliant.
10. Communication: Regular, ongoing communication with employees and management
about vacation policies will help ensure that everyone understands the rules and that they are
consistently applied to all employees.
Remember, because each company is different and the possible combination of circumstances
countless, it is important to confirm ideas with the employment/labour standards laws for your
jurisdiction(s) and with a legal advisor to ensure you are in compliance with legislation and common
law precedents.
It is better to be one step ahead of the game than to realize that being complacent has caused the
organization undue legal hardship.
Also, remember that the Institute’s Payroll InfoLine is at members’ disposal for complex and not-so-
complex issues.

EMPLOYEE DONATION OF VACATION
Employees may ask their employer if it is possible to forgo some of their vacation days and donate
that paid time off to another employee experiencing a personal or family hardship.
From an employment/labour standards perspective, employees must still receive their legislated
vacation time and pay. A donation will only be permitted out of a greater benefit if that is provided.
From a taxation perspective, the CRA has a tax interpretation (T.I. 2013-0514321E5) that provides
guidance for employers.
Generally, income earned by an employee (the doner) is taxable and reportable for that employee.
Any vacation they choose to donate to another employee would be included in their taxable income,
subject to statutory withholding. Essentially, the co-worker’s donation would be from the net pay
proceeds.
In most cases, the recipient (the doner) would be seen as receiving a philanthropic or voluntary
donation, not based on employment factors. That amount would not be considered income for the
recipient.

SECTION 2: TABLES & TEMPLATES
TABLE 2.1: MINIMUM VACATION TIME & PAY REQUIREMENTS
ENTITLEMENT VACATION PAY (PERCENTAGE

JURISDICTION LENGTH OF ANNUAL VACATION
PERIOD OF VACATIONABLE EARNINGS
• Two weeks
Federal
• Three weeks after five consecutive • 4%
(Canada Labour
years 10 months • 6% after five years
Code,
• Four weeks after ten consecutive • 8% after 10 years
Part III)
years
• Two weeks
• 4%
Alberta • Three weeks after five years 12 months
• 6% after five years
(anniversary date)
• Two weeks • 4% after five calendar days of

British Columbia • Three weeks after five consecutive 12 months employment
years • 6% after five years
• Two weeks
• 4%
Manitoba • Three weeks after five consecutive 10 months
• 6% after eight years
years
• Two weeks
• 4%
New Brunswick • Three weeks after eight continuous 4 months
years
• Two weeks
Newfoundland and • 4% after five workdays
• Three weeks after 15 continuous 10 months
Labrador • 6% after 15 years
years
• Two weeks
Northwest
• Three weeks after six and • 4%
Territories/ 6 months
subsequent years of employment • 6% after six years
Nunavut
with the same employer
• Two weeks
• 4%
Nova Scotia • Three weeks after eight continuous 10 months
years
• Two weeks
• 4%
Ontario • Three weeks after five consecutive 10 months
• 6% after five consecutive years
years
• Two weeks after 12 continuous

Prince Edward months • 4%
4 months
Island • Three weeks after eight continuous • 6% after eight years
years
• Two weeks
• 4%
Quebec • Three weeks after three 12 months
• 6% after three years
uninterrupted years of service
• Three weeks
• 3/52
Saskatchewan • Four weeks after 10 continuous 12 months
• 4/52 after 10 years
years
• Two weeks after 12 consecutive • 4% after 14 consecutive days of

Yukon 10 months
months employment

TABLE 2.2: EMPLOYER OBLIGATIONS REGARDING VACATION
NOTICE TO EMPLOYEE HOW VACATION TIME FRAME FOR VACATION PAY UPON
JURISDICTION
TO TAKE VACATION MUST BE TAKEN ISSUING VACATION PAY TERMINATION
Federal Two weeks Not specified Within 14 days preceding Upon termination or no
(Canada Labour vacation, during vacation, or later than 30 days
Code, soon after vacation
Part III)
Alberta Two weeks Unbroken or No later than the next Within ten consecutive
periods of at least scheduled payday days after the end of
one day the pay period in which
termination occurred,
Vacation time may or 31 consecutive days
be taken in half after the last day of
day increments if employment.
the employer and
employee agree. The employer may choose
whichever option best
suits their needs.
British - Periods of a least Within seven days preceding Within 48 hours (or
Columbia one week unless the vacation or, with a written where the employee quits,
employee requests agreement, on employee’s within six days)
shorter periods next scheduled payday
Manitoba 15 days Periods of at least By the day preceding Within ten working days
one week unless the vacation or, with a written
employee requests agreement, on employee’s
shorter periods next scheduled payday
New Brunswick One week Not specified By the day preceding Within 21 days
vacation
Newfoundland Two weeks 1 unbroken period, By the day preceding Within one week of the
and Labrador or two or three vacation date of termination
unbroken periods
of one week unless
the employer agrees
to an employee’s
written request for
shorter vacation
periods
Northwest - Not specified By the day preceding Within 10 days of the
Territories/ vacation date of termination
Nunavut
Nova Scotia One week One unbroken By the day preceding Within 10 business days
period, or two vacation
or more periods
with at least one
unbroken week
Ontario Reasonable notice Periods of at least 1 On or before the payday Within 7 days after the
week. for the period in which the date of termination or
vacation falls the day that would have
Shorter periods are been the employee’s next
permitted upon payday, whichever is later
written request
by the employee
with the employer’s
approval.

NOTICE TO EMPLOYEE HOW VACATION TIME FRAME FOR VACATION PAY UPON
JURISDICTION
TO TAKE VACATION MUST BE TAKEN ISSUING VACATION PAY TERMINATION
Prince Edward One week Unbroken At least one day before the No later than the end
Island vacation begins of the next regular pay
period
Quebec Four weeks One or two Before the beginning of the Upon termination
unbroken periods. vacation In Quebec, the Act also
More than two permits an employer
periods are allowed to pay the indemnity
with the employee’s on the next regular
request and if the payday following the
employer agrees. termination.
If the employee
has only one week
or less of annual
vacation, it may not
be divided.
Saskatchewan Four weeks One unbroken Within 14 days preceding Within 14 days of
period or periods of vacation termination
at least one week
Yukon – Not specified By the day preceding Within 7 days of

vacation termination

TABLE 2.3: VACATION POLICIES PERMITTED BY JURISDICTION
USE-IT-OR-LOSE-
VACATION PAY ON WAIVING OF LEGISLATED
JURISDICTION IT POLICY ON THE
EACH PAY CHEQUE VACATION TIME
GREATER BENEFIT
Federal No May lose the time but Yes, with a written agreement
(Canada Labour not the money
Code,
Part III)
Alberta Yes Yes, as long as it is No

addressed in the
employment contract,
and the employee is
aware of it before it is
earned
British Columbia Yes No. An employee has to No
be paid what the greater
benefit stipulates and
given the appropriate
time off.
Manitoba Yes No. An employee has to No. Employers must ensure employees
be paid what the greater take their vacation time and pay.
benefit stipulates and
given the appropriate
time off.
New Brunswick Yes Yes, as long as it is No
addressed in the
employment contract,
and the employee is
aware of it
Newfoundland and Yes, but this is primarily for part-time or May lose the time but Employers should contact the
Labrador casual employees not the money Employment Standards Office for
approval
Northwest Yes No. Employees cannot Yes, as long as a written agreement

Territories/ be given less than is between the employer and the employee
Nunavut promised to them via an is filed with the Employment Standards
employment contract. Officer for permission
Nova Scotia Yes Yes. There is nothing in Yes, for employees who work less than
the current legislation 90% of regular working hours during
to prevent an employer the 12-month vacation period
from instituting a use-it-
or-lose-it policy for the
greater benefit.
Ontario Yes Yes. There is nothing in Yes, as long as the written agreement
the current legislation between the employer and the
to prevent an employer employee is filed with the Director of
from instituting a use-it- Employment Standards for permission
or-lose-it policy for the
greater benefit.

Prince Edward Yes, for seasonal or short-term employees Yes, there is nothing in Yes, for employees who work less than
Island the current legislation 90% of regular working hours during
to prevent an employer the 12-month vacation period
from instituting a use-it-
or-lose it policy for the
greater benefit.
Quebec No, except where it is warranted by Yes, if communicated to No, except if a collective agreement or
the employee’s seasonal or otherwise employees decree contains such a provision. The
intermittent employment activities. third week can be paid in cash if the
business closes for 2 weeks during the
annual vacation.
Saskatchewan Yes. However, if an employee does not The employer can Yes, as long as a written agreement
want to be paid vacation pay on each pay institute a use-it-or-lose- between the employer and the
cheque the employer cannot enforce it. it policy for the time but employee is filed with the Director of
not the money. Employment Standards for permission
Yukon Yes Yes, if communicated to Yes, as long as an agreement is made
employees between the employee and the employer
TABLE 2.4: VACATIONABLE EARNINGS BY JURISDICTION
Payroll professionals are advised to review the most current requirements of each jurisdiction’s
employment or labour standards act. For a listing of the most recent Vacationable Earnings Chart,
click on the following tile.
DETAILED VACATIONABLE
EARNINGS CHART

TABLE 2.5: ACCRUAL OF VACATION TIME AND PAY WHILE ON LEGISLATED
LEAVE
JURISDICTION MATERNITY OR PARENTAL LEAVE OTHER LEGISLATED LEAVE OF ABSENCE
Federal Discretion of employer to allow unpaid time, Discretion of employer to allow unpaid time, as no
(Canada Labour Code, as no vacation earnings are being earned vacation earnings are being earned
Part III)
Alberta No, vacation accrues to the date of leave No, vacation accrues to the date of leave
British Columbia Time is accrued, but vacation pay is accrued Time is accrued, but vacation pay is accrued only if it
only if it is a company policy to do so. is a company policy to do so.
Manitoba Time is accrued, but vacation pay is accrued Time is accrued, but vacation pay is accrued only if it
New Brunswick No, vacation accrues to the date of leave No, vacation accrues to the date of leave
Newfoundland and Labrador No, vacation accrues to the date of leave No, vacation accrues to the date of leave
Northwest Territories/ No, vacation accrues to the date of leave No, vacation accrues to the date of leave
Nunavut
Nova Scotia No, vacation accrues to the date of leave No, vacation accrues to the date of leave
Ontario Time is accrued, but vacation pay is accrued Time is accrued, but vacation pay is accrued only if it
Prince Edward Island It is not addressed, but if an employee wishes It is not addressed, but if an employee wishes to take
to take unpaid vacation time the Employment unpaid vacation time the Employment Standards
Standards Officer may allow it. Officer may allow it.
Quebec Yes, for time. Special calculation of vacation Yes, for time. The absences of 26 weeks or less that
pay for employees on maternity or paternity do not reduce the calculation of the annual leave
leave (parental leave is excluded) indemnity are as follows: *absence owing to illness or
non-work-related accident or injury, including organ
or tissue donation for transplant, domestic violence or
sexual violence suffered by the worker.
Saskatchewan Time is accrued, but vacation pay is accrued Time is accrued, but vacation pay is accrued only if it
Yukon Time is accrued, but vacation pay is accrued Time is accrued, but vacation pay is accrued only if it

