Overtime pay or paid time off
How Banked Overtime Works in Canada
Learn why banked-overtime rules, conversion rates, written-agreement requirements and use-by deadlines differ across Canada.
Key point
Banked overtime is not a national formula. A jurisdiction may require a written agreement and may credit paid time off differently from the cash overtime premium.
- First calculate the overtime hours under the correct jurisdiction.
- Then apply that jurisdiction’s banked-time conversion and deadline.
- Unused banked time may need to be paid when employment ends.
A safe calculation workflow
Identify the work jurisdiction, confirm coverage and calculate overtime hours before deciding how those hours are settled. Keep the agreement, overtime dates, credited balance, time taken and any payout on the wage record.
Why province-specific rules matter
Ontario generally uses 1.5 hours of paid time off for each overtime hour under an agreement. Alberta’s current basic rule permits at least one hour of paid time off for each overtime hour under a written agreement, while cash overtime remains at least 1.5 times the wage. BC credits overtime wages to a time bank after a written employee request.
Unused banks and termination
Deadlines and payout rates are statutory. Do not erase or pay a balance at straight time without checking the governing rule, the wage rate tied to the hours and any collective agreement.
Related WageWise resources
Frequently Asked Questions
How does banked overtime work in Canada?
Banked overtime allows an employee to take paid time off instead of cash overtime pay. Under provincial laws, banked hours must be credited at 1.5 hours of paid leave for every 1 hour of overtime worked.
What happens to banked overtime if an employee resigns or is terminated?
All unused banked overtime hours must be paid out in cash at the employee’s regular wage rate on their final paycheque.
Official sources
Rules can change and special occupations, agreements or facts can alter the result. Confirm the current official rule for the jurisdiction where the work is performed.