Can You Cash Out Vacation Pay in Alberta? Your Rights Explained

Can You Cash Out Vacation Pay in Alberta?

Yes — in some cases, vacation pay can be paid out instead of being taken as time off.

However, it depends on:

• How your employer structures vacation pay
• Whether you’ve taken your vacation time
• The rules under Alberta’s Employment Standards Code (ESC)

What Does “Cashing Out Vacation Pay” Mean?

Cashing out vacation pay means:

• You receive your vacation pay as money, instead of taking time off work.

This often happens when:

• Vacation pay is added to each paycheque
• You don’t take your vacation days
• Your employment ends

Is It Legal To Pay Vacation Pay On Every Paycheque?

Yes — in Alberta, employers can include vacation pay on each paycheque.

This is common in:

• Part-time roles
• Temporary or contract positions

Can You Choose to Cash Out Vacation Pay Instead of Taking Time Off?

Not always.

Even if you’re paid vacation pay regularly, you are still entitled to take vacation time.

Employers must ensure:

• You receive your vacation pay
• You are given your minimum vacation time

What Happens If You Don’t Take Your Vacation?

If you don’t use your vacation time:

• You are still entitled to vacation pay
• Employers may require you to take your vacation within a certain period

Vacation time generally must be taken within 12 months after it is earned.

Can Your Employer Force You to Take Vacation Instead of Paying It Out?

Yes — in many cases, employers can require you to take vacation time.

They can:

• Schedule your vacation
• Require you to use your entitlement

When Is Vacation Pay Paid Out?

Vacation pay may be paid:

• Before your vacation
• During your vacation
• On each paycheque
• When your employment ends

What Happens to Vacation Pay When You Quit or Are Fired?

If your employment ends:

• Your employer must pay out any earned but unused vacation pay

This applies whether you:

• Quit
• Were laid off
• Were terminated

Can an Employer Refuse to Pay Out Vacation Pay?

No — employers can’t withhold earned vacation pay.

If they do:

• It may violate Alberta employment standards
• You may be entitled to recover unpaid wages

What If Your Employer Is Handling Vacation Pay Incorrectly?

Common issues include:

• Paying the wrong percentage (4% vs 6%)
• Not paying out unused vacation
• Misclassifying employees

If something doesn’t seem right, it’s worth having your situation reviewed.

FAQ: Cashing Out Vacation Pay in Alberta

Can I request a payout instead of taking vacation?

Sometimes — but employers are not always required to approve this.

Is vacation pay separate from vacation time?

Yes — you are entitled to both.

Do I still get vacation pay if I don’t take time off?

Yes — vacation pay must still be paid.

Can vacation pay be rolled over?

Vacation pay must still be paid, even if time is not taken.

Think Your Vacation Pay Is Being Handled Incorrectly?

If your employer isn’t following Alberta’s vacation pay rules, you could be owed money.

Even small errors can add up over time.

At Samfiru Tumarkin LLP, our employment lawyers in Alberta can review your situation and explain your options.