Configure Vacationable Earnings by Province or Territory

Overview

Vacation dollars are calculated as a percentage of an employee’s vacationable earnings. Vacationable earnings are the earnings included when calculating vacation pay accrual.

Vacationable earnings requirements vary by province or territory. For employers with employees working across multiple Canadian jurisdictions, an earning may need to be vacationable in one jurisdiction but not another.

As of release v2026.4.0.1, you can configure a default Vacation Pay Earnings setting on a Pay Component Sub Type and create province- or territory-specific overrides where different treatment is required.

Key Benefits

• Set a global default: Apply the treatment that covers most jurisdictions.

• Targeted overrides: Add exceptions only for specific provinces or territories.

• Simplified setup: Maintain a single Pay Component Sub Type rather than creating redundant subtypes for different jurisdictions.

Important: Compliance Responsibility

Vacationable earnings requirements are established by applicable provincial or territorial employment standards legislation and vary by jurisdiction. Employers are responsible for determining which earnings must be included in vacation pay calculations.

Before configuring settings:

1. Review provincial and territorial employment standards legislation.

2. Consult guidance from the National Payroll Institute (NPI).

3. Contact the applicable employment standards authority or the NPI for specific earnings clarification.

Configuration Steps

Step 1: Locate the Pay Component Sub Type

1. Navigate to: Payroll > Payroll Setup > Pay Component Sub Type > Search

2. Search for and open the desired Pay Component Sub Type.

Step 2: Set the Default Vacation Pay Earnings Treatment

1. Locate the Canada section on the Pay Component Sub Type record.

2. Configure Vacation Pay Earnings based on the primary treatment required across most jurisdictions:

   • Checked / Yes: Included in vacationable earnings by default.

   • Unchecked / No: Excluded from vacationable earnings by default.

Step 3: Add Province or Territory Overrides

1. Select the CA Config Options tab.

2. Add any province or territory requiring treatment that differs from the default.

3. Set Vacation Pay Earnings to the required setting for that jurisdiction.

4. Save the Pay Component Sub Type.

Note: Any jurisdiction not explicitly listed under CA Config Options inherits the default setting from the main Canada section.

Configuration Examples

Summary Matrix

Example 1: Vacationable by Default with Exceptions

• Scenario: Statutory (Public) Holiday Pay is vacationable everywhere except Alberta and New Brunswick.

1. Default Configuration (Canada Section):

   Vacation Pay Earnings = Yes

2. CA Config Options Overrides:

• Result: Statutory Holiday Pay is vacationable across Canada, except in AB and NB.

Example 2: Non-Vacationable by Default with Exception

• Scenario: Meal Allowance is not vacationable by default, except in Quebec.

1. Default Configuration (Canada Section):

   Vacation Pay Earnings = No

2. CA Config Options Overrides:

• Result: Meal Allowance is excluded from vacation pay calculations nationwide, except in QC.

Post-Configuration Checklist

Before running payroll, confirm:

• [ ] Canada Section: The default setting reflects the majority rule.

• [ ] CA Config Options Tab: Only exception jurisdictions are listed with correct override flags.

• [ ] Compliance Alignment: Configuration matches provincial/territorial legislation and internal payroll policy.