TABLE 2.6: RECOVERY OF ADMINISTRATIVE ERRORS OR ADVANCES NOT
EARNED
JURISDICTION ADMINISTRATIVE ERROR ADVANCE NOT EARNED
Federal An employer may deduct overpayment of An employer may deduct overpayment of wages, as this
(Canada Labour Code, wages. S.254.1(2)(d) money was not earned by the employee. S.254.1(2)(d)
Part III)
Alberta Employers don’t need written authorization Employers don’t need written authorization from
from the employee for this type of deduction. the employee for this type of deduction. However,
However, employers must provide employees employers must provide employees with written notice
with written notice before they make the before they make the deduction for the vacation
deduction for the overpayment. payment. S 12(2)(a2)
Employers can only deduct for errors that

occurred within six months prior to the
deduction.
For overpayments that occurred prior to

November 1, 2020, deductions must include
written authorization from the employee as
per the previous rules. S 12(2)(a.1)
British Columbia An employer may not deduct overpayment An employer may reduce an employee's annual
of wages without written consent from the vacation or vacation pay because, at the written request
employee. S.21, 22 of the employee, the employer allows the employee to
take an annual vacation in advance. S.59(2)
Manitoba Employers can correct any payroll errors An employer should have a written and signed policy
as soon as the employee or employer that vacation pay paid in advance will be deducted
notices them. Failing to deal with the error from final pay.
immediately could be considered agreeing
to a new wage. Employees and employers
should agree on how and when to make
the correction, such as paying in regular
instalments or one lump-sum.
If employers and the employees cannot agree

on how and when the payroll error will be
corrected, employers can deduct the amounts
equal to what would be allowed if they had a
garnishment under The Garnishment Act, i.e.,
no more than 30% of net pay, with employees
receiving at least $250/month if single and
at least $350/month if the employee has 1 or
more dependents.
New Brunswick The Employment Standards Act does not An employer should have a written and signed policy
expressly set out the conditions under which that vacation pay will be deducted from final pay.
an employer may deduct monies from an
employee’s wages. However, the Labour and
Employment Board has established criteria in
this regard.
Employers should contact the Employment

Standards Branch before making any
deduction to an employee’s wages other
than those regulated by law (Employment
Insurance, Canada Pension Plan and court
ordered).
Newfoundland and Labrador An employer may deduct overpayment of An employer may deduct overpayment of wages.
wages. S.36(3) S.36(3)

JURISDICTION OVERPAYMENT OF REGULAR WAGES OVERPAYMENT OF VACATION PAY
Northwest Territories/ Nunavut An employer may not deduct overpayment An employer should have a written and signed
of wages without written consent from the policy that vacation pay will be deducted from
employee. final pay.
Nova Scotia Administrative position: The employer An employer may deduct the overpayment if a
may deduct overpayment of wages, but written policy exists; otherwise, the employee
the employee’s pay cannot be less than the has the right to complain to the Minister of
minimum wage. Labour and Advanced Education.
Ontario Administrative position: If payment was made With written permission or signed agreement
in error, the overpayment could be deducted prior to advance payment
from future wages. Special rules apply to
commission automobile sales section. Refer to
regulation 285/01 3.28.
Prince Edward Island Administrative position: an employer may An employer can deduct overpayment of
deduct overpayment in a reasonable time frame, vacation pay paid as a result of a previous
such as the next pay or a few pays thereafter, advance of vacation pay to the employee.
with the employee’s authorization in writing Reg.1(e)
Quebec Administrative position: If an employer can An employee and employer can have an
prove that they have overpaid an employee, agreement in writing to allow the employer
then the employer can take the money back to deduct the overpayment if the employee
without the employee’s permission chooses to pay back the employer.
Saskatchewan Administrative position: Employer may deduct An employer should have a written, signed
overpayment in a reasonable time frame, such policy that vacation paid in advance will be
as the next pay or a few pays thereafter. deducted if termination occurs before it is
earned. S.76
Yukon An employer may not deduct overpayment An employer may not deduct overpayment of
of wages without written consent from the vacation pay without written consent from the
employee. employee.

TEMPLATE 2.7: ONLINE VACATION REQUEST EXAMPLE
TEMPLATE 2.8: VACATION REQUEST FORM
Vacation Request Form

Please submit this form for approval at least ____ weeks in advance of your preferred vacation dates.
Date: ________
Employee Name: ________
Title: ________
Department: __________
Vacation Days Earned: _________
Vacations Dates Requested: ___/___/____ through ___/___/____
Returning: ___/___/____
Total Number of Days Requested: __________
________________________ Date ___________

Signature of Employee
Approval:
________________________ Date ___________

Manager

TEMPLATE 2.9: VACATION PAY RECONCILIATION
Employee Name: _______________________________
Vacation Reference Year: _________________________
Vacation Time
Vacation time earned but not taken before the start of a new
vacation year
Vacation time earned in the current vacation year +
Vacation time earned in the current vacation year -
Balance of vacation leave (weeks or days) available =
Vacation pay
Vacation pay balance from the prior year (See prior year statement
$
for details)
Vacation pay accrued in the current year
Vacationable earnings
$
$ + $
$
Total vacationalble earnings $
Vacation accrual rate X _______%
Vacation earnings paid in the current year - $
Balance of accrued vacation pay = $

SECTION 3: QUESTIONS & ANSWERS BY TOPIC
VACATION TIME
1. Can an employee voluntarily waive their right to vacation time and just receive their
vacation pay?
Under certain circumstances, some jurisdictions may permit an employee to waive their right to
their legislated vacation leave and only receive the vacation pay. Generally, this requires approval
from the relevant Director of Employment/Labour Standards. The merits of each request will be
determined on a case-by-case basis.
Refer to Question #7 in Questions by Jurisdiction.

2. When employees work substantial overtime, do we increase the number of vacation days
based on accrued vacation pay?
Vacation time does not increase or decrease based on the amount of vacation pay an employee
has accrued.
Depending on the types of earnings an employee receives during the year, a week of vacation
pay could be greater than a normal week of salary or wage. The opposite could also happen; the
vacation pay accrued could be lower if an employee takes unpaid leave for some portion of the
year.
In either case, vacation time does not increase or decrease. The employee should be granted their
standard number of weeks of leave.
3. If an employee uses a vacation day on their last day of employment, what date do we record
as the last day paid on the ROE?
It is important to know that when the employer is terminating employment, the vacation
entitlement cannot be used as part of the legislated notice period.
In situations other than the notice period, it is up to the employer to decide whether employees
can take paid vacation time during their last days of employment.
For ROE purposes, when an employee is allowed to take paid vacation time on their last days of
employment, the last day for which paid (Block 11) is the last day paid vacation time was taken.
Both vacation hours and vacation pay are insurable and reported on the ROE in Blocks 15A and
15B, respectively.
However, when the employer does not allow an employee to take such vacation time, the
employee will receive a lump-sum vacation payment. The last day for which paid (Block 11) is

the last day the employee was paid (usually, the last day worked). Only vacation pay is insurable
(there are no insurable hours). It is reported in Blocks 15B and 17A of the ROE.
4. What is the difference between personal days and vacation days? Can we lump them
together and call it paid time off (PTO)?
Each jurisdiction has legislation that provides employees with annual leave and pay for
vacation. A company policy may provide for paid leave from work and vacation time, such as
personal days. These leaves are distinct from vacation time and should not be treated the same.
Additionally, in some jurisdictions, an employer cannot schedule an employee’s annual vacation
in periods of less than one or two weeks.
Additionally, leaves of a personal nature are legislated in some jurisdictions per employment/
labour standards. Such leaves can be for bereavement, compassionate care of a family member,
personal emergency, family responsibility or sickness.
To ensure compliance, employers should maintain records that track each leave separately.
5. Can we grant vacation leave earlier than the legislated entitlement period?
The entitlement period legislated in each jurisdiction is the maximum period after vacation has
been earned in which the employee must be granted their leave and paid vacation pay. These
periods range from four to twelve months.
According to company policy, an employer may always provide a greater benefit and allow
employees to take their vacation earlier than required under legislation.
VACATION SCHEDULING
1. Can an employer block or deny vacation requests during a certain period due to operational
demands?
In all jurisdictions, the employer has the right to decide when the vacation time can be taken but
must give the employee adequate notice (ranging from 24 hours to four weeks).
An employer may have certain timeframes when employees cannot take a vacation because
of operational requirements. In that case, it is best to state your vacation policy and clearly
communicate those periods to employees. For instance, employees in a finance department may
not be able to schedule vacations during the company’s fiscal year-end period.

2. If an employee resigns and says they will take their two weeks of vacation during their
notice period, are we obligated to approve that vacation request?
In all jurisdictions, an employer has the right to approve or deny a vacation request. In the case
of an employee resignation, there may be a business requirement for that employee to remain at
work to transition their duties to someone else.
If there is no business requirement to remain at work physically, the employer could either:
• approve the employee’s vacation request and process their termination at the end of the
vacation leave; or
• accept the employee’s resignation effective immediately and pay the notice period plus any
accrued vacation pay.
3. Is an employer obligated to permit vacation in half-day increments if an employee requests
it?
Very few jurisdictions legislate vacation time in less than one-week increments. Those who do
legislate periods less than one week typically allow employees to take vacation time in one-
day increments. Therefore, an employer is not required by law to approve vacation in half-day
increments; however, where permitted, the employer may choose to grant this at their discretion.
4. If an employee has not submitted a request for vacation leave, can the employer assign a
vacation period and place the employee on vacation leave?
The employer has the right to decide when the vacation will be taken but must give the employee
adequate notice (ranging from 24 hours to four weeks, depending on the jurisdiction). It is also
the employer’s responsibility to ensure that the employee does take a vacation.

