All employees, including part-time and managerial staff, are entitled to a paid vacation in Canada. However, just how much vacation time an employee receives and how much vacation pay an employee earns are two separate issues.

Vacation time

  • Every employee, everywhere in Canada (except those specifically exempt) has to take two weeks off per year; three if you’re in Saskatchewan. This vacation entitlement year can be a calendar year, an employee’s anniversary date, or a date chosen by the company, and vacations have to be taken between 4 to 12 months of when they’re earned, depending on what province or territory you’re in.
  • Some jurisdictions have requirements surrounding how vacation time is divided up. Employees might only be able to take a vacation in a single two week chunk, or they might be allowed to take it in two separate weeks or in one day increments.
  • If a person’s vacation time overlaps with a statutory holiday, they are entitled to an extra day of vacation. However, they may also agree to take that extra day at a later time.
  • Employers actually have the right to determine when employees take their vacations, subject to reasonable notice, even though many workplaces allow employees to choose their own vacation dates. In fact, employers are required to ensure that employees take their required two weeks vacation.
  • Employers cannot force employees to use up any unused vacation when they are going to be terminated, i.e., during the notice period leading up to the employee’s termination. In the same vein, employees cannot be paid in lieu of forfeiting the minimum vacation time, unless they are being terminated.

Vacation Pay

  • On top of regular earnings, employers need to add a certain amount for vacation pay. This is calculated as a percentage (usually four percent or higher) of vacationable earnings.
  • Vacationable earnings are defined differently in every province and/or territory, and not all compensation earned by an employee counts as vacationable. Saskatchewan is slightly different from other jurisdictions because the province calculates vacation pay as a fraction of earnings, not as a percentage of earnings.
  • Vacation pay is usually paid out when employees take their vacation, but in some jurisdictions, employees may receive their vacation pay on their work-anniversary date or on every paycheque instead.

Get tips and guidelines for creating and managing a rock-solid paid time off policy for your organization in our latest ebook: The Smart Guide to Managing Employee Paid Time Off in Canada.

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