Payroll FAQ – Part 2


This is the second post of our payroll FAQs. A reminder that these are general rules, for more specifics please visit the Alberta website through the links in the post. It is important to note, these are the minimum standards that must be met in Alberta. You are free to give your employees more than what is outlined below.


Vacation Pay

Vacation pay is something all employers are required provide for their employees and employees must use their vacation time within 12 months from when they earned it.

Employees are not eligible for vacation pay until they have been employed for a year, however an employer can allow for vacation before the year is over.

Employees earn 2 weeks of vacation for 1-5 years of employment and 3 weeks of vacation for 5 years and over. This time must be given in one unbroken period, unless the employee has requested to have it split up.

Employers can deny vacation time for operational reasons and decide when their employee takes the time. However, an employee must be given 2 weeks notice of the assigned time off.

There are some exceptions for who receives vacation pay and how it is paid. For a full list, you can check out the Alberta government website, here. The most notable exception is Construction Workers. Their employers are not required to give them vacation time, but they do need to pay 6% vacation pay on each pay cheque.

How do you pay it?

Vacation pay can either be A) Paid out on every pay cheque B) Accrued for use when actual vacation is taken. If option B is selected, the employee must receive their vacation pay no later than the first pay period after the vacation has been taken.

For the first 5 years, vacation pay is calculated as 4% of the yearly wages, after 5 years it is 6%.

When calculating vacation pay, the following are not included:

  • Overtime
  • General Holiday pay
  • Termination pay
  • Tips
  • Expenses and allowances

If an employee is terminated or leaves before the first year, you must pay them 4% of their wages on their final cheque for their vacation pay.


General Holidays

What are they?

General Holidays, or as they are more commonly referred to statutory holidays, are paid days off work legislated by the provincial government.

In Alberta there are 9 mandatory statutory holidays and 3 optional ones. Each of these are listed in the chart below for your reference.

General Holiday Mandatory/Optional 2019 2020
New Years Day Mandatory January 1 January 1
Family Day Mandatory February 18 February 17
Good Friday Mandatory April 19 April 10
Easter Monday Optional April 22 April 13
Victoria Day Mandatory May 20 May 18
Canada Day Mandatory July 1 July 1
Heritage Day Optional August 5 August 3
Labour Day Mandatory September 2 September 7
Thanksgiving Day Mandatory October 14 October 12
Remembrance Day Mandatory November 11 November 11
Christmas Day Mandatory December 25 December 25
Boxing Day Optional December 26 December 26


How are they paid?

General holidays are to be paid to most employees immediately upon their employment. However, there are certain situations when you do not have to pay an employee for a general holiday, they are:

  1. An employee does not show up to work when they are scheduled to work on the general holiday
  2. An employee is absent without the employer’s consent on their regular working days surrounding the general holiday.

When paying an employee for a general holiday, there are 2 situations that can arise:

Did not work on general holiday

Pay the employee Average Daily Wage (5% of Wages + Vacation Pay + General Holiday Pay from the previous 4 weeks)

Worked on the general holiday

Employers can choose one of the below 2 options:

  • Pay Average Daily Wage plus 1.5x employees time worked on that day (including overtime)
  • Pay regular wages plus provide a future day off paid with their Average Daily Wage

If you chose the second option and the employee leaves the business before they take their day off, you must pay them their average daily wage on the final pay cheque.


You can check out the specifics of general holiday pay, here.

As always, if you have any questions about payroll, give us a call today!