Vacation Pay – what employers need to know in Alberta


It's that time of year again when many of us start planning our winter vacations. And if you're an employer in Alberta, that means it's also time to start thinking about vacation pay. As an employer, it's your responsibility to make sure you're providing your employees with the vacation pay they're entitled to under Alberta's Employment Standards Code.

Click the link to read from the Alberta government's site:


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Vacation Pay Basics


In Alberta, all employees are entitled to at least 2 weeks of vacation after 12 months of continuous employment. After 5 years of continuous employment, employees are entitled to 3 weeks of vacation.


Calculating Vacation Pay


For employees paid by monthly salary, the employer must pay the employee's regular rate of pay for the time of their vacation. Each week that an employee is off they are entitled to vacation pay which is calculated as follows: divide their monthly wage by 4.3333. This is the average number of weeks in a month.


If an employee's wage rate varies from day to day or week to week (for example, if they're paid hourly), you'll need to calculate their average daily wage rate over the previous 4 weeks before calculating their vacation pay. For example, if an employee worked 30 hours one week and 40 hours the next week, their average daily wage rate would be ($500 + $600) / 2 = $550 ((30 hours x $500) + (40 hours x $600)) / 2 = $550).


Last Words


As an employer in Alberta, it's important that you understand your obligations with respect to vacation pay. As stated above all employees are entitled to at least 2 weeks of vacation after 12 months of continuous employment, and vacation pay of at least 4% of their wages. If you have any questions about how to calculate your employees' vacation pay or about your obligations under Alberta's Employment Standards Code.

Contact Rebecca C Penner:


If you're wondering about your employee’s vacation pay, I can help. I am a Chartered Professional Accountant with over 15 years of experience in income tax, payroll, and accounting.


Contact my team today for a free consultation to learn more:


Thanks for reading, and we hope this information helps you.




Rebecca C Penner CPA, CGA