Vacation Time and Vacation Pay in Ontario
The Employment Standards Act (ESA) sets a floor for vacation time and vacation pay. Contracts and policies can give more, but not less. Mistakes about vacation pay are among the most common reasons for ESA claims.
- Most employees are entitled to at least two weeks of vacation after each 12-month vacation entitlement year, and three weeks after five years.
- Vacation pay is at least 4% of gross wages, rising to 6% once you have worked for the employer for five years.
- Vacation time generally must be taken within 10 months after the entitlement year ends.
- On termination, the employer must pay out all vacation pay earned and not yet paid.
How much time
- Two weeks of vacation for each vacation entitlement year when you have been employed for less than five years.
- Three weeks once you have completed five years with the employer.
- A vacation entitlement year is a 12-month period set by the employer, which may be the anniversary of your start or a fixed date such as the calendar year.
How much pay
Vacation pay is calculated on gross wages, not including vacation pay itself: at least 4% for service under five years, and at least 6% after five years. The pay is generally due before the vacation starts, or on regular paydays if you agree in writing. Employers must show vacation pay clearly on your pay statements.
Taking the time
- The employer picks the time, but must allow you to take it within 10 months after the entitlement year ends.
- Vacation must be given in blocks of one or two weeks, unless you request a different arrangement in writing.
- Unused time does not simply disappear without an agreement, and cash in lieu is generally not allowed while you are still employed, unless the rules say so.
On termination or resignation
When employment ends, the employer must pay all outstanding vacation pay, including pay for the current year, by the later of the date wages are due or within seven days after the employment ends in a termination. If a termination is with notice, vacation continues to build during the notice period.
If you think you are owed vacation pay
- Check your pay statements and offer letter for how vacation pay was shown and paid.
- Add up your gross wages for the periods in question and apply the right percentage.
- Ask your employer in writing, with your calculation.
- If it is not resolved, you can file an ESA claim with the Ministry of Labour, generally within two years, or include the amount in a wrongful dismissal claim.
Common questions
Is vacation pay included in my hourly wage?
An employer may not just fold it into your wage without making it clear. If vacation pay is included in your regular pay, it should be stated in your contract and shown separately on your pay statements.
Can I cash out my vacation?
Generally not while you are employed. You are entitled to the time off, with pay.
This guide is general information for people in Ontario, not legal advice. Rules, forms and deadlines change, and every situation is different. Check the current rule or speak to a licensed legal professional before you act.
Not sure where you stand? A licensed paralegal can look at your documents and tell you your options.
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