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Ontario runs vacation on a percentage, not on an average. Four per cent of what you earned in the entitlement year until you reach five years with the employer, six per cent from there on. The percentage is the easy half — the half people get wrong is which earnings it applies to.
Last reviewed · maintained by Ihor Bezrukavnyk · how we calculate
Enter what you earned across the vacation entitlement year, then pick your side of the five-year line.
Gross, before deductions. Include overtime and public holiday pay; leave last year's vacation pay out.
time with this employer
rate 4% · 2 weeks of vacation time
The five-year step is a cliff, not a slope: you are on 4% right up to the day the period of employment reaches five years, and on 6% from then on. There is no tier in between.
The Act applies the percentage to “the wages, excluding vacation pay, that the employee earned during the period for which the vacation is given”, and defines wages broadly. Here is what that works out to:
In the base
Out of the base
Here is the trap worth knowing. Overtime pay is inside the vacation base — but it is expressly outside the base for public holiday pay, which averages your wages with overtime stripped out. Same province, same paycheque, opposite treatment. A calculator that uses one rule for both gets one of them wrong every time.
On severance pay, be careful with anyone who states it flatly. Severance is a payment required under the Act, which on the plain words of the definition makes it wages. The Ministry's guidance nonetheless lists it as excluded while listing termination pay as included. We follow the Ministry, because that is what an inspector will apply — but it is an interpretation, not a line you will find in the statute.
Two weeks of vacation time for a period of employment under five years, three weeks at five years or more. The time and the pay step up together, but they are separate obligations — an employer owes you both, and paying the percentage does not discharge the duty to give you the time off.
The entitlement year is normally the twelve months running from your first day. An employer may instead set an alternative year starting on a date of its choosing, which leaves a short “stub period” in between; vacation time for a stub period is prorated, while vacation pay stays at the flat percentage of whatever you actually earned in it.
The default is a lump sum, before the vacation starts. Two practical exceptions follow: where you are paid by direct deposit, or you are not taking vacation in whole weeks, it can come on the pay day for the period the vacation falls in.
Vacation pay on every cheque is allowed, but only on two conditions: you agreed to it in writing, and the vacation pay is shown separately on the wage statement or on a statement of its own. Without both, the arrangement does not meet the Act — and an employer that pays it out this way still owes you the vacation time.
When employment ends, accrued vacation pay is owed and payable on the later of seven days after the end and what would have been the next pay day.
The vacation provisions do not reach everyone. Listed professionals and their students — architecture, law, professional engineering, public accounting, surveying, veterinary science, and the health professions — are outside Part XI altogether, as are commercial fishers, real estate salespeople, and commission salespeople who normally sell away from the employer's premises. Farm employees in listed primary production are also outside it, and fruit, vegetable and tobacco harvesters come inside only after thirteen weeks with the employer.
Vacation is one of four Ontario numbers worth keeping straight, and they use different wage bases:
Add up the gross wages you earned during the vacation entitlement year — regular pay, overtime pay, public holiday pay, commissions and non-discretionary bonuses — leave out last year's vacation pay, and take four per cent of the total. On $52,000 of earnings that is $2,080. From five years of service the rate becomes six per cent, which on the same earnings is $3,120.
Yes. Overtime pay is wages under the Act, and nothing in the vacation provisions takes it out of the base, so the percentage applies to it in full. Note that public holiday pay works the opposite way — that formula expressly strips overtime out before averaging. The two rules genuinely differ, and mixing them up is the most common mistake on an Ontario stub.
When your period of employment with that employer reaches five years. It is a step, not a gradual accrual — four per cent applies right up to the five-year mark and six per cent from then on, with nothing in between. Both active and inactive employment count toward the five years.
Only if you agreed to it in writing and the vacation pay appears separately from your other wages, either on the wage statement itself or on a separate statement given at the same time. If either condition is missing, the arrangement does not satisfy the Act. And however it is paid, you are still entitled to the vacation time.
Yes. Accrued vacation pay is owed when employment ends, whoever ended it. It has to be paid on the later of seven days after the employment ends and the day that would have been your next pay day.
No. Tips and other gratuities sit outside the definition of wages in the Act, so the percentage does not apply to them. The same is true of expense reimbursements and travel allowances, and of bonuses that are both purely discretionary and unrelated to hours, production or efficiency — a bonus tied to any of those three stays in the base.
Every figure on this page traces to the statute or agency page above. If one is out of date, tell us — corrections ship the same week.
Overtally computes what you should be paid before taxes. It does not calculate take-home pay, withholding or deductions, and it is not legal advice — it is your own record and your own estimate.