The Difference Between Vacation Time and Vacation Pay

  • HR Policies
the-difference-between-vacation-time-and-vacation-pay
Peninsula Logo

Peninsula Team, Peninsula Team

(Last updated )

Each province has its own laws on how much vacation time and vacation pay employers must give their employees. In Alberta, employers must generally provide employees with both once they become eligible. Vacation pay and vacation time are different things, and in order to be compliant with the law, employers must understand how to provide both correctly.

Employee Eligibility

According the Employment Standards Code (ESC), employees in Alberta become eligible for vacation time with vacation pay after one year of employment. This means they must work one year before they can take any vacation and be paid for their time off. Employers may choose to provide employees with their vacation entitlements earlier than this, however they are not legally required to do so.

Vacation Time

The amount of time employees receive annually for vacation depends on how long they have been with the same employer. Employees who have worked for the same employer for 4 years or less are entitled to 2 weeks of vacation time each year. Employees who have been employed longer than 5 years are entitled to 3 weeks. Vacation time must be provided by employers and must be taken by employees.

Vacation Pay

An employee’s vacation pay is based on their regularly earned wages. When employees are paid monthly, their vacation pay for each week is calculated by dividing their monthly earnings by 4.3333. The employer must then pay the employee for each week of vacation time taken. For employees that are paid hourly, weekly, by commission or incentive pay, employers must pay them 4% of their yearly wages if they’ve employed them for 4 years or less, and 6% of their yearly wages if they’ve employed them for over 5 years.

What is the difference?

Vacation time is the length of time employees may take off work, and vacation pay is the amount of pay employers must provide their employees when they take this time off.

Need more help with calculating vacation pay?

Call our HR advisors to receive assistance with paying your employees correctly for their vacation time. We can answer your questions on vacation pay and other topics, including leaves of absence, absenteeism and statutory holidays: 1 (833) 247-3652.

Related articles

  • drugs weighing on a scale

    Blog

    Olivia CicchiniEmployment Law Expert
    • HR Policies
  • Woman on vacation road trip

    Blog

    Kiljon ShukullariHR Advisory Manager
    • HR Policies
  • cyber security

    Blog

    Ming LeeVice President - IT
    • HR Policies
Back to resource hub

Try Peninsula Canada today

Find out what 6500+ businesses across Canada have already discovered. Get round-the-clock HR and health & safety support with Peninsula.

Speak to an expert 24/7

Sign up to our newsletter

Get the latest news & tips that matter most to your business in our monthly newsletter.