This article explains how to use Wagepoint to calculate statutory holiday pay for your hourly employees, including:
- how Wagepoint calculates statutory holiday pay (using the federal method)
- how to load holidays for the upcoming year
- how to adjust holiday pay as needed to ensure compliance with local regulations
What's the difference between statutory holiday pay and vacation pay?
Statutory holiday pay is a mandated payment you give employees when a public holiday falls on a workday. It applies only to hourly employees, not salaried employees.
Vacation pay, on the other hand, is earned by employees over time and is used for their planned time off – it's something they're entitled to take and be paid for.
How does Wagepoint calculate statutory holiday pay?
If you would like Wagepoint to calculate statutory holiday pay, you’ll need to load the holidays at the beginning of each tax year. By default, there are no holidays loaded into your account. The holidays will need to be reloaded annually prior to running the first payroll of the new tax year.
Wagepoint uses the federal method, also known as the General Holiday formula, to calculate statutory holiday pay. This method is for federally-regulated industries/workplaces that fall under the Canada Labour Code. This method uses 1/20th of wages earned in the four weeks immediately before the holiday. Applicable holidays will be assigned according to the employee’s work location.
The federal method for statutory holiday pay calculation is used in Canada to determine how much a federally regulated employee should be paid for a statutory holiday. Under this method, the calculation is based on a percentage (5%) of the employee's earnings during a specific period (the four weeks immediately before the holiday).
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Sarah’s regular hourly wage is $18.00 per hour at 8 hours per day.
In the four weeks leading up to the holiday, Sarah worked all 5 days of each week and as a result, was paid $2,880.00:
- $18.00 per hour at 8 hours = $144.00 per day
- $144.00 per day multiplied by 5 days per week = $720.00 per week
- $720.00 per week multiplied by 4 weeks = $2,880.00
Next, we’ll determine the Statutory Holiday Pay. Under the federal method, Sarah's statutory holiday pay is calculated as a percentage of her wages earned in the four weeks immediately before the holiday. For federally regulated employees, this percentage is 1/20th (5%) of the average daily earnings:
- Statutory Holiday Pay = 1/20th of wages earned in the four weeks immediately before the holiday
- Statutory Holiday Pay = $2,880.00 x 0.05 = $144.00 (in this case, because Sarah’s wages did not vary, she is entitled to her regular daily wage of $144.00).
If Sarah worked on the public holiday, she may be eligible for additional statutory holiday pay. If Sarah is to also be paid out at 1.5 times her regular rate in addition to her regular holiday entitlement pay, the hours would need to be added manually using the Statutory Holiday Worked income code. The rules for when a statutory holiday falls on a regular work day and is worked varies by jurisdiction. In order to ensure jurisdictional compliance, consult the Labour Program/Ministry of Labour for the employee’s local jurisdiction to determine eligibility.
The federal method will always assume statutory holiday pay eligibility for all hourly employees. If it is deemed that an employee is ineligible due to local labour regulations, the assigned statutory holiday pay will need to be removed manually before submitting the payroll for processing.
Note: It is important to verify with the Labour Program or Ministry of Labour for the applicable jurisdiction(s) to ensure that the automatically assigned statutory holiday pay amount for each holiday meets the minimum pay requirements according to legislation for each employee.
Set up statutory holiday pay calculations for the year
If you would like Wagepoint to calculate statutory holiday pay, you’ll need to load the holidays at the beginning of each tax year. By default, there are no holidays loaded into your account.
Reminder: Statutory holiday pay calculates for your hourly employees, not salaried employees.
1. Navigate to the Company > Company holidays tab.
2. Click Load stat holidays.
3. Review the list of statutory holidays and remove any that do not apply to your province(s).
Employers must refer to the relevant provincial employment standards for more accurate statutory holiday calculations and eligibility requirements.
Add an additional holiday
1. Navigate to the Company > Company holidays tab.
2. Click Add a holiday.
3. In the window, enter the holiday details:
- Holiday of: Enter a name of the holiday you want to track.
- Date: Use the calendar date picker to select the date of the holiday.
- Hours: Enter the number of hours your employees can take off for the holiday. Hours don't impact the calculation. This is only relevant if you use Luna.
3. Click Save changes.
FAQ: Statutory holidays
- We recommend that you double check your payroll to ensure that the statutory pay calculations are working as required. If you've processed an off-cycle in the last four weeks, this may impact your statutory holiday calculation from occurring. If this is the case, please reach out to support and one of our friendly agents can assist you.
- For hourly employees who work on a statutory holiday, use the income code Time worked on a holiday as it automatically calculates the hours worked at 1.5 x the hourly rate. Learn more about adding income types.
- Navigate to the Company > Company holidays tab. In the list of loaded statutory holidays, locate the relevant holiday and click the trash icon.
- If you don’t want statutory holiday pay automatically calculated for your hourly employees.
1. Navigate to the Company > Company holidays tab.
2. Click Remove all holidays. - With banks closed during certain holidays throughout the year, employers must often process their payrolls early in order to pay their teams on time. To make payroll processing around bank holidays easier, we’ve created the Wagepoint Canada bank holidays and processing deadlines schedule.
- No, only the federal method is supported. If you don’t want to use the federal method, you’ll need to manually calculate any statutory holiday pay and use an income code to pay out your employees. If you do not load the statutory holidays each year, then no calculations will be made by Wagepoint.
- Statutory holiday pay is a mandated payment you give employees when a public holiday falls on a workday. Vacation pay, on the other hand, is earned by employees over time and is used for their planned time off – it's something they're entitled to take and be paid for.