Vacation Pay Ontario: Know Your Rights

In Ontario, most employees are legally entitled to vacation pay. Whether you’re full-time, part-time, temporary, or on a short-term contract, your employer must pay you vacation pay in addition to your regular wages.

This guide breaks down how vacation pay works in Ontario, how much you’re entitled to, when it must be paid, and what to do if your employer doesn’t comply with the law.

What is Vacation Pay in Ontario?

Vacation pay is money your employer must pay you for time off work. It’s a legal requirement under Ontario’s Employment Standards Act (ESA).

If you work in Ontario and fall under ESA rules (which most non-unionized employees do), you’re entitled to vacation pay even if you don’t take vacation time.

How Much Vacation Pay Are You Entitled to in Ontario?

In most cases, the minimum vacation pay you are owed is:

• 4% of your gross wages if you have less than 5 years of employment
• 6% of your gross wages if you have 5 or more years with the same employer

You may receive more than this if your employment contract or company policy provides a greater benefit.

How is Vacation Pay Calculated in Ontario?

Vacation pay is calculated based on your gross earnings, which includes:

• Regular wages
• Commissions
• Bonuses (if non-discretionary)
• Overtime pay
• Public holiday pay
• Paid sick days

It does not include:

• Expense reimbursements
• Discretionary bonuses
• Tips and gratuities

When Must Vacation Pay Be Paid in Ontario?

Your employer can pay vacation pay in two ways:

1. With each paycheque (e.g., 4% added on top of your regular pay)
2. As a lump sum before you take vacation time

Vacation pay must be paid no later than the day before your vacation starts, or on your regular payday, depending on the arrangement.

Are You Entitled to Vacation Time and Vacation Pay?

Yes. In Ontario, you’re entitled to both vacation time and vacation pay:

• 2 weeks off per year after 12 months of employment (3 weeks after 5 years)
• And the corresponding vacation pay (4% or 6%)

If you leave your job before taking your vacation, your employer must pay you the vacation pay owed.

What Happens If Your Employer Doesn’t Pay Vacation Pay?

Failing to pay vacation pay is a violation of the ESA. If your employer withholds it, you can:

• Speak to your employer (it could be a mistake)
• File a complaint with the Ministry of Labour
• Speak to an employment lawyer to explore severance or other legal remedies

In some cases, unpaid vacation pay may be part of a larger termination package (up to 24 months of severance pay) or wrongful dismissal claim.

Exceptions: Who Doesn’t Qualify For Vacation Pay in Ontario?

Most workers are covered, but a few exceptions include:

• Independent contractors (note: some are misclassified employees)
• Certain professionals (e.g., lawyers, architects)
• Workers under federal jurisdiction (e.g., airline staff)

If you’re not sure whether you’re entitled, get legal advice. Many contractors are actually owed vacation pay due to misclassification.

Can Your Employer Include Vacation Pay in Your Salary?

Yes, but only if they do it transparently. Your employer must:

• Clearly outline the vacation pay amount on your pay stub (e.g., 4% or 6%)
• Show that vacation pay is being paid in addition to your regular wages

Otherwise, they could be in breach of the ESA.

Can Your Employer Force You to Take Vacation at a Certain Time?

Yes. Employers can decide when employees take vacation as long as:

• You receive your full vacation time and pay
• You are given proper notice (usually at least 2 weeks)

This is common in seasonal industries or workplace shutdowns (e.g., construction or manufacturing).

Key Takeaways

• Vacation pay is mandatory in Ontario
• You must receive 4% or 6% of your gross earnings
• Employers must pay it either with each paycheque or before vacation
• You have rights if your employer withholds vacation pay
• Get legal advice if you’re unsure about your entitlements

Need Help With Vacation Pay Issues?

If your employer isn’t paying what you’re owed, we can help. Samfiru Tumarkin LLP is Canada’s leading employment law firm for non-unionized workers.

We’ve helped over 50,000 clients secure the compensation, including severance pay, they deserve.

📞 Call 1-855-821-5900 or use our consultation form today.