5. If an employee does not take all their legislated vacation for the year, is it okay to carry that
additional time forward to the next vacation year?
An employer must ensure that employees take their legislated vacation leave within the
entitlement period defined under the applicable employment/labour standards legislation. The
only exception is when an employee takes another type of legislated leave, allowing them to
postpone vacation until the other leave ends.
When an employer provides a greater benefit, the legislation may allow the employer to establish
a carry-over policy that applies only to that greater benefit.

VACATION PAY
1. When employees accrue additional vacation pay due to overtime or bonuses, how do we
determine what to pay each time they request leave? Should we pay out the bank on a ‘first
in, first out’ basis or determine an average day of pay based on the current accrual?
In all jurisdictions and for all employees, vacation pay should be based on the employee’s total
vacationable earnings earned during the vacation reference year. When on vacation leave, the
employee is entitled to vacation pay proportional to the number of vacation days. For instance,
if the employee has accrued $2,400.00 and is entitled to three weeks of vacation, they would
receive $800.00 during each vacation week.
When an employer allows employees to take a vacation in the current year, as it is being accrued,
they may establish a policy of basing the vacation pay on the current accrual.
An employer may even choose to be more generous and allow vacation to be paid in advance;
however, it is recommended that the policy explain any requirements to repay amounts received
that were not earned.
2. Can we assume paying an employee their regular salary during vacation leave is sufficient
without maintaining an accrual?
Vacation pay is calculated as a percentage of vacationable earnings in all jurisdictions except

Saskatchewan, which calculates it as a fraction of vacationable earnings. Paying employees their
regular salary during vacation may not provide for the full legislated vacation pay. Therefore,
if you choose to pay regular salaries to your employees during their annual vacation, you must
reconcile the amounts your employees received during their vacation time with the legislated
vacation pay.
3. Are we required to show vacation pay on an employee’s pay statement?
In Alberta, Newfoundland and Labrador, Prince Edward Island, Quebec, and Saskatchewan, the
vacation pay must be shown on the pay statement.
In British Columbia, other earnings, such as vacation pay, must be identified on the pay
statement.
In Ontario, the legislation does not require vacation pay to be itemized on the pay statement.
However, Ontario does require employers to maintain a special statement regarding vacation pay
if this information is not included in the pay statement. Employees may request this information
in writing, and the employer must produce a statement no later than seven days after the request
is made or the first pay date after the request, whichever is later.
In all other jurisdictions, vacation pay does not need to be identified; however, it is a good

practice to do so. A separate recording of the time taken must be available in case of any
employment/labour standards inquiries.
The National Payroll Institute provides a Pay Statement Guideline, publically accessible on
payroll.ca/payroll-guidelines.
4. We pay our employees their regular salary when they take a vacation and then complete a
reconciliation at the end of the vacation year. Is there a specific timeframe for any additional
vacation pay owing to be paid?
The legislation in each jurisdiction sets out a time frame in which vacation time and pay must
be taken and paid according to when it was earned. Employees should receive their legislated
vacation pay within this period.
For vacation pay in excess of the legislated minimum, it is common practice for employers to
establish in their policy a scheduled payout date for the excess vacation pay to be calculated,
reconciled and paid out. This is often done at the end of a reference year with the intention of
starting the new reference year at zero.
5. We have employees in several provinces. As an employer, can we establish a standard policy
for vacationable earnings that applies to all employees in all provinces?
Each province and territory has established a definition of vacationable earnings. While regular
salary or wages is universally considered vacationable other earnings such as overtime or
previously paid vacation may or may not be included in all jurisdictions.
An employer wishing to establish one single definition of vacationable earnings would need to
ensure that employees receive no less than the legislated requirement of their jurisdiction. This
may mean employees in other jurisdictions would be receiving a greater benefit.
VACATION ENTITLEMENT
1. Our company introduced a four-day compressed workweek for employees. Some employees
believe that vacation entitlement is based on our standard business week of five days and
expect 15 days of vacation in their bank. How many vacation days are they entitled to under
employment standards legislation?
Employment/labour standards legislation defines vacation leave as a number of weeks each year.
There is no fixed number of days or hours attached to a vacation week; this would be determined
based on an employee’s normal (or average) workweek.
For instance, if an employee normally works four days per week and is entitled to three weeks of
vacation, they would be entitled to 12 vacation days (4-day workweek x 3 vacation weeks).

If you allow employees to use vacation in periods less than a week, then total vacation hours
would be based on the employee’s normal workweek multiplied by weeks of vacation leave. For
instance, 40 hours per week x 3 vacation weeks would be 120 vacation hours.
2. We pay our part-time employees vacation pay each pay period. Are they still entitled to take
vacation leave?
Employment/labour standards legislation dictates whether paying vacation pay each pay period is
allowed and an employee’s right to vacation leave. In some jurisdictions, specific exceptions may
apply.
Refer to Questions #5 and #6 in Questions by Jurisdiction.
3. If we offer an employee three weeks of vacation and 6per cent vacation pay at hire, but the
employee terminates within six months, can we default and pay the minimum 4 per cent
accrual?
When a contract of employment or company policy provides a greater benefit, that greater
benefit must be honoured.
As a result, if the contract or policy does not state otherwise, the organization must provide the
individual with the greater benefit upon termination.
However, provided the organization does not operate in British Columbia or Manitoba (where
any greater benefit must always be provided), the vacation policy can state that the vacation pay
will revert to the legislated minimum if the employee terminates before completing one year of
service. The employee could be paid 4 per cent if they terminate before completing one year of
service.
If the employee was in Saskatchewan, the minimum entitlement is three weeks with vacation pay
of 3/52 of vacationable earnings.
4. Our employees are entitled to vacation from the date of hire. However, we do not advance
vacation pay; they may only request what is available in the accrual. Employees may
schedule an unpaid vacation early in the year, and subsequent vacation leave may have a
substantial payout based on the accrual balance. Is this acceptable?
An employer is not obligated to advance vacation pay to employees. When a policy allows
employees to take their vacation before earning it, it may allow the time off but limit the
vacation pay to the accrued amount. As long as employees receive their full vacation accrual
within the entitlement period, this policy is allowed.

5. We want to change our vacation reference year to a common anniversary date for all
employees. How should we convert vacation from each employee’s anniversary date to our
new common vacation year?
The key to changing an existing policy or employment contract is to give employees as much
notice as possible.
Once the new common vacation year is determined, each employee will have a pro-rated
vacation entitlement for the period between their anniversary date and the start of the new
common vacation year.
For example, an employer decides to change all employees to a common vacation year, which
will be the calendar year. An employee’s anniversary date is July 1st, at which time they’ve earned
two weeks of vacation leave and 4 per cent vacation pay. In this example, the employee will
also be allocated a pro-rated entitlement of one week and 4 per cent of earnings between July
and December. Going forward, they will now accrue based on the new vacation reference year
starting in January following this transition.
BONUSES AND COMMISSION
1. If a bonus is tied to 50 per cent company performance and 50 per cent employee
performance, would it be considered a vacationable earning?
Bonuses tied to performance, especially when stipulated in the employment contract, are
included as part of vacationable earnings in most jurisdictions. The exception is Newfoundland
and Labrador, where all types of bonuses are excluded from the accrual.
2. Are signing bonuses or retention bonuses considered vacationable earnings?
A bonus payment must be tied to hours of work, production or efficiency to be vacationable,

as stipulated by employment/labour standards. In some circumstances, signing and retention
bonuses may be linked to the hours of work, in which case they are vacationable earnings.
For example, let’s consider a signing bonus given to a new hire on the condition that the
employee remains employed for a minimum period of two years and that the employee must
repay the bonus to the employer should they terminate employment before the two-year period
is up. Such a signing bonus is related to the hours of work and is considered vacationable
earnings.
On the other hand, consider a new hire given an unconditional signing bonus. The employee

can keep the bonus regardless of the length of time they remain employed with the organization.
Such a bonus is not tied to the hours and is not subject to vacation pay.
3. Can our policy indicate that any bonus or commission payments include vacation pay?
In recent years, former employees have initiated lawsuits claiming they were underpaid vacation
entitlements because bonus or commission payments were not treated as vacationable earnings.
Although a variable compensation plan, bonus or commission can be inclusive of vacation pay –
it must be explained and agreed upon with the employee. Additionally, the employees should be
provided with a breakdown of amounts with the vacation pay identified.
For commission employees, the amount reported on the T4 slip in Code 42 or the RL-1 slip in
Box M should only be the portion that represents the commission.
Employers should also be prepared to show evidence of the agreement with the employee
and make the details of payments available to an employment standards officer or the court if
required.
4. We pay our commission salespeople their regular base salary when they take a vacation and
then pay out any additional accrual on commission at the end of the vacation year. Is this an
acceptable practice?
The legislation in each jurisdiction sets out a time frame (entitlement period) in which vacation
time and pay must be taken and paid according to when it was earned. Employees should receive
their legislated vacation pay within this period.
For ease of administration, it is not uncommon for employees with a fixed salary to receive that
payment when they take a vacation and then receive a final payout of their vacation accrual.
5. If a sales employee receives a commission after termination, are we also required to pay
vacation pay?
If based on the jurisdiction of employment, commission payments are vacationable, then

payment of outstanding commission paid after termination would also be subject to a vacation
accrual that must be paid simultaneously.

VACATION POLICY
1. Our company recently became unionized. Does the collective agreement take precedence
over our existing vacation policy?
Union agreements take precedence over employment standards as long as they meet the
minimum requirements.
2. We have employees in two jurisdictions and have developed policies specific to each
jurisdiction. Is an employer permitted to have multiple vacation policies?
It is at the organization’s discretion to determine which vacation policies will be applicable within
specific jurisdictions as long as the minimum standards are followed. An organization is entitled
to have a policy specific to each province or territory in which they operate.
3. We want to implement a use-it-or-lose-it policy for vacation. Are there any legislative
compliance issues with this type of policy?
First, it is important to note that British Columbia, Manitoba, Northwest Territories and
Nunavut do not allow an employer to implement a use-it-or-lose-it policy.
Additionally, although an employer can, in some cases, implement a use-it-or-lose-it policy, the
legislation in some jurisdictions indicates only the time will be lost, and the employee will still be
entitled to payment of the full accrual of vacation pay. See Table 2.3 in section 2.
For all jurisdictions, an employee never loses their right to their legislated entitlement, regardless
of what an organization’s policy stipulates. An organization can allow an employee to carry over
a maximum number of days, but that can never infringe on the legislated minimums laid out by
employment/labour standards within a particular jurisdiction.
For example, in a jurisdiction where the legislated minimum is two weeks, an employer can
stipulate that an employee with a greater benefit of four weeks of vacation can carry over a
maximum of one week. At the end of the year, if the employee has only taken two of their four-
week entitlement, they can carry over one week and will lose one week.
Employers should be very cautious and effectively communicate their policies and some of the
resulting consequences. It would be wise to obtain legal counsel before implementing these types
of provisions in company policies or collective agreements.

