How to calculate holiday pay in Ontario
The amount of holiday pay an employee is entitled to is calculated based on the regular wages they earned in the four weeks prior to the public holiday plus the vacation pay payable to the employee. To calculate the amount owed to the employee, add their regular wages during that four-week period plus any vacation pay payable to them and divide the total by 20.
Let's consider an employee, Emily, who works in a retail store in Ontario. Here's how her holiday pay would be calculated for an upcoming public holiday based on her previous pay periods:
- Week 1: Emily earned $400 in regular wages and $16 in vacation pay.
- Week 2: Emily was on unpaid leave.
- Week 3: Emily earned $450 in regular wages and $18 in vacation pay.
- Week 4: Emily earned $500 in regular wages and $20 in vacation pay.
To calculate Emily's holiday pay, add her regular wages and vacation pay:
- Week 1: $400 (regular wages) + $16 (vacation pay) = $416
- Week 2: $0 (as Emily was on unpaid leave)
- Week 3: $450 + $18 = $468
- Week 4: $500 + $20 = $520
Total for 4 weeks: $416 (Week 1) + $0 (Week 2) + $468 (Week 3) + $520 (Week 4) = $1,404
$1,404 (Total Regular Wages and Vacation Pay) ÷ 20 = $70.20
Therefore, Emily's holiday pay for the public holiday would be $70.20. This example demonstrates how the inclusion of vacation pay in the calculation can affect the final holiday pay amount, ensuring that employees receive fair compensation for their overall earnings, including their accrued vacation pay.
Visit the ESA website for more examples.