Adding statutory holiday pay in QuickBooks Online Payroll
Canadian QuickBooks Online Payroll users found statutory holiday pay confusing; the resolved answer shows where two separate pay entries go.
A recurring question in the QuickBooks Online Payroll community is how to add statutory holiday pay for Canadian employees. The accepted answer points to two built-in fields, but part of that answer can mislead payroll runners into choosing between them. In this report, we walk through the accepted solution and the correction that matters before you run payroll.
The two statutory pay fields
QuickBooks Online Payroll has statutory holiday pay enabled by default for every Canadian employee. No custom pay type is needed. When you run payroll, the software offers two columns: Stat holiday pay and Stat pay - Average daily wage.
The confusion starts when payroll runners try to decide which column applies. The accepted answer describes the first as the field for employees who worked the holiday. It describes the second as the field for those who did not. That phrasing makes the columns look like alternatives. In most provincial employment standards, they are not.
The correction that matters
An eligible employee who works on a statutory holiday is generally due two separate amounts. The first is premium pay for the hours worked on the holiday, often time and a half. The second is the statutory holiday pay itself, usually based on average daily earnings. Entering only the premium hours skips the average daily wage portion. Entering only the average daily wage skips the premium for the hours actually worked.
That distinction is the piece the accepted answer states imprecisely. The idea that Stat holiday pay is only for employees who worked is easy to read as the only entry for those employees. You still owe the average daily wage component in many provinces, so a payroll run that fills in just one column can underpay the employee. If you are paying a Canadian employee, this is the part to get right.
Checking the pay types are active
To confirm the pay types are switched on for a person, go to Payroll, then Employees, then open that employee’s record. In the Pay types area, use the edit icon and check that both Stat holiday pay and Stat pay - Average daily wage appear. Save the record.
The statutory holiday columns then show up when you run payroll. If the columns do not appear, check the employee record. Re-enable both pay types and look at the payroll screen again.
Entering the two amounts during a payroll run
When the pay period covers a statutory holiday, enter the holiday hours worked in the Stat holiday pay column. QuickBooks Online uses those hours to calculate the premium pay. In the Stat pay - Average daily wage column, enter the dollar amount you have calculated for the employee’s average daily wage. The software expects the amount in this column, so you bring the calculation with you.
The two figures are separate. An employee who did not work the holiday usually needs only the average daily wage figure on that run. An employee who did work may need both. That is usually the correct outcome for someone who worked the holiday.
Provincial rules, with Ontario as an example
Provincial legislation sets the rate and the eligibility rules, so the amount can vary by province. The accepted answer uses Ontario as an example. An employee required to work on a public holiday is paid one and a half times the regular rate for each hour worked. Ontario also treats public holiday pay as a separate entitlement from premium pay. The one and a half times rate and the average daily wage are separate obligations, not two labels for the same payment.
Check the rules for the province where the employee works. The software provides the fields, not the legal calculation.
Covered statutory holidays
QuickBooks Online Payroll keeps a standing set of Canadian statutory holidays. Some are observed across the country, such as New Year’s Day, Canada Day, Labour Day and Christmas Day. Others depend on the province, including Family Day, Victoria Day, Good Friday and Boxing Day in some regions. The list is already in the software. The relevant holiday appears in the statutory holiday columns when you run the matching pay period.
Bottom line
Treat Stat holiday pay and Stat pay - Average daily wage as two entries, not as one or the other. Work out each employee’s entitlement under the provincial rules first, then enter both amounts where they belong. Statutory holiday pay is mandatory in Canada, and QuickBooks Online turns it on automatically for all employees. The fields should be there. If they are not, check the employee’s Pay types before you go any further.