4. We want to amend our vacation policy and eliminate the highest tier, which is currently six
weeks after 20 years of service. What should we be aware of when making a change such as
this?
If the amended policy applies to all employees, existing and new, employment contracts
would have to be amended and agreed upon by employees as this is a change in the terms and
conditions of employment.
An employee who does not agree to such a reduction in entitlement and quits, as a result,
may be able to prove constructive dismissal if the reduction is deemed significant to their total
remuneration.
Employers will often continue certain benefits or entitlements for employees already being
awarded them. In this case, an amended employment contract would not be required as the
change would not impact the grandfathered employees.
Employees hired after the effective date of the change would be provided with the amended
policy.
5. Our company is considering allowing employees to take their vacation in advance. We want
to establish a policy that would require an employee to repay any advance received but not
earned. What should we be aware of to ensure our policy is compliant?
An employer is not obligated to provide an advanced vacation to employees. In doing so, you are
offering a greater benefit.
Consider the risk of advancing vacation if an employee was to terminate before earning the
vacation pay they have already received. Even with a policy, it is not always possible to recover
overpayments.
As part of the vacation policy, include a clause on repayment of advances not earned.
Communication is key to ensuring employees requesting vacation in advance clearly understand
that they may be required to repay the employer.
In some jurisdictions, simply including language in the policy will not be sufficient. In some
cases, you must have an employee's written (or electronic) acknowledgement for each request for
advanced vacation, showing they agree that specific amounts received but not earned will become
repayable.
See Table 2.7 for jurisdictional rules on repayment of vacation.
To reduce the risk of overpayments not being recoverable, you may also consider limiting the
amount of vacation that may be taken in advance. For instance, the policy could state that
employees will only be allowed to take one week of vacation in advance of earning it.

If repayment of advanced vacation is required, it is also important to explain to employees that
they will be required to repay the gross amount of any advanced vacation not earned. The CRA
and Revenu Quebec classify this as repayment of salary or wage and require repayment of the
gross amount.
SECTION 4: QUESTIONS AND ANSWERS BY JURISDICTION
Federal jurisdiction (Part III of the canada labour code)
1. We manage vacation leave and pay based on each employee's anniversary date. When do we
begin accruing 8 per cent vacation pay?
Under Canada Labour Code, an employee is entitled to a vacation leave of three weeks
immediately following their ten anniversary. The vacation accrual of 8 per cent would be
calculated on the employee’s vacationable earnings for the 12 months immediately before the
10th anniversary.
2. We manage vacation leave and pay for all employees from January to December as a typical
vacation reference year. If an employee will reach their fifth anniversary in July of the
current year, when are they entitled to take three weeks' leave and receive vacation pay of 6
per cent?
The Canada Labour Code standards do not specify rules on providing vacation to employees
based on a typical 12-month vacation year. As a best practice, an employee’s vacation leave
should increase to three weeks for the vacation year in which their fifth anniversary occurs.
This ensures the employee will not receive a benefit less than what they would be provided
when vacation is based on their anniversary date.
3. When an employee schedules vacation, can we pay their vacation pay on the regular payday
during the leave, or are we required to pay it before the leave begins?
Under CLC, employees should receive their vacation pay within 14 days before the vacation
begins. However, paying it during or soon after the vacation is also acceptable.
4. Are employees allowed to schedule vacation by the day or as partial days? If so, how do we
determine the number of vacation days or hours an employee is entitled to take?
The federal standard requires vacation leave to be taken as one unbroken leave of two weeks
or one unbroken leave of three weeks for employees with five or more years of service and four
weeks leave for employees with tens or more years of service.
5. Are we allowed to pay vacation pay each pay period? If yes, are there any special rules we
must follow?

Paying vacation pay each pay is not permitted under Canada Labour Code.
6. Are part-time employees entitled to vacation leave? If yes, how do we determine the amount
of leave to provide?
Part-time employees are entitled to vacation leave of two weeks or three weeks after five
consecutive years of employment and four weeks after ten years of employment.
7. An employee has requested a payout from their legislated vacation accrual but does not
want to take vacation leave. Are we permitted to process this request, and what should we
be aware of when doing so?
Employees must be provided with their legislated annual vacation leave and vacation pay.
However, with a written agreement, an employee can postpone or waive the entitlement to an
annual vacation for a specific year. If the vacation is waived, the vacation pay must be paid no
later than 12 months after the specified year in question.
8. We provide vacation leave and pay in excess of the legislative standard. Once an employee
has taken leave and been paid the equivalent of the legislated vacation, can they request a
payout of the greater benefit with no leave taken?
An employer may establish a policy that provides a greater benefit. The policy can dictate the
treatment of any vacation time or pay greater than the legislated requirement. The employer’s
policy may include provisions such as:
• Waiving time off in lieu of pay for the greater benefit
• Vacation carry forward for the greater benefit
• Use-it or lose-it policy for the greater benefit
Employers can institute a use it or lose it on the vacation time but not on the vacation pay accrual.
9. As an employer, we would like to mandate one week of vacation for all employees during a
maintenance closure of our facility. Are we permitted to enforce a common vacation week
for all employees, and how much notice must we provide?
An employer has the right to schedule vacation leave for employees as long as they are provided
at least two week’s notice of when their vacation time will begin.
10. If an employee has not scheduled vacation leave, is the employer allowed to enforce a
vacation period for that employee?
An employer must ensure employees take their vacation within the entitlement period. If an
employee has not or will not schedule their time off, the employer may place the employee on
vacation, as long as they are provided at least two weeks’ notice of when the vacation time will
begin.

11. When an employee returns to work following a leave of absence, for instance, maternity or
parental leave, what are they entitled to as vacation leave and pay during the first year back
at work?
The CLC indicates that employees on job-protected leave maintain their seniority and benefits.
Therefore, the employee would continue to accrue vacation time during the leave. Employees
would be entitled to take their vacation time when they return to work. However, as no
vacationable earnings are earned during an unpaid leave, no vacation pay would accrue during
this period. Some or all of the employee’s vacation time taken could be unpaid.
12. How do we calculate the final vacation amount owing to an employee at termination?
When employment has been terminated, and the has worked less than five consecutive years, the
employee will be entitled to four per cent of vacationable earnings.
When employment has been terminated, and the employee has worked more than five
consecutive years, the employee will be entitled to:
• any earned vacation from the prior year not yet paid; plus
• the accrual on current year vacationable earnings of:
o four per cent if employed less than five consecutive years
o six per cent if employed for more than five consecutive years
When employment has been terminated, and the employee has worked more than ten consecutive
years, the employee will be entitled to: any earned vacation from the prior year not yet paid; plus

• six per cent if employed for more than five consecutive years
• eight per cent if employed for more than ten years consecutive years
Where an employer has provided a greater benefit per a contract of employment or company policy,
that greater benefit will apply.

ALBERTA
An employee in Alberta with more than 5 years’ length of employment is entitled to a vacation
leave of three weeks. The vacation accrual of 6 per cent would be calculated on the employee’s
vacationable earnings for the 12 months immediately before the 5th year anniversary.
2. We manage vacation leave and pay for all employees based on January to December as a
common vacation reference year. If an employee will reach their fifth anniversary in July of
the current year, when are they entitled to take three weeks' leave and receive vacation pay
of 6 per cent?
Employers can establish a common anniversary date for employees for vacation purposes.
However, an employee must not lose any entitlement to vacation time or pay as a result of the
introduction of a common anniversary date. An employee’s vacation should increase to three
weeks in the year that they have completed their fifth year anniversary. The vacation pays of 6 per
cent is accrued on the previous year.
during the leave or are we required to pay it before the leave begins?
The Act allows an employer to pay vacation pay at any time as long as it is paid no later than the
next regularly scheduled pay date after the employee starts their annual vacation.
If vacation pay is not paid before the employee’s vacation starts, the employee may request to
have their vacation pay at least one day before the vacation starts. The employer must comply
with this request.
Alberta requires vacation leave to be taken as one unbroken period. However, an employee can
request, in writing, for the vacation to be taken in shorter periods. Vacation time may be taken in
half-day increments if the employer and employee agree.
must follow?
Paying vacation pay each pay or on a regularly scheduled basis (i.e. quarterly, monthly, etc.) is
permitted, and employers do not have to calculate vacation pay on the previously paid vacation
pay.

Regardless of their employment status (full-time, part-time, casual), after one year of
employment, most employees are entitled to at least two weeks of vacation with pay.
want to take vacation leave. Are we permitted to process this request, and what should we be
aware of when doing so?
Employees must be provided with their legislated annual vacation leave and vacation pay. Neither
an employer nor an employee may waive the statutory entitlement to annual vacation. Failure to
grant an annual vacation leave violates the Act even if vacation pay is paid out.
maintenance shutdown of our facility. Are we permitted to enforce a common vacation week
An employer may define a standard recurring vacation period for a group of employees, for
instance, during a maintenance shutdown. An employer has the right to schedule vacation leave
for employees as long as the employees are provided at least two weeks of notice before the first
day of the vacation.
An employer is obligated to ensure employees take their vacation within the entitlement period.
If an employee has not or will not schedule their time off, the employer may place the employee
on vacation as long as the employee is provided at least two weeks of notice before the first day of
the vacation.

at work?
The Act indicates that an employee on job-protected leave maintains their seniority and benefits.
Time spent on job-protected leave counts towards the length of employment and is used to
determine the number of weeks for annual vacation. However, an employee’s annual vacation
period can also be reduced if that employee is absent from work. The reduction in the vacation
period may be made in proportion to the number of days the employee was or would normally
have been scheduled to work but did not.
An employee is entitled to be paid for all earned vacation pay that has not yet been paid at the
time of termination, plus amounts accrued on earnings in the current vacation year up to the end
of employment.
When employment has been terminated, and the employee has worked less than 12 consecutive
months, the employee will be entitled to 4 per cent of vacationable earnings.
When employment has been terminated, and the employee has worked more than 12
consecutive months, the employee will be entitled to:
o 4 per cent of the employee’s wages for the period from the date they last became entitled
to an annual vacation to the employment termination date
o 6 per cent of the employee’s wages for the period from the date they last became entitled
to an annual vacation to the employment termination date
Where an employer has provided a greater benefit as per a contract of employment or company
policy, that greater benefit will apply.

