Statutory Holiday Pay in Canada: A Payroll Compliance Essential
Statutory Holiday Pay in Canada: A Payroll Compliance Essential
Statutory Holiday Pay in Canada: A Payroll Compliance Essential
Statutory holiday pay (often referred to as stat pay or public holiday pay) is a legislated employment entitlement that employers must calculate and administer accurately. Proper statutory holiday pay administration is an important part of payroll compliance and helps employers meet their obligations under federal, provincial, and territorial employment standards legislation.
What Is Statutory Holiday Pay?
Statutory holiday pay is compensation that eligible employees receive for designated public holidays recognized under employment standards legislation. Depending on the jurisdiction, eligible employees may receive:
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A paid day off for a statutory holiday;
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Premium pay for working on the holiday;
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A substitute day off with pay; or
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A combination of holiday pay and premium pay.
While the purpose of statutory holiday pay is consistent across Canada, the rules governing eligibility, calculation, and payment differ depending on the applicable legislation.
Payroll administrators should ensure statutory holiday pay is calculated and paid in accordance with the employment standards legislation that applies to each employee.
Statutory Holiday Pay Rules Differ Across Canada
One of the most common payroll misconceptions is that statutory holiday pay is calculated the same way across Canada. In reality, every province, territory, and the federal jurisdiction has its own employment standards legislation that determines:
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Which public holidays are recognized;
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Employee eligibility requirements;
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How statutory holiday pay is calculated;
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Premium pay requirements for employees who work on a statutory holiday;
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Substitute holiday provisions; and
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Record-keeping requirements.
The applicable legislation is generally based on the employee's province or territory of employment, not where the employer's head office is located.
How Is Statutory Holiday Pay Calculated?
There is no single statutory holiday pay formula used across Canada. Instead, each jurisdiction establishes its own calculation method.
Common calculation methods include:
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An average of eligible wages earned during a specified reference period;
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An average day's pay based on days worked;
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A percentage or average earnings formula prescribed by legislation; or
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Another province-specific calculation established under employment standards legislation.
For example, Ontario calculates public holiday pay using an employee's regular wages and vacation pay earned during the four work weeks immediately preceding the work week in which the public holiday occurs, divided by 20. British Columbia uses an Average Day's Pay formula based on wages earned and days worked during the previous 30 calendar days, excluding overtime wages. Federally regulated employers follow the calculation prescribed under the Canada Labour Code.
Because each jurisdiction has its own legislative requirements, payroll professionals should always verify the applicable formula before processing statutory holiday pay.
What Happens If an Employee Works on a Statutory Holiday?
Employees who work on a statutory holiday may be entitled to additional compensation, depending on the applicable employment standards legislation.
Depending on the jurisdiction, an eligible employee may receive:
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Statutory holiday pay plus premium pay;
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Premium pay and a substitute day off with pay;
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A substitute holiday with regular holiday pay; or
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Another entitlement prescribed by legislation.
Many jurisdictions require premium pay of at least 1.5 times the employee's regular wage for hours worked on a statutory holiday, although the entitlement and payment requirements vary by jurisdiction.
Employers should review the applicable legislation before processing payroll to ensure employees receive the correct statutory holiday entitlement.
What If an Employee Does Not Work on a Statutory Holiday?
Whether an employee is entitled to statutory holiday pay when they do not work on the holiday depends on the applicable employment standards legislation and whether they meet the eligibility requirements established in their jurisdiction.
In many provinces and territories, eligible employees who are given the statutory holiday off are entitled to receive statutory holiday pay for that day. However, eligibility requirements vary and may include factors such as:
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Length of employment;
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Working scheduled shifts immediately before and after the statutory holiday (unless there is reasonable cause for the absence);
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Meeting minimum work or earnings requirements during a prescribed reference period; or
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Other jurisdiction-specific eligibility criteria.
If an employee does not meet the legislative eligibility requirements, they may not be entitled to statutory holiday pay for that holiday.
For example, some jurisdictions require employees to work their last scheduled shift before and first scheduled shift after the statutory holiday unless they have a reasonable excuse. Other jurisdictions have eliminated this requirement and instead base eligibility on different criteria. As a result, employers should avoid applying one province's rules to employees working in another jurisdiction.
Payroll professionals should always verify employee eligibility under the applicable federal, provincial, or territorial employment standards legislation before processing statutory holiday pay.
Example (Illustrative Only)
Maria works full-time for a company in Ontario. Canada Day falls on a Tuesday, and her employer closes the business for the holiday. Maria does not work on Canada Day but has worked all of her scheduled shifts leading up to the holiday and meets the eligibility requirements under Ontario's Employment Standards Act, 2000.
Because Maria is an eligible employee, she is entitled to receive public holiday pay for Canada Day even though she did not perform any work on the holiday. If Maria had been required to work on the holiday instead, she may have been entitled to premium pay or another legislated entitlement, depending on the arrangement made between her and her employer under the Employment Standards Act, 2000 (Government of Ontario, 2025).
Simply not working on a statutory holiday does not automatically mean an employee is unpaid. If the employee meets the applicable eligibility requirements under their jurisdiction's employment standards legislation, they may still be entitled to statutory holiday pay.
Payroll Compliance Matters
Incorrect statutory holiday pay calculations can result in employee complaints, employment standards investigations, payroll adjustments, and potential penalties. A well-managed payroll process should ensure that:
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Employee eligibility is verified before calculating statutory holiday pay.
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The correct provincial, territorial, or federal calculation method is applied.
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Premium pay is calculated accurately when employees work on a statutory holiday.
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Payroll records clearly document statutory holiday pay and hours worked.
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Legislative changes are monitored to maintain ongoing payroll compliance.
Understanding the employment standards that apply to each employee's jurisdiction helps employers remain compliant while ensuring employees receive the statutory holiday entitlements they have earned.
Payroll Tip: Since statutory holiday pay calculations and eligibility requirements differ across jurisdictions, employers and payroll professionals should always refer to the applicable federal, provincial, or territorial employment standards legislation before processing payroll. Official government legislation remains the authoritative source for payroll compliance.
References
Canada Revenue Agency. (2025). Vacation pay and public holidays.
Government of Canada. (1985). Canada Labour Code (Part III – Standard Hours, Wages, Vacations and Holidays). Justice Laws Website.
https://laws-lois.justice.gc.ca/eng/acts/L-2/page-23.html#h-342149
Government of Canada. (2025). Annual vacations and general holidays. Employment and Social Development Canada.
https://www.canada.ca/en/services/jobs/workplace/federal-labour-standards/vacations-holidays.html
Government of Canada. (2025). Provincial and territorial employment standards offices. Employment and Social Development Canada.
https://www.canada.ca/en/employment-social-development/programs/employment-standards.html
Government of Ontario. (2025). Public holidays. Your Guide to the Employment Standards Act, 2000.
https://www.ontario.ca/document/your-guide-employment-standards-act-0/public-holidays
