Under Ontario's Employment Standards Act, most employees earn vacation pay of at least 4% of the wages they earn, rising to 6% once they've been with the employer for five years. They're also entitled to vacation time: two weeks a year, or three weeks after five years.
The rules at a glance
| Length of employment | Vacation time | Vacation pay |
|---|---|---|
| Less than 5 years | 2 weeks per year | 4% of wages |
| 5 years or more | 3 weeks per year | 6% of wages |
What counts as wages
Vacation pay is calculated on wages earned in the vacation entitlement year, including overtime, public holiday pay, commissions and termination pay. It doesn't include vacation pay itself, tips and gratuities, or discretionary bonuses unrelated to hours, production or efficiency.
Example
An employee with three years of service earns $52,000 in a year. Their minimum vacation pay is 4% × $52,000 = $2,080, and they're entitled to two weeks off.
When you leave a job
Any vacation pay you've earned but not received must be paid out when your employment ends, whether you quit, are laid off or are dismissed. If you receive termination pay, you also earn vacation pay on it. Our calculator includes that automatically.
Paid on each cheque? Some employers pay the 4% or 6% with every paycheque instead of when you take time off. That's allowed if you agree in writing and it shows separately on your pay stub.
Frequently asked questions
Is vacation pay 4% or 6% in Ontario?
4% if you've been employed less than five years, and 6% once you reach five years with the same employer.
Do part-time employees get vacation pay?
Yes. All employees covered by the ESA earn vacation pay on their wages, regardless of hours.
Can my employer refuse to pay out vacation pay when I quit?
No. Earned vacation pay must be paid when employment ends.
Sources
- Government of Ontario, Your guide to the ESA: Vacation