BRITISH COLUMBIA
An employee in British Columbia becomes entitled to at least 3 weeks of vacation after 5

consecutive years of employment. An employee becomes entitled to 6 per cent vacation pay at
the completion of their fifth year of employment.
common vacation reference year. If an employee will reach their fifth anniversary in July of
of 6 per cent?
Employers can establish a common anniversary date for employees for vacation purposes.
However, an employee must not lose any entitlement to vacation time or pay as a result of the
introduction of a common anniversary date. An employee’s vacation should increase to three
weeks in the year that they have completed their fifth year anniversary. The vacation pays of 6 per
cent is accrued on the previous year.
Vacation pay must be paid at least 7 days before an employee starts their annual vacation time. If
the employee and employer agree in writing, it can be paid out on every paycheque instead. Any
vacation pay received by an employee becomes part of the total wages paid in that year.
Vacation can be paid on each scheduled payday if:

• The employee has agreed in writing
• Provided by a collective agreement
British Columbia requires an annual vacation to be scheduled in periods of 1 week or more

unless the employee asks for a shorter amount of time. The responsibility is on the employer to
show that a shorter period taken was at the employee’s request. The Act does not address taking
vacation leave in partial days.
must follow?
If employees and the employer agree in writing, vacation can be paid out on every paycheque.

Full-time, casual, and part-time employees are eligible for annual vacation as long as they meet
all eligibility criteria.
Employees who are employed for 5 calendar days or less are not entitled to be paid annual
vacation pay.
Employees must be provided with their legislated annual vacation leave and vacation pay. Neither
an employer nor an employee may waive the statutory entitlement to annual vacation. Failure
to grant an annual vacation leave violates the Act even if vacation pay is paid out. An employer
must ensure an employee takes an annual vacation within 12 months after completing the year of
employment, entitling the employee to the vacation.
In British Columbia, the employee has to be paid what the greater benefit stipulates. Agreements
to give more vacation days or vacation pay can be enforced. Employers must uphold any
agreements they make, even if they are greater than the minimum requirements for annual
vacation pay or time off.
maintenance shutdown of our facility. Are we permitted to enforce a common vacation week
An employer has the right to schedule a vacation. In some cases, an employer may define a
standard recurring vacation period for a group of employees, for instance, during a maintenance
shutdown. In situations where an employee has not requested vacation leave, the employer may
choose to place the employee on vacation leave with reasonable notice.
on vacation.

at work?
Therefore, the employee would continue to accrue vacation time during the leave. When the
employee returns to work, they would be entitled to take their vacation time. However, as no
this period. Some or all of the employee’s vacation time taken could be unpaid if they were not
earning wages while on leave. The amount earned as vacation pay will be lower than it would
have been otherwise.
Any employee leave of absence, including temporary layoff, a leave under Part 6, or any other
employer authorized leave of absence, is included when determining continuous employment for
vacation entitlement.
An employee is entitled to be paid for all earned vacation pay that has not yet been paid at the
time of termination, plus amounts accrued on earnings in the current vacation year up to the end
of employment. If an employee becomes entitled to additional “earned wages” after termination,
such as a commission in accordance with their employment contract, they are also entitled to
receive vacation pay on those payments. These wages must be paid to an employee when they
become due.
If an employee has not completed their fifth year of consecutive employment, and their
employment ends, the vacation pay is based on 4 per cent of gross earnings in the fifth year of
employment. Vacation pay for an employee who completes five years of employment is calculated
as 6 per cent of the gross wages earned by the employee during the fifth year of employment.
Whereas an employer has provided a greater benefit as per a contract of employment or company
Section 67 (1) prohibits an employer from scheduling an employee’s vacation to coincide with
notice of termination of employment.
Section 59 of the Act prohibits an employer from granting time off as a bonus or sick time and
later reducing an employee’s vacation entitlement as a result of the previously granted leave.

MANITOBA
An employee in Manitoba is entitled to a vacation leave of three weeks immediately following

their fifth anniversary. The accrual of 6 per cent would be calculated on the employee’s
vacationable earnings for the 12 months immediately before the 5th anniversary.
common vacation reference year. If an employee will reach their eighth anniversary in July
of the current year, when are they entitled to take three weeks' leave and receive vacation
pay of 6 per cent?
An employer may establish a common vacation year for all employees or a group of employees.
Where an employee is subject to a common anniversary date and has not on that date completed
a year of employment, the employer shall give the employee an annual vacation and vacation
allowance in the proportion that their time of employment in the year is to the entitlements.
The employer must pay the vacation pay to the employee not later than the last working day
before the employee's annual vacation begins. However, an employee and employer may
mutually agree to a different arrangement, such as paying on the regular payday.
The Act indicates that vacation leave must be granted in periods of not less than one week at a
time.
must follow?
Employers may pay vacation pay each pay period. Employees are still entitled to take time off as
vacation, but because it has already been paid, they do not receive any additional vacation pay
while they are off.
Part-time employees must receive at least two weeks of vacation after each of the first four years
of employment. After completing five years of work with the same employer, employees must
receive a minimum of three weeks of vacation.

An employer must give an employee an annual vacation not later than 10 months after the
employee becomes entitled to it. There are no provisions in the Act that would allow the
employee to waive their time in lieu of the pay.
9. As an employer, we would like to mandate one week of vacation for all employees during
a maintenance shut down of our facility. Are we permitted to enforce a common vacation
week for all employees, and how much notice must we provide?
Where the business of an employer customarily shuts down for an extended period each year, the
employer may require the employees to take their annual vacations during that period.
If an employer and an employee are unable to agree on when the employee will take the annual
vacation, the employer shall give the employee at least 15 days' notice of the date on which the
vacation is to begin, and the employee must take the vacation at that time.
at work?
The leave does not affect the amount of vacation time an employee is entitled to, as the time
spent on leave is included in the employee’s length of service. However, as no vacationable
earnings are earned during an unpaid leave, no vacation pay would accrue during this period.
Some or all of the employee’s vacation time taken could be unpaid.

If an employee's employment terminates before they are entitled to an annual vacation, the
employer shall pay the employee a vacation allowance equal to:
Any earned vacation from the prior year not yet taken or paid; plus
The current year accrual to the date of termination is equal to:
If the employee has not completed five consecutive years of employment with the employer, 4%
of the wages earned since the date the employee became employed by the employer or the date
the employee last became entitled to an annual vacation, whichever is later; or
If the employee has completed five consecutive years of employment with the employer, an
additional 2% of the wages earned from the date the employee last became entitled to an annual
vacation to the date of termination.
NEW BRUNSWICK
In New Brunswick, an employee who has 8 or more years of continuous service is entitled to a
vacation leave of three weeks per vacation year or 1.25 days for each month worked during the
vacation year, whichever is less.
pay of 6 per cent?
The Act references the ‘vacation pay year’ as the period from the first day of July to the last day of
the following June. An employer, not later than 4 months after the vacation pay year ends, will
give an employee who has 8 years or more of continuous employment vacation that is equal to 3
regular works weeks and 6 per cent of vacationable earnings.
The Act indicates that employees should receive their vacation pay at least one day before their
vacation leave begins.

The Act does not specify how vacation must be taken. Employers and employees can agree on the
employee’s vacation dates. If they cannot agree, the employer can decide when the employee will
take a vacation as long as the employer provides the employee with one week's notice prior to the
vacation start date.
must follow?
Employers can pay vacation pay each pay period. Employers must inform employees of this and
keep records that show the employee has been informed. Employers also must identify vacation
pay on the employee’s pay statement and maintain records that vacation pay has been paid.
Part-time employees are entitled to vacation leave of two weeks or three weeks after 8 consecutive
years of employment.
It is the legal responsibility of the employer to schedule, approve vacation time and release
vacation accrued at least one day before the vacation begins.
Employers in New Brunswick must ensure that vacation leaves are taken no later than 4 months
after the end of the vacation pay year.
Employer and employee can enter into an agreement for greater benefits.
The employer should make the employee aware of the greater benefits and include the treatment
of any vacation time or pay greater than the legislated requirement. The agreement can include
provisions such as:

Such agreement will be respected and enforced by the Employment Standards Branch.
The employer has the right to decide when vacation time can be taken. However, they should
provide the employees with at least one week’s notice of when their vacation time will begin.
If the employer, based on operational requirements, has established week(s) of vacation, it is best
to indicate those periods in your vacation policy and communicate to employees.
Employers and employees can agree on the employee’s vacation dates. If they cannot agree, the
employer can decide when the employee will take a vacation as long as the employer provides the
employee with one week’s notice prior to the vacation start date.
at work?
The Act indicates that an employee on job-protected leave will not lose their seniority or benefits
accrued to the commencement of the leave. The employee would continue to accrue vacation
time upon return to work. When the employee returns to work, they would be entitled to take
their vacation time. However, as no vacationable earnings have been earned during an unpaid
leave, no vacation pay would accrue during this period.
When employment has been terminated before the end of the vacation pay year, the employee
will be entitled to:
An amount equal to 4 per cent of the vacationable earnings for the vacation pay year if employed
less than eight consecutive years or an amount equal to 6 per cent of the vacationable earnings
for the vacation pay year if employed for more than eight consecutive years.
Where provisions for a vacation established by any other Act, agreement or contract of service
are as favourable to an employee in respect to their vacation pay year as the requirements of
the Employment Standards Act, the provisions established will prevail over the Employment
Standards Act.

