Ontario Vacation Pay Calculator

Ontario Vacation Pay Rules in Plain Language

Under Part XI (§§ 33–41.2) of the Ontario Employment Standards Act, 2000 (ESA), eligible employees earn statutory vacation pay as a percentage of gross wages earned during a 12-month vacation entitlement year or completed stub period.

Vacation Time vs. Vacation Pay

Vacation time and vacation pay are related but separate statutory entitlements under the ESA:

• Vacation Time: Time off work. Employees with less than 5 years of service earn 2 weeks of vacation time after each completed 12-month entitlement year. Employees with 5 or more years of service earn 3 weeks of vacation time.
• Vacation Pay: Pay earned on gross wages. Employees with less than 5 years of service receive at least 4% of gross wages. Employees with 5 or more years of service receive at least 6% of gross wages.

The 4% and 6% Minimum Rates

The general statutory minimum vacation pay rate is determined by the employee’s period of employment upon completion of the vacation entitlement year or stub period:

• Under 5 Years Service at Period End: Minimum 4% of gross wages earned in that period.
• 5 Years or More Service at Period End: Minimum 6% of gross wages earned in that period.

Reaching Five Years During the Period

If an employee reaches their 5-year employment anniversary at any point during the completed vacation entitlement year or stub period—even just one day prior to the period end date—the 6% rate applies to ALL gross wages earned during that entire completed period. The calculation is not split or prorated between 4% and 6%.

Wages Used for Calculation

Ontario vacation pay is calculated on gross wages earned during the period. Under ESA § 35.2, eligible wages include regular hourly wages, salaries, overtime pay, public holiday pay, commissions, and shift premiums, but exclude vacation pay itself.

Worked Examples

Example 1: Less Than Five Years Service

Example 2: Five Years or More Completed Before Period

Example 3: Five-Year Anniversary During the Period

Example 4: Completed Stub Period

Official Government Sources

Important Limitations

This calculator estimates the general ESA minimum and does not determine which payments legally count as wages, whether an exemption applies or whether a contract provides a greater entitlement. It does not calculate termination pay, severance pay, or construction-specific vacation arrangements.

Frequently Asked Questions

1. What is the minimum vacation-pay rate in Ontario?

Under the Ontario ESA, the minimum vacation-pay rate is 4% of gross wages for employees with less than 5 years of service, and 6% for employees with 5 or more years of service.

2. When does the vacation-pay rate increase from 4% to 6%?

The rate increases to 6% upon reaching 5 years of employment with the same employer.

3. What happens if I reach five years during the vacation year?

If you reach your 5-year anniversary on or before the end date of the completed vacation entitlement year or stub period, the 6% rate applies to all gross wages earned in that completed period.

4. Is the vacation-pay calculation split between 4% and 6%?

No. Under official Ministry guidelines, reaching the 5-year threshold during the period entitles the employee to 6% for the entire completed vacation entitlement year or stub period.

5. What wages should be included in the calculation?

Gross wages including regular pay, salaries, overtime pay, public holiday pay, commissions, and shift premiums earned during the period.

6. Should vacation pay itself be included in the wage amount?

No. Under Ontario ESA § 35.2, vacation pay is calculated on gross wages excluding vacation pay itself.

7. What is a vacation entitlement year?

A recurring 12-month period beginning on the employee’s date of hire (or an alternative 12-month period established by the employer).

8. What is a stub period?

A stub period is the period between the date of hire and the start of an employer’s alternative vacation entitlement year.

9. What is the difference between vacation time and vacation pay?

Vacation time is time off work (2 or 3 weeks), whereas vacation pay is money earned as a percentage (4% or 6%) of gross wages.

10. Can vacation pay be paid on every paycheque?

Yes, if the employee agrees in writing or if provided by an employment contract or collective agreement.

11. Does this calculator handle termination pay?

No. Vacation pay upon termination or resignation requires specific end-of-employment calculations outside version 1.

12. Are some jobs exempt from vacation-with-pay rules?

Yes. Certain licensed professionals and construction multi-employer plans have special statutory rules or exemptions.

13. Can a contract provide more vacation pay?

Yes. Employment contracts and collective agreements can provide greater vacation rights than the ESA minimums.

14. Does WageWise determine what my employer legally owes?

No. Results are pre-tax informational estimates only and do not constitute legal advice or binding debt determinations.

15. When was the rule last reviewed?

The Ontario vacation pay rule specifications were last reviewed against official Ministry sources on February 05, 2026.

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