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The Difference Between Vacation Time and Vacation Pay in Ontario


Vacation time and pay are provided to employees in Ontario to ensure that they receive enough rest and personal time off during the year. These two entitlements address different aspects of employee vacation and both must be provided by employers according to provincial legislation. In Ontario, the Employment Standards Act (ESA) sets the minimum employment standards for employee vacations. Here’s what employers should know about their employee’s vacation rights, their eligibility and how much time off and pay they are due.

What is the difference?

Vacation time is the length of time off an employee receives annually for vacation. Vacation pay refers to the amount of pay employees must receive to compensate them for the vacation time they take off work. While employees may forfeit their vacation time if they wish, with the approval of their employer and the Director and Employment Standards, employers must provide them vacation pay regardless.

Vacation Time

Employees earn their vacation time over the course of the year. This means that employees are eligible for vacation time after one year of employment. Employees who have been with the same employer over a year, but less than five, are eligible for 2 weeks of vacation time per completed employment year, and those who have been employed for more than five years, are eligible for 3 weeks of vacation time.

Vacation Pay

The amount an employee is paid for vacation depends on their length of employment with the same employer. If they have been employed less than five years, they must be paid 4% of their gross wages earned in the 12-month vacation entitlement year. If they have been employed longer than 5 years, they are entitled to 6% of their wages.

Need help calculating vacation pay?

We can answer your questions on vacation time, vacation pay and other employee absences. Speak with our HR experts to get advice on how to stay compliant with ESA and pay employees correctly. Contact us today: 1 (833) 247-3652.

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