NEWFOUNDLAND & LABRADOR
In Newfoundland and Labrador, an employee who has 15 or more years of continuous service is
entitled to a vacation leave of three weeks and 6 per cent of their vacationable earnings.
pay of 6 per cent?
Under the Act, an employee is entitled to vacation time and pay once they complete a full year
of continuous service and have worked at least 90 per cent of their regular hours in the preceding
12 months.
The Act indicates employees should receive their vacation pay at least one day before their
An employee with less than 15 years of continuous service with the same employer can take
either one unbroken 2 weeks period or two unbroken periods of 1 week.
An employee who has 15 years or more of continuous service with the same employer can take
either one unbroken period of 3 weeks, two unbroken periods of 2 weeks and 1 week separately,
or unbroken periods of 1 week.
must follow?
keep records that show the employee has been informed. Employers are also required to itemize
vacation pay when it is paid out to an employee.
Part-time employees who work less than 90 per cent of the normal working hours are not
entitled to annual vacation leave. However, they are entitled to receive vacation pay equal to 4

per cent of their vacationable earnings if employed for less than 15 years and 6 per cent of their
vacationable earnings if employed for 15 or more years.
Any employee who has been employed for five calendar days or more would be eligible for
vacation pay.
The Act indicates that an employee who works for an employer less than 90 per cent of the
regular working hours during a continuous 12 months period is not entitled to annual vacation
leave, only vacation pay.
Employers are advised to contact Employment Standards Office for approval if the employee
requests vacation pay while forgoing vacation time.
If the employer provides greater benefits, those terms and conditions will govern the employment
relationship.

provide the employee with at least two week’s notice of when their vacation time will begin.
An employer can also cancel an employee’s vacation. If the employer and employee agree to the
vacation in writing and the employer cancels the vacation, the employer must compensate the
employee for reasonable expenses that the employee cannot recover because their vacation was
cancelled.
on vacation as long as the employee is provided at least two weeks of notice before the first day of
the vacation.
at work?
When employment has been terminated, the employee has worked five workdays or more, the
employer will pay the employee the vacation pay the employee is entitled to:
o 4 per cent if employed less than fifteen consecutive years
o 6 per cent if employed for more than fifteen consecutive years

NORTHWEST TERRITORIES & NUNAVUT
According to the Employment Standards Acts of the Northwest Territories and Nunavut, new
employees must wait until they have completed a full year of employment before they can be
granted entitlement to vacation time or pay.
After each of the first five years of employment with the same employer, employees in the
Northwest Territories and Nunavut are entitled to two weeks of vacation time paid at 4 per cent
of their vacationable wages. Once employees have worked six years with the same employer,
their vacation entitlement will go up to three weeks and 6 per cent of vacationable earnings. The
vacation accrual of 6 per cent would be calculated on the employee’s vacationable earnings for
the 12 months immediately before the 6th anniversary.
common vacation reference year. If an employee will reach their sixth anniversary in July of
of 6 per cent?
The Act does not specify rules on providing vacation to employees based on a common
12-month vacation year. As a best practice, an employee’s vacation should increase to three weeks
for the vacation year in which they have completed their 6th year of employment. This ensures
the employee will not receive a benefit less than what they would be provided when vacation is
based on their anniversary date.
In the Northwest Territories and Nunavut, vacation pay must be paid at least one day before
the beginning of the vacation time or on an earlier date if agreed upon by the employee and the
employer.
The Employment Standards Act does not specify how the leave is to be granted, only that
employees must be permitted to take their two or three weeks of vacation leave within six
months of the entitlement being earned. Therefore, an employer is not required by law to
approve vacation in daily or half-day increments; they do so at their own discretion. The use of
daily or half-days can certainly be limited.

must follow?
Employers and employees may enter into mutual agreements to pay vacation pay on each pay.
Both full-time and part-time employees are entitled to vacation time and vacation pay. After
each of the first five years of employment with the same employer, employees in the Northwest
Territories and Nunavut are entitled to two weeks of vacation time paid at 4 per cent of their
vacationable wages. Once employees have worked six years with the same employer, their
vacation entitlement will go up to three weeks and 6 per cent.
Under the Employment Standards Acts of both the Northwest Territories and Nunavut, the
vacation must begin no later than six months immediately following the completion of the year
of employment for which the employee became entitled to the vacation. However, the employee
and employer can file a written agreement with the Employment Standards Officer to either
postpone the annual vacation to a later date or pay out the vacation pay and forego the vacation
time.
The legislation in each jurisdiction sets out a time frame in which vacation time and pay must be
taken and paid according to when it was earned. In the Northwest Territories and Nunavut, the
vacation must begin no later than six months immediately following the completion of the year
of employment for which the employee became entitled to the vacation.
establish in their policy a scheduled pay-out date for the excess vacation pay to be calculated,
reconciled and paid out.
Under the Employment Standards Acts of both the Northwest Territories and Nunavut, the
vacation must begin no later than six months immediately following the completion of the
year of employment for which the employee became entitled to the vacation. The employer is

responsible for ensuring that employees use their vacation entitlement. The Act does not specify
rules on providing proper notice of when the vacation will be scheduled.
The employer is responsible for ensuring that employees use their vacation entitlement. Under
the Employment Standards Acts of both the Northwest Territories and Nunavut, the vacation
must begin no later than six months immediately following the completion of the year of
employment for which the employee became entitled to the vacation. However, the employee
and employer can file a written agreement with the Employment Standards Officer to either
postpone the annual vacation to a later date or pay out the vacation pay and forego the vacation
time.
at work?
For employees regulated by employment standards in the Northwest Territories and Nunavut,
vacation time continues to accrue as normal while on pregnancy, maternity and parental leaves.
Vacation pay remains 4 per cent or 6 per cent of the wages earned during the vacation reference
year. However, as no vacationable earnings are earned during an unpaid leave, no vacation pay
would accrue during this period. Some or all of the employee’s vacation time taken could be
unpaid.
o 4 per cent if employed less than six consecutive years
o 6 per cent if employed for more than six consecutive years
• The vacation pay must be paid within ten business days of the date of termination.
• Where an employer has provided a greater benefit as per a contract of employment or
company policy, that greater benefit will apply.

NOVA SCOTIA
In Nova Scotia, an employee is entitled to a vacation leave of three weeks in their ninth year of
service, following their completed eight years of service. The vacation accrual of 6 per cent would
be calculated on the employee’s vacationable earnings at the start of their 8th year of service upon
completing 7 years of service.
pay of 6 per cent?
12-month vacation year. As a best practice, an employee’s vacation entitlement should increase
to three weeks for the vacation year in which their eight-year anniversary occurs. This ensures
the employee will not receive a benefit less than what they would be provided when vacation is
based on their anniversary date.
Each jurisdiction requires the employer to establish a period during which an employee acquires
entitlement to annual leave. The entitlement period or reference period can start on the date of
hire, calendar year or any other period of 12 months determined by the employer.
The employer and employee may agree to two or more vacation periods. The vacation periods
must be in total at least equal to the length of vacation the employee is entitled to and include an
unbroken period of at least one week.
must follow?
keep records that show the employee has been informed. Employers also must identify vacation
pay on the employee’s pay statement and maintain records that vacation pay has been paid.

Part-time employees are entitled to vacation leave of two weeks or three weeks after 8 consecutive
The Act indicates that an employee who works for an employer less than 90 per cent of the
regular working hours during a continuous 12 months' period can waive the entitlement to a
period of vacation leave. When the employee notifies the employer in writing that they wish to
waive any vacation time in lieu of payment, the employer must pay the employee no later than
one month after the end of the 12 months' period.
There is nothing in the legislation to prevent an employer from instituting a “use it or lose it”
policy for the greater benefit.
provide the employee with at least one week's notice of when their vacation time will begin.

on vacation as long as the employee is provided at least one week of notice before the first day of
the vacation.
at work?
o 4 per cent if employed less than eight consecutive years
o 6 per cent if employed for more than eight consecutive years

ONTARIO
In Ontario, an employee is entitled to a vacation leave of three weeks immediately following

their fifth anniversary. The vacation accrual of 6 per cent would be calculated on the employee’s
vacationable earnings for the 12 months immediately before the 5th anniversary.
current year, when are they entitled to take three weeks' leave and receive vacation pay of 6
per cent?
The Act refers to an alternative vacation reference year, which is a 12-month period chosen by
the employer. An employee’s vacation entitlement should increase to three weeks for the vacation
year in which their fifth anniversary occurs. This ensures the employee will not receive a benefit
less than what they would be provided when vacation is based on their anniversary date.
The Ontario Employment Standards Act (ESA) indicates employees should receive their vacation
pay in a lump-sum sometime before they take the vacation time earned. The Act does not
specify a particular date prior to the commencement of the vacation.
Some exceptions apply when:

• the vacation time is being taken in periods of less than one week; in this case, the vacation
pay is paid on or before the payday for the period in which the vacation falls.
• the employee has agreed to be paid vacation pay on each paycheque.
• the employee agrees with the employer to be paid at any time agreed by the employee.
• the employer pays the employee their wages by direct deposit; in this case, the vacation pay is
paid on or before the day for the period in which the vacation falls.
The Ontario ESA requires vacation leave to be taken as one unbroken leave of two weeks
or in two one-week for employees with less than five years. For employees whose period of
employment is five or more years of service, employers must schedule the vacation time earned
each vacation entitlement year in a Block of:

• three weeks
• two weeks and a one-week period, or
• three periods of one week
An employee and employer may enter into an agreement, documented in writing or
electronically, that allows vacation to be taken in shorter periods, such as by the day.
This is allowed but not mandatory for an employer to provide.
must follow?
Employers can pay the vacation pay on each paycheque agreed to by the employee electronically
or in writing.
Part-time employees are entitled to two or three weeks of vacation leave after five consecutive
Employers must ensure that their employees receive at least the minimum legislated annual
vacation leave of two weeks and vacation pay calculated at four per cent of vacationable
earnings if the period of employment is less than five years. Employees with 5 or more years
of employment must at least receive three weeks of vacation time paid at six per cent of their
vacationable earnings.
An employee can give up some or all of their earned vacation time with the employer's electronic
or written agreement and the approval of the Director of Employment Standards. This approval
does not affect an employer's obligation to pay the employee vacation pay; employees may give
up vacation time, but not the right to vacation pay

There is nothing in the legislation to prevent an employer from instituting a “use it or lose it”
policy for the greater benefit.
An employer has the right to schedule vacation leave for employees, as well as to ensure the
vacation time is scheduled and taken before the end of the 10-month period. There is no specific
required notice.
An employer has the right to schedule vacation leave for employees, as well as to ensure the
vacation time is scheduled and taken before the end of the 10-month period. There is no specific
required notice.
at work?
When employment ends (for example, when an employee quits or the employment is
terminated), an employee is entitled to vacation pay that they have earned and that has not yet
been paid. In some cases, this would include vacation pay earned during a previous vacation
entitlement year as well as the vacation pay earned during a current one.
An employee whose employment is terminated before the five-year employment threshold

will be entitled to vacation pay of four per cent of the wages earned during that last (partially
completed) vacation entitlement period (plus any outstanding vacation pay earned in previously
completed vacation entitlement periods).
An employee with more than five years of employment with the employer prior to being
terminated would be entitled to six per cent of all the wages earned in that (partially completed)

vacation entitlement year (plus any outstanding vacation pay earned in previously completed
vacation entitlement periods).
PRINCE EDWARD ISLAND
An employee in Prince Edward Island is entitled to a vacation leave of three weeks immediately
following their eighth anniversary. The vacation accrual of 6 per cent would be calculated on the
employee’s vacationable earnings for the 12 months immediately before the 8th anniversary.
pay of 6 per cent?
12-month vacation year. As a best practice, an employee’s vacation should increase to three
weeks for the vacation year in which their eighth anniversary occurs. This ensures the employee
will not receive a benefit less than what they would be provided when vacation is based on their
anniversary date.
Prince Edward Island requires vacation leave to be taken as one unbroken leave of two weeks or
one unbroken leave of three weeks for employees with eight or more years of service.
must follow?
Paying vacation pay each pay is only permitted for seasonal and short-term employees, as long as
the employer:
• has proof that the employee knows vacation pay will be paid on every paycheque, and

