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HR & Payroll Glossary

Canada HR Glossary

Canadian employment law operates on two levels: federal legislation (Canada Labour Code for federally regulated industries) and provincial/territorial employment standards acts that govern most workers. Employers also have significant payroll obligations to the Canada Revenue Agency, including CPP and EI deductions, T4 slips, and ROEs. The terms below cover the key concepts every Canadian employer must understand.

1Record of Employment (ROE)

An ROE is a document that employers must issue to Service Canada when an employee's insurable earnings are interrupted — including upon termination, layoff, or any other interruption of earnings — to enable the employee to apply for Employment Insurance benefits.

ROEs must be issued within 5 calendar days of an interruption of earnings (for paper ROEs) or by the second Wednesday after the end of the pay period in which the interruption occurred (for electronic ROEs). Failure to issue an ROE on time is an offence under the Employment Insurance Act. The ROE contains 22 blocks of information including insurable earnings, hours of insurable employment, and the reason for interruption.

How ClockIt Helps

ClockIt captures the detailed pay and hours data needed to populate all required ROE blocks accurately, ensuring HR can issue timely and correct records of employment to Service Canada.

2Employment Insurance (EI)

Employment Insurance is a federal program that provides temporary income replacement to eligible workers who lose their job through no fault of their own, are ill, pregnant, caring for a newborn or sick family member, or compassionate care leave.

Employers must deduct EI premiums from employees' insurable earnings and remit 1.4 times the employee's premium as the employer's share. In 2025, the employee EI premium rate is 1.64% on insurable earnings up to the maximum insurable amount ($65,700). Employers who fail to remit premiums correctly face interest and penalties from the CRA.

How ClockIt Helps

ClockIt tracks insurable hours and earnings for each employee, ensuring the correct EI deductions are applied and that ROE data aligns with CRA reporting requirements when employment ends.

3Canada Pension Plan (CPP) / Quebec Pension Plan (QPP)

The CPP is a mandatory contributory social insurance program that provides retirement, disability, and survivor benefits; QPP is the equivalent program for Quebec employees.

In 2025, employees and employers each contribute 5.95% on pensionable earnings between the Year's Basic Exemption ($3,500) and the Year's Maximum Pensionable Earnings ($71,300), plus an additional CPP2 contribution of 4% on earnings between the first and second ceiling ($81,900). Both employer and employee contributions are required; failing to remit incurs the Penalty for failure to deduct and 10% interest.

How ClockIt Helps

ClockIt calculates CPP and CPP2 contributions precisely per employee, applying the correct YTD maximums and generating the CRA-ready payroll data for each remittance period.

4T4 Slip (Statement of Remuneration Paid)

A T4 slip is a CRA tax document that employers must issue to each employee by the last day of February each year, summarising total employment income paid and all deductions withheld during the preceding calendar year.

Employers must file the T4 summary and all T4 slips with the CRA electronically (if filing 6 or more) by 28 February. A T4 is required for each employee who received employment income, including salary, wages, tips, bonuses, taxable benefits, and RRSP contributions made by the employer. Late filing penalties start at $100 and increase based on the number of missing slips.

How ClockIt Helps

ClockIt maintains comprehensive YTD earning and deduction records per employee, feeding the exact income and withholding data needed by payroll systems to produce accurate T4 slips on time.

5Vacation Pay

Vacation pay is the minimum payment that provincial employment standards legislation requires employers to provide when employees take vacation; rates vary by province and length of service.

Most provinces set the minimum at 4% of gross wages (equivalent to 2 weeks), increasing to 6% after a qualifying period (e.g., 5 years in Ontario). Quebec mandates 6% from the start. Employers may pay vacation pay as a percentage on each paycheck (common for hourly/seasonal workers) or accrue it and pay it out when vacation is taken. Vacation pay must be paid on regular wages and any insurable earnings.

How ClockIt Helps

ClockIt accrues vacation pay at the correct provincial rate based on each employee's earnings and years of service, tracking the balance available and ensuring the correct amount is paid out when leave is taken.

6Statutory (Public) Holidays

Canada has 9 federal statutory holidays; each province and territory also legislates its own list of public holidays, with employees generally entitled to a paid day off or premium pay if they work on those days.

Federal holidays include New Year's Day, Good Friday, Victoria Day, Canada Day, Labour Day, National Day for Truth and Reconciliation, Thanksgiving, Remembrance Day, and Christmas. Ontario has 9 public holidays under the ESA, while BC has 11 under the Employment Standards Act. Employers who require employees to work on a statutory holiday typically owe 1.5× regular pay plus a substitute day off, or 2× pay with no substitute (jurisdiction-dependent).

How ClockIt Helps

ClockIt's Canadian public holiday calendar covers all 13 provinces and territories, automatically calculating stat-day pay entitlements and substitute day obligations for each employee based on their province of employment.

7WSIB / WCB (Workers' Compensation)

The Workplace Safety and Insurance Board (Ontario) and Workers' Compensation Boards (other provinces) are mandatory insurance systems providing income replacement and medical benefits to employees injured at work.

Employers register with and pay premiums to their provincial workers' compensation board, calculated as a rate per $100 of insurable payroll based on industry risk class. Premiums are adjusted based on the employer's claims history (experience rating). Employers who fail to register or under-report payroll face retroactive premium assessments, penalties, and loss of civil liability protection.

