The ins and outs of banking overtime in Canada



Have you heard about “time banks”, “banked time”, “banking overtime”, or “overtime banks”, but are uncertain on the specific payroll legislation that applies to your business? Payworks is here to help!

Our clients love our one-to-one service model and being assigned a dedicated, NPI-trained rep who’s there to answer the call when they have questions – like, how can I bank my employee’s overtime? We’re also here to help Canadian businesses stay informed on payroll legislation to remain compliant.

Let’s explore banking overtime in Canada and how it applies within each province and territory’s employment standard laws.

What does it mean to “bank overtime?”

You might’ve already guessed that the term “banking overtime” has many synonyms in the payroll profession. Generally, these terms – including time bank, overtime banks, banked hours, banked time, etc. – refer to an employee receiving time off as an alternative to overtime pay. Essentially, overtime hours are accumulated and then, at a later date, used in exchange for time off at the regular rate of pay.

Like other payroll legislation in Canada, the parameters for banking overtime vary by province and territory and it’s the employer’s responsibility to ensure they’re adhering to the legislation within their own jurisdiction. When it comes to overtime banking legislation, Canadian employers with employees in some jurisdictions should be aware that banked hours are only permissible with an overtime agreement or a fixed cycle averaging agreement in place. In other jurisdictions - specifically, New Brunswick - banking overtime is not permitted at all!

With that in mind, we’ll explore the employment standard laws as they pertain to banking overtime in different jurisdictions across Canada.

Provincial and territorial payroll legislation for overtime banks

British Columbia (BC) - overtime can be banked

  • Employees can make a written request to bank their overtime hours during the pay period in which they were earned.
    • At a later date, the employee can ask for their wages in the time bank in part or in full. They can be paid out in the form of time off with pay within an agreed-upon period of time. They can also request, in writing, that the time bank be closed with all earnings being paid out in full.
  • An employer can also choose to close the time bank, with one month’s written notice.
  • Overtime wages in the time bank must be used or paid within six months.
    • The employee can use the overtime wages to take time off with pay, or opt for a combination of taking some time off with pay and payment of the remaining overtime wages.

To learn more, visit:

Alberta - with an overtime agreement, overtime can be banked

  • With an established agreement in place between the employer and employee, overtime can be banked at one hour for each hour of overtime worked.
  • Employees are to use banked overtime within six months, unless the agreement states otherwise.

To learn more, visit:

Saskatchewan - with an overtime agreement, overtime can be banked

To bank time, a written agreement must be signed by the employer and employees, and a copy of that signed agreement has to be retained by the employer and distributed to each employee subject to the agreement. Typically, the agreement will outline that the employee is entitled to 1.5 hours of banked time for every hour of overtime worked. When paid out, these overtime hours are considered regular hours – meaning they’re paid at the regular hourly wage and go towards calculating overtime for the week. Within 12 months of banking the time, these hours must either be used as time off or paid out at the employee’s current regular wage rate.

Other legislative components for banking overtime in Saskatchewan include:

  • Employers cannot require employees to enter into an overtime bank agreement.
  • All employees who are eligible for overtime can request to bank it.
  • Written notice is required by either the employer or the employee within a minimum of one pay period if the overtime agreement is to end or change; if the agreement ends, employees could be required to use some or the entire overtime bank. The employer could also pay it out in its entirety.
  • If employment has ended, any banked overtime must be paid out within 14 days of the employee’s last day of work.
  • Banked overtime cannot serve as a substitute for working notice during the termination period or replace pay instead of notice.

To learn more, visit:,agreed%20to%20by%20the%20parties.

Manitoba – employees can bank overtime and take time off later

  • Employers and employees can agree in writing to bank overtime, but the agreement must permit that 1.5 hours of time will be banked and later paid at the regular rate when it’s used for each hour of overtime worked.
  • Employers must provide the time off and schedule it during the employee’s regular hours within three months of it being earned.

For more information, visit:,overtime,factsheet.html#q372.