• maintains payroll records validating that vacation pay has been paid to the employee, and
• shows on the employee's pay stub that vacation pay is included in the paycheque
Part-time employees are entitled to vacation leave of two weeks or three weeks after eight
consecutive years of employment.
The only exception is for part-time employees with 12 months or more of service who work less
than 90 per cent of the employer’s normal working hours. An employee in this circumstance may
provide the employer notice of their wish to waive any vacation time in lieu of payment. The
employer must pay the employee no later than one month after the end of the twelve months
during which the employee established the entitlement.
An employer has the right to schedule vacation leave for employees as long as the employees are
provided at least one week of notice before the first day of the vacation.

on vacation as long as the employee is provided at least one week of notice before the first day of
the vacation.
at work?
o 4 per cent if employed less than eight consecutive years
o 6 per cent if employed for more than eight consecutive years

QUEBEC
An employee in Quebec is entitled to a vacation leave of three weeks immediately following

their third anniversary. The vacation accrual of 6 per cent would be calculated on the employee’s
vacationable earnings for the 12 months immediately before the 3rd anniversary.
common vacation reference year. If an employee will reach their third anniversary in July of
of 6 per cent?
Vacations are earned over a period of 12 consecutive months. This period runs from May 1 to
April 30 (unless other dates are set by the employer, a decree or an agreement) and is known as
the “vacation entitlement year. If you have such an agreement, then your employees are entitled
to three weeks and 6 per cent during the vacation year that starts on January 1st, immediately
after their third anniversary.
An employee may receive their vacation pay in a lump-sum before they start their vacation or at
the time of the current pay covering the period of their vacation.
In Quebec, employees must be permitted to take their full vacation leave in one continuous
period. Employees entitled to more than two weeks may divide their vacation into two periods,
for instance, a leave of two weeks and another of one week.
An employer cannot enforce periods of less than one week. However, an employee and employer
may agree on periods of less than one week. One week of vacation equals an employee’s normal
or average number of working days per week.
must follow?
Employers in Quebec are not permitted to pay vacation pay each pay. The only exception is in
the case of seasonal or intermittent activities (tourism, agriculture, fisheries), where the employer
may add vacation pay to each pay.

Part-time employees are entitled to the same vacation entitlements as full-time employees.
Vacation leave must be granted as one continuous leave.
If there is an agreement to allow the leave to be divided into shorter periods, one week of
vacation equals an employee’s normal or average number of working days per week. Therefore,
a part-time employee that normally works two days per week and is entitled to two weeks of
vacation would have a total of four vacation days.
An employee in Quebec is not permitted to waive their legislated vacation leave in lieu of
receiving the vacation pay. The only exception is when a collective agreement or decree contains
such a provision.
However, when a business closes for two weeks during the annual vacation, an employee entitled
to three weeks of vacation may request that the third week be paid in cash.
An employer may choose the vacation period for their employees. They must inform them of the
dates of their vacation at least four weeks in advance.

Yes. When an employee fails to schedule vacation leave, an employer may choose the vacation
period for their employees. They must inform them of the dates of their vacation at least four
weeks in advance.
at work?
In Quebec, employees continue to accrue vacation leave and pay during the following types of
leave:
• Maternity or paternity (does not apply to parental leave)
• Sick leave, excluding work-related illness or injury, covered under CNESST
Refer to section 1.7 Accrual of vacation while on maternity and other legislated leaves. The
formula to determine vacation pay for employees who take these leaves is illustrated.
Other leaves that may be unpaid do not impact an employee’s entitlement to their legislated
vacation leave. However, no vacation pay accrues during the unpaid leave. Some or all of the
employee’s vacation time taken could be unpaid.
o 4 per cent if employed less than three consecutive years
o 6 per cent if employed for more than three consecutive years
When calculating the current year’s accrual, the previous year’s vacation that has not yet been
paid is considered a vacationable earning for the final accrual.

SASKATCHEWAN
In Saskatchewan, during the first nine years of employment, holiday pay is calculated by
multiplying the total wage by 3/52 (about 6 per cent). During the 10th and following years of
employment, holiday pay is calculated by multiplying the total wage by 4/52 (about 8 per cent).
current year, when are they entitled to take four weeks' leave and receive vacation pay of 8
per cent?
The employee will not receive 4 weeks of vacation time until they have served another five years
with the company. In Saskatchewan, employees receive four weeks of vacation once they have
completed ten years of service. During the 10th and following years of employment, holiday pay
is calculated by multiplying the total wage by 4/52 (about 8 per cent).
All eligible full-time, part-time, casual, temporary, and seasonal employees (including those who
have not worked a full year with the same employer) receive vacation pay, so they are paid during
this time off work.
Employees receive vacation pay:

• at their request before taking a vacation; or
• on a normal payday during a vacation.
If employees do not take their vacation, vacation pay must be paid within 11 months after they
become entitled to their annual vacation.
The employer must allow the employee to take a vacation within 12 months after the date on
which the employee becomes entitled to it. An employee is entitled to take a vacation in one
continuous period unless they request shorter periods of at least a week at a time. Employees
must receive approval from the employer in advance for each vacation period.

must follow?
Employers can pay the vacation pay on each paycheque. However, if an employee does not want
to be paid vacation on each paycheque, then the employer cannot enforce it.
All eligible full-time, part-time, casual, temporary, and seasonal employees (including those who
have not worked a full year with the same employer) receive vacation pay, so they are paid during
this time off work. During the first nine years of employment, multiply the employee’s wages
for the 12-month period by 3/52 (5.77 per cent). Once an employee has completed 10 years of
employment with the same employer, the employee is eligible for four weeks of vacation in the
upcoming year and vacation pay of 4/52 (7.69 per cent).
Employees and employers should negotiate when the annual vacation is taken. If no agreement
is reached, the employer can schedule the employee’s vacation by giving the employee written
notice at least four weeks before the employee’s vacation must begin. If the employee does not
take a vacation, the employee must get vacation pay no later than 11 months following the date
when the annual vacation was earned. Waiving of legislating vacation time is not allowed in
Saskatchewan.
The employer can institute a”use it or lose it” policy for the time but not for the pay.
An employer can require all employees, or all employees in part of a workplace, to take their
vacation at a time when the employer has closed all or part of the workplace. However, this
applies only if those vacation periods are not less than one week in length.
The employer can do this by providing the employees with written notice at least four weeks
before the vacation must begin. If an employee has not scheduled vacation leave, is the employer
allowed to enforce a vacation period for that employee?

10. Employees and employers should negotiate when the annual vacation is taken. If no
agreement is reached, the employer can schedule the employee’s vacation by giving the
employee a written notice at least four weeks before the employee’s vacation must begin.
If the employee does not take a vacation, the employee must get vacation pay no later than 11
months following the date when the annual vacation was earned.
at work?
When employment has been terminated, employees are to be paid previously unpaid vacation
pay within 14 days of termination. Employees are entitled to:
o 3/52 of wages for the first nine years of employment
o 4/52 of wages for the tenth year onwards.
Since wages in lieu of notice is part of an employee’s wages, the vacation pay calculation must
include any wages in lieu of notice. Employers can’t require employees to take vacation leave or
pay vacation pay during notice periods.
Wages in lieu of notice means payment of the employee's normal weekly wages for the required
notice period.

YUKON
According to the Yukon Employment Standards Act, employees are entitled to an annual
vacation of ten days with 4 per cent vacation pay once they have completed a full year of
employment and after every subsequent year of employment. The vacation accrual of 4 per cent
would be calculated on the employee’s vacationable earnings starting on the hire date. However,
a Yukon employee must be employed for at least 14 calendar days to be entitled to vacation pay
upon termination.
common vacation reference year. If an employee will reach one year of service in July of the
current year, when are they entitled to take two weeks' leave and receive vacation pay of 4
per cent?
According to the Yukon Employment Standards Act, employees are entitled to an annual
vacation of ten days with 4 per cent vacation pay once they have completed a full year of
employment. The Act does not specify rules on providing vacation to employees based on a
common 12-month vacation year. If applying a common 12-month vacation year, employers
should ensure the employee will not receive a benefit less than what they would be provided
when vacation is based on their anniversary date.
To ensure compliance with the Yukon Employment Standards Act, an employer must pay
out the vacation pay to which an employee is entitled at least one day before the start of the
annual vacation or the part of it being taken if the employee is not taking their whole vacation
entitlement at once.
The Employment Standards Act does not specify how the leave is to be granted, only that
employees must be permitted to take their two or three weeks of vacation leave within ten
months of the entitlement being earned. Therefore, an employer is not required by law to
approve vacation in daily or half-day increments; they do so at their own discretion. The use of
daily or half-days can certainly be limited.
must follow?
Employers and employees may enter into mutual agreements to pay vacation pay on each pay.

