Statutory holiday pay is compensation for holidays, like Christmas Day, when many businesses are closed. When a pay period includes a statutory holiday, enter the stat holiday pay hours in your employees' pay cheques.
Switch to QuickBooks Online Advanced Payroll.
Add statutory holiday pay as a pay type for an employee
|Note: Statutory holiday pay is mandatory in Canada, so we automatically turn the pay type on for you. You don't have to add statutory holiday pay as a pay type unless you turned it off when you first set up your employee.|
Here's how to turn statutory holiday pay on:
From the left menu, select Employees.
Select the employee by clicking on their name.
- If Stat Holiday Pay is not already added in the Additional pay section under Pay, select the edit pencil beside Pay.
- Scroll the question 3 and select the edit pencil.
- Select the Stat Holiday Pay checkbox.
|Note: Be sure to repeat these steps for any other existing employees who receive holiday pay.|
The next time you run payroll and/or create a pay cheque for the employee, the statutory holiday pay column will be displayed. You'll be able to input the applicable holiday hours into the statutory holiday field to generate the appropriate pay.
These statutory holidays are observed across Canada:
- New Year's Day
- Canada Day
- Labour Day
- Christmas Day
Depending on your location, you may also observe these statutory holidays:
- Islander Day
- Family Day
- Louis Riel Day
- Good Friday
- Easter Monday
- Victoria Day
- National Aboriginal day
- Nunavut Day
- Civic Holiday
- Discovery Day
- Thanksgiving Day
- Remembrance Day
- Boxing Day
Calculation of statutory holiday pay in the employment standards act (ESA)
As a result of Ontario’s Bill 148, the formula for the calculation of statutory holiday pay in the Employment Standards Act (ESA) was amended effective January 1, 2018, as follows:
- Total amount of regular wages earned in the pay period immediately preceding the statutory holiday, divided by the number of days actually worked in that pay period.
- For ESA purposes, regular wages are defined as wages other than overtime pay, statutory holiday pay, vacation pay (where included with each pay), premium pay, termination pay, and severance pay. For casual employees, this means that regular time worked (productive time) and paid training hours would be included as part of the calculation (overtime hours would be excluded).
This new calculation results in dollar amount, not hours. To use the Statutory Holiday Pay item in QuickBooks Online will require one additional calculation — to convert the dollar amount to hours.
Take the dollar amount you calculated via the CRA instructions and divide it by the hourly rate for the employee. This will give you the hours that you would put into QuickBooks Online. For a salary employee you get the hourly rate by dividing their Annual Salary amount by 2080 (work hours in year — 40 hours/week x 52 weeks/year).
Salary employee earns $31,200 per year. In the last pay period made $1200 and worked 10 days.
1. Calculate the hourly rate: $31,200/2080 = $15/hour Note: This step is not needed if you already know the hourly rate for the employee.
2. Calculate the dollar amount the employee should receive (CRA instructions): $1200/10 = $120 per day
3. Convert the dollar amount to hours: $120/$15 = 8 hours << This is what you would put in Quickbooks Online (Stat Holiday Pay).
For more information on which statutory holidays apply to you, visit your provincial government website or the Canada Revenue Agency (CRA) Statutory holidays website.
Now you know how to add statutory holiday pay as a pay type for an employee, what the statutory holidays are, and how to calculate statutory holiday pay in the Employment Standards Act (ESA),