Holiday pay mistakes tend to show up at the worst possible time, usually right after payroll runs. And under Ontario holiday pay rules, even small calculation errors could create larger compliance issues later.

In Ontario, employers must recognize each statutory holiday and calculate pay based on a prescribed formula. On paper, that may look simple. In practice, it can mean double-checking earnings, reviewing eligibility, and hoping nothing slips through the cracks.

This guide walks through the Ontario holiday pay rules for 2026, including who qualifies, how to calculate public holiday pay, and what rules apply when employees work on a holiday in Ontario. Along the way, you’ll see where payroll solutions like QuickBooks can support your payroll compliance workflow.

Table of contents:

• Understanding Ontario's holiday pay regulations
• Who is eligible for holiday pay in Ontario?
• Ontario's public holidays
• How to calculate holiday pay in Ontario
• How to calculate statutory pay
• Public holiday pay vs. vacation pay
• How payroll software can simplify Ontario holiday pay calculations
• Stay compliant with Ontario holiday pay rules
• Frequently asked questions

Understanding Ontario's holiday pay regulations

Under Ontario’s Employment Standards Act (ESA), certain public holidays must be treated as paid days off. If your business operates in Ontario, you’re required to follow the province’s statutory holiday pay rules, unless a specific exemption applies.

There are 9 public holidays recognized by Ontario. These paid holidays in Ontario entitle eligible employees to a day off with public holiday pay.

There is no minimum period of employment required for an employee to be eligible for holiday pay. A newly hired employee can qualify if they meet the eligibility criteria. Ontario holiday pay rules apply broadly to full-time, part-time, permanent, and temporary staff.

Who is eligible for holiday pay in Ontario?

Most employees qualify for public holiday pay, regardless of employment status. The key test is the “last and first” rule.

To qualify, an employee must:

• Work their last regularly scheduled shift before the holiday
• Work their first regularly scheduled shift after the holiday
• Have reasonable cause if they miss either shift

If an employee has reasonable cause for missing a scheduled shift before or after the holiday, they may still qualify for public holiday pay under the ESA.

“Last and first” rule in practice

Under the “last and first” rule, eligibility can depend on whether an employee works their scheduled shifts before and after the holiday.

Here are a few examples showing how Ontario holiday pay rules may apply in different employee situations:

Ontario's public holidays

Ontario recognizes 9 statutory holidays in 2026. Even if your business closes, eligible employees must receive public holiday pay.

Holidays outside Ontario statutory requirements

The days below are not statutory holidays under Ontario holiday pay rules, although some employers choose to observe them:

• Civic Holiday
• Remembrance Day
• Easter Monday
• Christmas Eve

If you treat them as paid days off, the terms are set by your company policy, not by the ESA.

How to calculate holiday pay in Ontario

The amount of public holiday pay eligible employees can receive is based on the regular wages they earn in the 4 work weeks before the holiday, plus any vacation pay payable during the same period.

The public holiday pay formula:

Public holiday pay = (Total regular wages in prior 4 weeks + Vacation pay payable) ÷ 20

Step 1: Collect four weeks of wages

First, review the employee’s regular wages from the four work weeks before the holiday week. This period is used to calculate public holiday pay under Ontario holiday pay rules.

If the employee had any unpaid time during those weeks, that period is still included in the calculation. The formula uses the actual wages earned during the four weeks, even if one or more weeks show zero earnings.

Step 2: Confirm what counts as regular wages

Next, determine which types of pay should be included in the calculation. The ESA defines regular wages as the earnings an employee normally receives for work performed.

Include the following:

• ✓ Hourly or salary pay: Regular wages earned for scheduled work.
• ✓ Regular commissions: Commission income tied to normal duties.

Do not include:

• ✗ Overtime pay: Overtime is calculated separately.
• ✗ Public holiday pay: Holiday pay itself cannot be included in the formula.
• ✗ Premium pay: Extra pay for working holidays or overtime hours.
• ✗ Termination or severance pay: Payments related to employment ending.

Carefully separating these categories can help avoid calculation errors.

Step 3: Add vacation pay for the same period

Once regular wages are confirmed, add any vacation pay payable during those same four weeks. In many Ontario workplaces, vacation pay is calculated at 4% of wages for employees with under five years of service.

