13 Nov How To Calculate Stat Pay in Ontario
Everybody loves statutory holidays in Ontario! Unless you’re the one having to calculate it. But not to worry, because this guide is here to help. To calculate Stat Pay in Ontario is fairly straight forward, even if it is time consuming. If you’d prefer to save that time to other activities (even maybe activities more fun than payroll, if you can imagine that!), then consider signing up for a 30 day free trial of Payroll Connected, where all this messiness below could be done for you automatically by Canada’s only fully automatic payroll processing software.
However, if you’re not yet ready to save time, then here’s the steps you need to follow to calculate Stat Pay in Ontario.
Ontario officially has nine public holidays:
1. New Year’s Day
2. Family Day
3. Good Friday
4. Victoria Day
5. Canada Day
6. Labour Day
7. Thanksgiving Day
8. Christmas Day
9. Boxing Day
These days can be moved from their original dates, if both the employer and employees agree to do so. If moved, then all Stat Pay and Stat Worked calculations will then be based on that newly agreed day to observe that Stat.
To Qualify for Stat Pay
An employee must work their entire scheduled shift before, on (if applicable), and after the Statutory Holiday, unless they had reasonable cause for missing all or part of their shift. This is known as the ‘First and Last Rule’. Note that the shift before and after the Stat Day doesn’t mean the shift has to be on the day immediately before and after the day of the stat day itself; it just means they had to have worked their most recent shifts before and after that Stat Day date.
The ‘Last’ shift can be tricky though, as a Stat Day may fall on the last day of the pay period. So how are you to know if the employee will show up for their full shift after the Stat Day has passed? According to Ontario Labour Standards, you can withhold the Statutory Holiday Pay and Stat Worked premium portion of their pay until they’ve actually worked their ‘Last’ shift (and then pay the Stat Pay and Stat Worked premium portion on the next payroll run). However, most employers tend to just pay the Stat Pay and Stat Worked premium with the assumption that the employee will show up and work their next shift. The choice is yours.
Stat Worked Premium
If an employee works on a Statutory Holiday, then they are entitled to a Stat Worked premium wage of 1.5x their regular wages. For example, if an employee makes $20/hr, and they work 8 hours on a Stat Day, then instead of 8hr x $20 = $160.00 in wages, they will earn 8hrs x ($20 x 1.5) = $240.00 in wages. Even though this wage is similar to an overtime wage, be clear that it is NOT an overtime wage. These hours are considered to be at a premium regular wage, so be sure to include Stat Worked hours into the weekly hours total when calculating weekly overtime.
Definitions for Stat Pay
Now that we have the preliminary bits out of the way, let’s dig into how to calculate the actual Stat Holiday Pay. The definition straight from the Ontario Labour Standards is:
“The amount of public holiday pay to which an employee is entitled is all of the regular wages earned by the employee in the four work weeks before the work week with the public holiday plus all of the vacation pay payable to the employee with respect to the four work weeks before the work week with the public holiday, divided by 20.”
The first thing to define is the Work Week. This is a seven-day repeating period on which all your payroll calculations should be made. The simplest, and therefore recommended, work week is Sunday to Saturday. The work week should be known to the employees and only be changed if needed for the long term, by notice to the employees.
The next thing to define is Regular Wages. This includes their hourly wages for regular hours worked and premium wages for hours worked on a Stat Holiday, but do not include bonuses, commissions, or overtime wages.
Calculating Statutory Holiday Pay
Now we can get down to calculating the actual pay. Let’s say the Stat Day falls on Canada Day (July 1st), which happens to be a Monday, and our work week is the typical Sunday to Saturday.
Step 1: Find the end of the previous work week (in this case it would be Saturday, June 29th)
Step 2: Add up all Regular Wages, Vacation Pay paid, and paid Stat Pay(if applicable) in this 4 week period previous to the Stat Pay work week. This is now all the regular pay from June 2nd to June 29th.
Step 3: Add up all Regular Hours worked (including previously paid Stat Pay hours if applicable) in the same period (from June 2nd to June 29th in this example)
Step 4: Now take the added up Regular Pay from Step 2, and divide this number by 20 to arrive at this employee’s Stat Pay. Do the same for the added up Regular Hours worked to determine their Stat Pay Hours
Now, because everyone loves an example, let’s run through one. Janine worked 8 hours a day at $20 per hour, and got a Vacation Pay of 4% paid out on each paycheck. So from June 2nd to June 29th, she worked 160 hours. Her total Regular Wages for the Stat Day period is therefore 160 hrs x $20 = $3,200.00
The vacation pay for this period would be $3,200.00 x 4% = $128.00
So the total Regular Pay for the period is $3,328.00 and 160 hours
Now just divide these numbers by 20 to arrive at the Stat Pay numbers:
$3,328.00 / 20 = $166.40 Stat Pay
160 hrs / 20 = 8 hrs Stat Hours
For all the details and further information, please consult Ontario Labour Standards website by going to: https://www.ontario.ca/document/your-guide-employment-standards-act-0
Or if you want to avoid all this calculation mess, be sure to sign up for a free trial of Payroll Connected, and let our software do it all for you, automatically and accurately.