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Is the vacation pay amount added to regular paycheck amount?

By John R Mott |

Lucille asked:

Is the vacation pay amount added to regular paycheck amount?

John R Mott answered:

Your question seems to imply that you might be an employer.

When an employee's entitlement to vacation is paid out, the amount is added to the regular pay for that pay period for the purpose of calculating the appropriate payroll deductions for income tax, CPP contributions and EI premiums.

Also, vacation pay is added to regular pay and reported as a single amount in the same box on the annual T4 tax slip.

It is usual and advisable, however, to itemize vacation pay as a separate amount on the employee's pay stub. This enables the employee to understand his or her pay cheque and to confirm that the employer's obligations have been fulfilled.

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