Ontario – employees can bank time for time off in lieu

  • Employees can receive paid time off instead of overtime pay with an electronic or written agreement in place.
  • Employees are to receive 1.5 hours of paid time off at the regular rate of pay for each hour of overtime worked.
  • The paid time off must be taken within three months of it being earned, or within 12 months if otherwise agreed to electronically or in writing.
  • If employment ends, overtime pay for the overtime hours are to be received within seven days after the termination date or on what would’ve been the employee’s next pay day.

For more information, visit:

Québec – there is leave in lieu of payment of overtime

  • Employees can request that overtime be banked, or banking overtime can be a part of a collective agreement.
  • Employees are to receive 1.5 hours for each hour of overtime worked, to be paid out at a later date at the regular rate of pay.

For more information, visit:

Newfoundland and Labrador - employers and employees can agree to banked time

  • If the employee and employer have both agreed to do so, employees can bank 1.5 hours of paid time per hour of overtime worked.
  • Banked time must be taken within three months of it being earned unless an extension of up to 12 months has been agreed upon by the employer and employee.

For more information, visit:

New Brunswick – no, employees cannot bank overtime hours

As we alluded to earlier, it’s not permitted in the Province of New Brunswick for employees to bank overtime hours. Employees are to be compensated for all overtime hours worked at the overtime wage rate.

For more information, visit:

Prince Edward Island (PEI) - employees can request to accumulate or bank overtime

  • Employees can submit a written request for overtime hours to be banked.
  • If agreed to by the employer, the employee receives 1.5 hours of paid time off for each hour of overtime accrued.
  • It’s the employer’s responsibility to keep accurate and complete records of banked overtime.

For more information, visit:

Nova Scotia – fixed cycle averaging agreements for banking time

Overtime legislation for the Province of Nova Scotia does not specifically outline any parameters surrounding banking overtime. For more information, visit:

However, it’s possible for employees and employers to enter into a fixed cycle averaging agreement. This means that there is a pre-determined cycle of work that repeats over a specific period of time. For example, let’s say there’s an employee who works six days on and four days off. This employer and employee can calculate the average hours of work for this schedule and then schedule extra hours (beyond that average) in a day or days in a week in exchange for time off. The extended time off must exceed the norm. For more information on the fixed cycle averaging agreement, visit:

Yukon – employees can receive time off with pay

  • An employee and an employer can agree in writing for overtime to be compensated through time off with pay instead of overtime pay compensation.
  • Overtime wages must be specified under an averaging agreement or credited into a time bank.
  • Wages must be paid out at what was the regular rate at the time they were earned, and must be paid out within 12 months.
  • If the time bank agreement is to change or end, one month’s notice is required.

For more information, visit:

Northwest Territories – banking overtime is allowed

  • The employee and employer can agree in writing to time off with pay in lieu of overtime pay.
  • The employee is to receive 1.5 hours for every hour of overtime worked, and that banked overtime has to be taken within three months of it being earned.
  • If the employee asks to be paid out for the overtime worked, the employer has to comply.
  • If employment ends, the banked overtime is to be paid on the employee’s final pay.

For more information, visit:


Overtime legislation for Nunavut, outlined on page 11 of the Labour Standards Act, doesn’t specifically reference any parameters surrounding banking overtime. However, it does allow for averaging hours of work (page 3). The Act reads, “where the nature of the work in an industrial establishment necessitates irregular distribution of an employee’s hours of work, the Labour Standards Officer may, by permit in writing, authorize the standard and maximum hours of work in a day and in a week to be calculated as an average for a period of one or more weeks.”


You might’ve come to the conclusion that banking overtime can be a complicated process with many legislative factors to consider (or maybe you already know that first-hand from processing your own business’ payroll). Modern tech solutions can help create efficiencies in this process (and untangle those complicated legislative webs!). Cloud-based software like Payworks’ Time Management, Absence Management and Payroll solutions can help you create an accurate overtime bank and process requests for employees to be paid out wages or use their time in lieu. Want to see it in action? Seeing is believing… book a demo today:

Seeing is believing!

Curious what better Canadian workforce management looks like in action (and how much time you could reclaim in your day-to-day)? Book a pressure-free, get-to-know you demo today.