Vacation Pay In Alberta: Employee Rights

What is Vacation Pay in Alberta?

Vacation pay is money that non-unionized employees in Alberta receive while they are away from work on vacation.

This pay begins accumulating as soon as you start working — ensuring you still earn income while taking time off.

Vacation pay is governed by Alberta’s Employment Standards Code (ESC).

Difference Between Vacation Pay and Vacation Time

Vacation pay and vacation time are closely related, but they serve different purposes:

• Vacation Pay: The money you receive while on vacation, calculated as a percentage of your wages
• Vacation Time: The time off work you’re entitled to take

How is Vacation Pay Calculated in Alberta?

Vacation pay is calculated as a percentage of your total wages earned during your vacation entitlement year.

What Counts As Wages?

Vacation pay is based on:

• Regular wages (salary or hourly pay)
• Commission earnings
• Bonuses (if they qualify as wages)

It generally does not include:

• Overtime pay in Alberta
• General holiday pay
• Termination pay
• Tips or gratuities

Step-by-Step: How to Calculate Vacation Pay in Alberta

If you’re unsure how much vacation pay you’re owed, follow these steps:

Step 1: Calculate your total wages

Add up all eligible earnings over your vacation entitlement year.

Step 2: Apply your vacation pay rate

• 4% if employed less than 5 years
• 6% if employed 5 years or more

Step 3: Multiply your wages

Example:

• Total wages: $60,000
• Vacation pay rate: 4%
• Vacation pay = $2,400

How Much is Vacation Pay in Alberta?

Minimum vacation pay in Alberta is:

Is Vacation Pay Mandatory in Alberta?

Yes — vacation pay is mandatory for all employees in Alberta.

This includes:

• Full-time employees
• Part-time employees
• Temporary workers

When Is Vacation Pay Paid Out?

Vacation pay can be paid:

• Before vacation (lump sum)
• On each paycheque
• During or after vacation

Do I Get Paid for Unused Vacation in Alberta?

Yes — any unused vacation must be paid out.

If your employer refuses to pay your vacation pay, you may have a legal claim.

Vacation Pay and Termination in Alberta

If your employment ends, your employer must pay any earned but unpaid vacation pay.

This payment must be made:

• Within 7 days, or
• On your next payday

You May Be Owed More Than Vacation Pay

If you were fired without cause, you could be entitled to significant severance — potentially up to 24 months’ pay.

FAQ: Vacation Pay in Alberta

Is vacation pay taxed in Alberta?

Yes — vacation pay is considered taxable income.

Does vacation pay include overtime?

Generally, no — overtime is not included unless agreed otherwise.

Can I cash out my vacation pay?

In some cases, yes — depending on how your employer structures payments.

Do part-time employees get vacation pay?

Yes — all employees are entitled to vacation pay.

What happens if I quit my job?

You are still entitled to any vacation pay you’ve earned.

Lost Your Job?

If you’ve been fired or let go, speak with an Alberta employment lawyer at Samfiru Tumarkin LLP before accepting any offer.

You may be owed:

• Vacation pay
• Severance pay
• Additional compensation

You have up to two years to pursue your claim.