Unless they happen to be members of the employer’s family, all employees, whether full-time,
part-time, temporary or seasonal, are entitled to an annual vacation of ten days with 4 per cent
vacation pay once they have completed a full year of employment and after every subsequent year
of employment.
According to the Yukon Employment Standards Act, an employee and an employer may enter
into a written agreement wherein the employee can forego taking vacation time and receive the
vacation entitlement in cash. This payment has to be made within the same ten-month period
the vacation time would have been taken.
The legislation in each jurisdiction sets out a time frame in which vacation time and pay must be
taken and paid according to when it was earned. In the Yukon, the vacation must begin no later
than ten months immediately following the completion of the year of employment for which the
employee became entitled to the vacation.
establish in their policy a scheduled pay-out date for the excess vacation pay to be calculated,
reconciled and paid out.
Yes, employers may determine when employees take their vacation. Under the Yukon
Employment Standards Act, the vacation must begin no later than ten months immediately
following the completion of the year of employment for which the employee became entitled
to the vacation. The employer is responsible for ensuring that employees use their vacation
entitlement. The Act does not specify rules on providing proper notice of when the vacation will
be scheduled.
Yes, employers may determine when employees take their vacation. Under the Yukon

Employment Standards Act, the vacation must begin no later than ten months immediately
following the completion of the year of employment for which the employee became entitled
to the vacation. However, the employee and employer can file a written agreement with the
Employment Standards Officer to either postpone the annual vacation to a later date or pay out
the vacation pay and forego the vacation time
at work?
In the Yukon, employees on maternity or parental leave continue to accrue vacation time
during the period of the leave. However, the vacation pay remains 4 per cent of the vacationable
earnings earned during the vacation reference year; no vacation pay accrues during an unpaid
leave. Therefore, an employee returning from maternity or parental leave will be entitled to two
weeks of vacation but little or no vacation pay. An employee and an employer may enter into a
written agreement where the employee can forego taking vacation time and receive the vacation
pay.
A Yukon employee must be employed for at least 14 calendar days to be entitled to vacation pay
upon termination. Therefore, employees who worked at least two calendar weeks will be entitled
to 4 per cent of their wages as vacation pay. The vacation pay must be paid within seven business
days of their last day worked.

SECTION 5: RESOURCES
RESOURCES & WEBSITES
All employment standards legislation across Canada contains provisions on the two components of
vacation: vacation time and vacation pay. That means there are 14 individual pieces of legislation
regarding vacation: one federal, ten provincial and three territorial.
Each of the 14 jurisdictions has oversight regimes headed by the respective Director of Employment
Standards, which investigates complaints regarding non-compliance. Keep in mind that the
Director of Employment Standards does not necessarily restrict the review to ensuring the legislated
minimums are met; if an organization has a policy or a collective agreement that supersedes the
minimum standards, providing a greater right or benefit, the Director may enforce the provisions of
the policy or agreement instead.
Do you have any guidelines for developing an organizational vacation policy?
For information on developing a vacation policy within your organization, refer specifically to the
following:
• Subsection 1.10 in Section 1: Overview

• Template 2.8 in Section 2: Tables & Templates
• Subsection 3.6 in Section 3: Questions & Answers by Topic
However, to ensure your vacation policy is compliant with the legislation in all the jurisdictions
where your organization operates, the information provided throughout this publication will
be useful. It is important that you seek legal counsel to ensure the policy is acceptable for the
jurisdictions in which employees work.
Do you have a template for a vacation request form?
The Institute’s template for the Vacation Request Form can be found in Template 2.8 in Section
2: Tables & Templates

Where can I access the legislation governing vacations?
Below is a listing of websites containing information and legislation related to vacation time and
pay, organized by Canadian jurisdiction. These sites are excellent resources to ensure you are basing
your practices and policies on the most up-to-date legislation. They also contain a great deal of other
information you may find useful.
Note: The website addresses in this publication are only as up to date as at the time of printing.
FEDERAL JURISDICTION
Legislation Canada Labour Code, Part III CLICK HERE
Employment/Labour Standards - CLICK HERE
Vacation & Vacation Pay - CLICK HERE
ALBERTA
Alberta Employment Standards Code CLICK HERE

Legislation
Alberta Employment Standards Regulation CLICK HERE
BRITISH COLUMBIA
British Columbia Employment Standards Act CLICK HERE

Legislation
British Columbia Employment Standards Regulation CLICK HERE

MANITOBA
Manitoba Employment Standards Code CLICK HERE

Legislation
Manitoba Employment Standards Regulation CLICK HERE
NEW BRUNSWICK
New Brunswick Employment Standards Act CLICK HERE

Legislation
New Brunswick Employment Standards Regulations CLICK HERE
NEWFOUNDLAND & LABRADOR
Newfoundland & Labrador Labour Standards Act CLICK HERE

Legislation
Newfoundland & Labrador Labour Standards
CLICK HERE
Regulation
NORTHWEST TERRITORIES
Northwest Territories Employment Standards Act CLICK HERE

Legislation
Northwest Territories Employment Standards
CLICK HERE
Regulations

NOVA SCOTIA
Nova Scotia Labour Standards Code CLICK HERE

Legislation
Nova Scotia Labour Standards Regulations CLICK HERE
NUNAVUT
Nunavut Labour Standards Act CLICK HERE

Legislation
Nunavut Annual Vacations Regulations CLICK HERE
ONTARIO
Legislation Ontario Employment Standards Act, 2000 CLICK HERE
PRINCE EDWARD ISLAND
Prince Edward Island Employment Standards Act CLICK HERE

Legislation
Prince Edward Island Standards Regulations CLICK HERE

QUEBEC
Quebec An Act respecting labour standards CLICK HERE

Legislation
Quebec Regulation respecting labour standards CLICK HERE
SASKATCHEWAN
Saskatchewan Labour Standards Act CLICK HERE

Legislation
Saskatchewan Labour Standards Regulations CLICK HERE
Vacation Pay Calculator - CLICK HERE
YUKON
Legislation Yukon Employment Standards Act CLICK HERE


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VACATION REFERENCE YEAR & ENTITLEMENT PERIOD �������������������������������������������������������������������������������� 11

ACCRUAL OF VACATION WHILE ON MATERNITY & OTHER LEGISLATED LEAVES ��������������������������� 14

DEDUCTIONS FOR OVERPAYMENTS OF VACATION PAY ������������������������������������������������������������������������������� 17

SECTION 2: TABLES & TEMPLATES ����������������������������������������������������������������������������� 22

TABLE 2.2: EMPLOYER OBLIGATIONS REGARDING VACATION ���������������������������������������������������������������� 23

TABLE 2.3: VACATION POLICIES PERMITTED BY JURISDICTION �������������������������������������������������������������� 25

TABLE 2.4: VACATIONABLE EARNINGS BY JURISDICTION ������������������������������������������������������������������������� 26

TABLE 2.6: RECOVERY OF ADMINISTRATIVE ERRORS OR ADVANCES NOT EARNED ������������������� 28

TEMPLATE 2.7: ONLINE VACATION REQUEST EXAMPLE ����������������������������������������������������������������������������� 30

SECTION 3: QUESTIONS & ANSWERS BY TOPIC ������������������������������������������������������� 32

YOUR PAYROLL VACATION QUESTIONS ANSWERED 2

SECTION 4: QUESTIONS AND ANSWERS BY JURISDICTION ��������������������������������� 42

YOUR PAYROLL VACATION QUESTIONS ANSWERED 3

Published by the National Payroll Institute, Toronto, Ontario, Canada

YOUR PAYROLL VACATION QUESTIONS ANSWERED 4

Without exception, employment/labour standards in all jurisdictions in Canada provide employees

YOUR PAYROLL VACATION QUESTIONS ANSWERED 5

Steven Van Alstine, PLP, CAE

YOUR PAYROLL VACATION QUESTIONS ANSWERED 6

National Payroll Institute

YOUR PAYROLL VACATION QUESTIONS ANSWERED 7

EMPLOYMENT/LABOUR STANDARDS LEGISLATION

Employment/labour standards legislation is specific to each jurisdiction. Fourteen different

YOUR PAYROLL VACATION QUESTIONS ANSWERED 8

YOUR PAYROLL VACATION QUESTIONS ANSWERED 9

GREATER RIGHT OR BENEFIT

If an employment contract or a collective bargaining agreement provides a greater right or benefit to

YOUR PAYROLL VACATION QUESTIONS ANSWERED 10

Greater benefit clearly defined:

• four weeks of regular base salary/wage; or

Under employment/labour standards legislation, an employer must be able to produce records to

VACATION REFERENCE YEAR & ENTITLEMENT PERIOD

YOUR PAYROLL VACATION QUESTIONS ANSWERED 11

Vacation with pay is an entitlement addressed by legislation in every jurisdiction of Canada. It

The purpose of the legislation governing vacation is twofold:

• To provide an employee with time off work

YOUR PAYROLL VACATION QUESTIONS ANSWERED 12

Vacation pay is calculated as a percentage of gross vacationable earnings in all jurisdictions

Under Canada’s employment/labour standards legislation, vacation pay is accrued on earnings

YOUR PAYROLL VACATION QUESTIONS ANSWERED 13

ACCRUAL OF VACATION WHILE ON MATERNITY & OTHER LEGISLATED

YOUR PAYROLL VACATION QUESTIONS ANSWERED 14

• Multiply the average weekly wage by 2 or 3, depending on years of service.

YOUR PAYROLL VACATION QUESTIONS ANSWERED 15

YOUR PAYROLL VACATION QUESTIONS ANSWERED 16

Upon termination, the employee’s vacation pay entitlement is calculated as follows:

Prior Year Vacationable Earnings $26,000

Vacation Rate x 4 per cent

Vacation Indemnity $ 1,040

Vacation Indemnity Paid to Date $ 500

Remaining Vacation Pay $ 540

Current Year Vacationable Earnings to Date $ 6,500

Vacation Rate x 4 per cent

Vacation Pay Earned $ 260

Total Vacation Pay Owing on Termination $ 800

DEDUCTIONS FOR OVERPAYMENTS OF VACATION PAY

YOUR PAYROLL VACATION QUESTIONS ANSWERED 17

When an employer has a policy of granting vacation in advance, an employee acknowledgement

ESTABLISHING A VACATION POLICY

• Provides consistency across all departments of an organization.

• Ensure that it is clear and concise.

YOUR PAYROLL VACATION QUESTIONS ANSWERED 18

VACATION REFERENCE YEAR & ENTITLEMENT PERIOD �� 11

ACCRUAL OF VACATION WHILE ON MATERNITY & OTHER LEGISLATED LEAVES �� 14

DEDUCTIONS FOR OVERPAYMENTS OF VACATION PAY �� 17

SECTION 2: TABLES & TEMPLATES �� 22

TABLE 2.2: EMPLOYER OBLIGATIONS REGARDING VACATION �� 23

TABLE 2.3: VACATION POLICIES PERMITTED BY JURISDICTION �� 25

TABLE 2.4: VACATIONABLE EARNINGS BY JURISDICTION �� 26

TABLE 2.6: RECOVERY OF ADMINISTRATIVE ERRORS OR ADVANCES NOT EARNED �� 28

TEMPLATE 2.7: ONLINE VACATION REQUEST EXAMPLE �� 30

SECTION 3: QUESTIONS & ANSWERS BY TOPIC �� 32

SECTION 4: QUESTIONS AND ANSWERS BY JURISDICTION �� 42

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