- Vacation time and vacation pay side by side
- What counts as wages, and what doesn't
- Salaried employees
- When vacation pay has to be paid
- Taking the time off
- Vacation pay when employment ends
- Common anniversary dates and business sales
- Absences can reduce the vacation period
- Who isn't covered
- Cutting vacation pay
- My verdict
- Frequently asked questions
Vacation pay in Alberta is at least 4% of an employee's wages for their first 4 years and 6% from 5 years of service, alongside 2 weeks' paid vacation a year, then 3 weeks. Salaried staff are paid their regular rate while on vacation instead of a percentage.
These are the minimum standards in the Employment Standards Code, taken from the Government of Alberta's vacation page as of October 2026. A contract can give more, and if it does, Employment Standards can enforce the higher amount.
Vacation time and vacation pay side by side
| Length of employment | Annual vacation | Vacation pay (hourly, weekly, commission) |
|---|---|---|
| Less than 1 year | Not entitled unless the contract says so | 4% of wages |
| 1 to 4 years | 2 weeks | 4% of yearly wages |
| 5 years or more | 3 weeks | 6% of yearly wages |
Employees have to work a year before they earn vacation time, although an employer can agree to let someone take paid vacation early. Time spent on job-protected leave counts towards length of employment.
What counts as wages, and what doesn't
Vacation pay is worked out on wages paid for work. The Alberta definition leaves these out:
- overtime pay
- general holiday pay
- termination pay
- an unearned bonus
- tips and gratuities
- expenses and allowances
The detail most payroll setups miss: the calculation should include the previous year's vacation pay. The only way round that is to pay vacation pay frequently, every pay period or quarterly, in which case you don't calculate vacation pay on vacation pay already paid.
Salaried employees
For monthly salaried staff, you simply pay their regular rate for the time they're on vacation. Alberta gives the formula for a week: divide the monthly wage by 4.3333, the average number of weeks in a month.
When vacation pay has to be paid
- If you pay it each pay period, it has to be at least once a month.
- If it hasn't been paid out already and the employee asks, pay it at least one day before their vacation starts.
- In any case, pay it no later than the next regular payday after the vacation begins.
- Show vacation pay on the statement of earnings at the end of each pay period.
Taking the time off
Vacation has to be taken within 12 months of being earned, and employers must give it and employees must take it. It's meant to be one unbroken period, but an employee can ask in writing to split it, and half days are allowed if both sides agree. If you can't agree dates, the employer decides, with at least 2 weeks' written notice of the start date. If a general holiday falls during vacation and the employee qualifies for it, they get an extra day off with pay.
Vacation pay when employment ends
If someone leaves before completing 12 months, they're owed 4% of the wages they earned. After that, they're owed any unpaid entitlement from the previous year plus 4% or 6% of wages since they last became entitled to a vacation. It's due within 10 consecutive days after the end of the pay period in which employment ended, or 31 consecutive days after the last day of work.
One more protection: you can't make someone burn their vacation during a termination notice period unless you both agree.
Common anniversary dates and business sales
Many employers move everyone onto one vacation year to simplify payroll. Alberta allows a common anniversary date, with one condition: no employee can lose any vacation time or pay because of the switch. If you're changing over, run each person's entitlement to the changeover date first and carry it forward.
A change of ownership doesn't reset anything either. The previous owner pays all vacation pay built up to the date of transfer, and the new owner has to give any vacation time already earned.
Absences can reduce the vacation period
An employee's annual vacation period can be reduced if they were absent, in proportion to the days they were or would normally have been scheduled to work but didn't. Job-protected leave is different, because it counts towards length of employment.
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Who isn't covered
The vacation rules don't apply to licensed or registered real estate and securities salespeople, commission salespeople who sell mainly away from the employer's premises (route salespeople are covered), film extras, licensed insurance salespeople paid only by commission, and teachers.
Cutting vacation pay
You can lower a contractual rate that's above the minimum, but only for future pay periods and only after telling the employee before the pay period starts. You can never apply it to vacation pay already earned.
My verdict
Pay 4% or 6% on every regular pay cheque and show it clearly, and most of the traps disappear: no year-end catch-up, no vacation-pay-on-vacation-pay calculation and a clean final cheque. Then make sure people still take their time off, because paying the percentage never replaces the vacation itself, and the 12-month window to take it keeps running either way. For the other provinces, compare vacation pay in Ontario, and check the holiday overlap in BC's statutory holiday rules if you run teams in both.
Frequently asked questions
Is vacation pay 4% in Alberta?
Yes, 4% of wages for employees with fewer than 5 years of service, and 6% once they reach 5 years and are entitled to 3 weeks' vacation.
Is overtime included in vacation pay in Alberta?
No. Overtime pay, general holiday pay, termination pay, unearned bonuses, tips and allowances are left out of the wages used for vacation pay.
Can my employer pay out vacation instead of giving time off?
No. Employers must give vacation time and employees must take it, even if vacation pay has already been paid on each cheque.
Can vacation be taken in half days in Alberta?
Yes, if the employer and employee both agree. Otherwise vacation is meant to be one unbroken period unless the employee asks in writing to split it.
Does Alberta vacation pay include last year's vacation pay?
Yes, the calculation should include the previous year's vacation pay, unless vacation pay is paid out frequently, such as every pay period or quarterly.
When do I get vacation pay after quitting in Alberta?
Within 10 consecutive days after the end of the pay period in which employment ended, or 31 consecutive days after the last day of employment.