How ClockIt Helps

ClockIt's payroll integration provides accurate insurable earnings by classification code, ensuring workers' compensation premium bases are correctly reported to the relevant provincial board.

8Provincial Employment Standards

Each Canadian province and territory has its own Employment Standards Act (ESA) or equivalent legislation that sets minimum employment conditions — including minimum wage, overtime, termination notice, and leave entitlements — that apply to most non-federally regulated workers.

Key examples: Ontario's minimum wage is $17.20/hr (2025); BC's is $17.40/hr. Overtime thresholds also vary: Ontario requires overtime after 44 hours/week, while BC triggers it after 8 hours/day or 40 hours/week. Termination notice periods scale with years of service in most provinces. Employers with operations in multiple provinces must apply the correct provincial standard to each employee's location.

How ClockIt Helps

ClockIt applies province-specific overtime rules, minimum wage bands, and statutory leave entitlements per employee based on their work location, ensuring multi-province employers remain compliant in every jurisdiction.

More workforce terms explained

Beyond the Canada-specific terms above, these 38 definitions cover the time tracking, leave and payroll concepts that apply wherever you operate.

Time Off

Absence ManagementThe strategic approach to reducing employee absenteeism and managing sick leave, disabilities, and family leave.Bereavement LeaveBereavement leave is time off after the death of a family member — typically 3–5 days. Here's who's covered, what's typical, and which states now require it.Compensatory Time (Comp Time)The practice of offering time off in lieu of overtime pay, which is strictly regulated for non-exempt private employees.Floating HolidayA paid holiday that is not fixed to a specific calendar date, allowing employees to choose when to observe it.FurloughA furlough is a temporary unpaid leave where you keep your job and usually your benefits. Here's how it differs from a layoff, and what you may and may not do while furloughed.Leave LiabilityThe financial value of accrued but unused employee time off that sits on a company's balance sheet as a debt.Leave of Absence (LOA)A leave of absence is an extended, approved period away from work — paid or unpaid — beyond normal PTO. Here's when it applies and which types are legally protected.OOO (Out of Office)OOO stands for out of office — shorthand for being away from work and unreachable. Here's what it means, how it differs from PTO, and when to use each.Paid Time Off (PTO)PTO stands for paid time off — a single bank of paid hours covering vacation, sick and personal leave. Here's what it means at work, how accrual works, and which states must pay it out.Sick LeavePaid or unpaid time off granted specifically for health-related needs, often mandated by state or local laws.Unlimited PTOUnlimited PTO means there's no fixed leave allowance — employees take what they need with approval. Here's how it really works, and why people often take less.

Compliance

Buddy PunchingA form of time theft where one employee clocks in for another, costing businesses billions annually.DCAA ComplianceStrict timekeeping standards required for US government contractors to ensure accurate billing.FMLA (Family and Medical Leave Act)Federal law entitling eligible employees to unpaid, job-protected leave for family and medical reasons.Ghost EmployeeA fraudulent payroll scheme where a nonexistent or departed employee continues to receive pay.Independent ContractorA self-employed worker contracted to perform services, distinct from an employee for tax and labor law purposes.Meal Break ComplianceAdhering to laws that mandate uninterrupted, unpaid meal periods for employees.Predictive SchedulingLaws requiring employers to provide work schedules in advance, often called 'Fair Workweek' laws.Prevailing WageThe hourly wage, usual benefits, and overtime that must be paid to workers on government-funded construction projects.Spread of HoursA penalty pay requirement when an employee's workday spans more than 10 hours.Time Card RoundingThe practice of adjusting clock-in and clock-out times to the nearest increment, often 15 minutes.Time TheftWhen employees accept pay for time they did not actually work, including extended breaks or buddy punching.Wage GarnishmentA legal procedure requiring an employer to withhold a portion of an employee's earnings to pay a debt.Waiting Time PayFLSA requirements to pay employees for time spent waiting if they are not free to leave.

Payroll

Daily OvertimeOvertime pay calculated based on hours worked in a single day, rather than just the weekly total.Exempt EmployeeEmployees paid a salary who are not entitled to overtime pay under the FLSA regulations.FLSA OvertimeFederal regulations requiring 1.5x pay for hours worked over 40 in a workweek.Job CostingThe process of tracking expenses and time against specific projects or jobs to determine profitability.On-Call TimeTime spent waiting for work availability, which may or may not be compensated based on restrictions.Payroll AccrualsThe accumulation of liabilities, such as PTO or sick leave, that employees earn over time.Payroll FrequencyThe schedule on which employers pay their employees, effectively setting the lag between work and pay.Shift DifferentialAdditional pay provided to employees for working undesirable shifts, such as nights or weekends.

Attendance

GeofencingA location-based service that triggers actions when a mobile device enters or leaves a virtual boundary.Shift SwappingA practice allowing employees to trade shifts with coworkers to manage their own schedules and reduce absenteeism.Split ShiftA work schedule divided into two or more parts with a significant unpaid gap in between.Workforce Management (WFM)An integrated set of processes that an institution uses to optimize the productivity of its employees.

Hardware

Biometric Time ClockA time tracking device that identifies employees using unique biological traits like fingerprints or facial recognition.Kiosk ModeA feature that locks a tablet or computer into a single application for dedicated time tracking.

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