For example, consider Lucas, a logistics coordinator in Ontario, preparing for an upcoming statutory holiday:

• Week 1: Lucas earned $600 in regular wages and $24 in vacation pay
• Week 2: Lucas earned $650 in regular wages and $26 in vacation pay
• Week 3: Lucas was on unpaid leave
• Week 4: Lucas earned $700 in regular wages and $28 in vacation pay

Step 4: Calculate the public holiday pay

Next, add Lucas’s total earnings and vacation pay for the four weeks, then divide the result by 20, as required by Ontario holiday pay rules.

• Week 1: $600 + $24 = $624
• Week 2: $650 + $26 = $676
• Week 3: $0
• Week 4: $700 + $28 = $728

Total for four weeks:
$624 + $676 + $0 + $728 = $2,028

Public holiday pay calculation:
$2,028 ÷ 20 = $101.40

Lucas would receive $101.40 in public holiday pay for the statutory holiday.

This calculation shows why reviewing recent wages and vacation pay carefully matters. Even small differences in earnings—or input errors—can change the final public holiday pay amount.

For more examples, refer to the Ontario government’s public holiday guide.

How to calculate statutory pay

When an employee in Ontario works on a statutory holiday, also known as a stat holiday, specific rules under the Employment Standards Act apply to their compensation and time off.

If an employee works on a statutory holiday, stat holiday pay rules in Ontario set out 2 options for employers:

• Public holiday pay plus premium: The employee receives public holiday pay and 1.5× their regular rate for each hour worked.
• Substitute day off: The employee receives regular wages for hours worked and is given a substitute paid day off.

In most cases, employers choose which option to use. Keep in mind that employee eligibility and entitlements can vary, depending on the nature of the work and what’s outlined in the employment agreement. If you schedule a substitute day off, it must be confirmed in writing.

Whatever option you apply, be sure to meet the ESA requirements and provide the correct pay or time off. Getting everything right helps you stay compliant with payroll requirements and recognize your team’s time and effort, even on statutory holidays.

Public holiday pay vs. vacation pay

Public holiday pay and vacation pay are separate entitlements under the ESA. They’re calculated differently and serve different purposes, so it’s important not to mix them up.

• Public holiday pay: Applies to specific paid holidays in Ontario and uses the 4-week average formula. It’s based on an employee’s recent earnings and is payable whether or not they work on the holiday itself, depending on eligibility.
• Vacation pay: Accrues over time and is typically calculated at 4% of gross wages for employees with fewer than 5 years of service, and 6% afterward. It builds over a 12-month vacation entitlement year or stub period and is paid when vacation is taken or in other situations outlined in the ESA.

Each entitlement must be calculated independently. Public holiday pay is tied to specific statutory holidays, while vacation pay builds gradually and follows its own rules. Keeping that distinction clear helps you follow Ontario holiday pay rules and avoid payroll errors that can add up over time.

How payroll software can simplify Ontario holiday pay calculations

Accurate record-keeping is part of managing Ontario holiday pay rules. The ESA requires employers to maintain detailed payroll records, including hours worked, wages paid, and any public holiday pay provided.

Clear documentation does more than meet legal requirements. It can help you protect your business during an audit or dispute.

How payroll software can make this process more consistent:

• Applying the 4-week formula automatically: Reducing manual calculation errors.
• Calculating premium pay: Ensuring 1.5× rates are applied correctly when employees work on a holiday.
• Tracking substitute days: Recording when a paid day off is scheduled instead of premium pay.
• Maintaining compliant records: Storing wage and holiday pay data in one place.

Software like QuickBooks Payroll integrates these calculations directly into payroll workflows, centralizing reporting and strengthening compliance oversight.

Stay compliant with Ontario holiday pay rules

Ontario holiday pay rules seem simple, but eligibility timing, substitute days, and wage inputs can quickly affect payroll accuracy.

Staying compliant with Ontario holiday pay rules helps protect both your employees and your business. A clear understanding of Ontario statutory holiday pay rules makes it easier to apply the right calculations and document decisions with confidence.

A structured payroll review process can help you keep your calculations and records accurate, organized, and audit-ready. The right payroll system can automatically do it all for you, and QuickBooks is built to handle Ontario holiday pay rules within your existing workflow.

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