Ontario Statutory Holiday Pay Calculation Formula

Ontario Statutory Holiday Pay is a mandatory payment that employers must provide to eligible employees on designated holidays. This guide explains how to calculate it, including the formula, assumptions, and practical examples.

What is Statutory Holiday Pay?

Statutory Holiday Pay in Ontario is a legal requirement for employers to pay eligible employees on certain holidays. These holidays include:

New Year's Day
Family Day
Victoria Day
Canada Day
Labour Day
Thanksgiving Day
Remembrance Day
Christmas Day
Boxing Day

Employees must have worked at least 20 hours in the 60 days before the holiday to be eligible for the pay.

How to Calculate Ontario Statutory Holiday Pay

Calculating Statutory Holiday Pay involves determining the employee's regular pay rate and applying it to the holiday pay formula. Here's a step-by-step guide:

Determine the employee's regular hourly or daily pay rate
Calculate the total hours worked in the 60 days before the holiday
Verify the employee worked at least 20 hours in that period
Apply the Statutory Holiday Pay formula
Round the result to the nearest cent

The calculation must be done separately for each eligible employee and each holiday they qualify for.

The Formula

The Ontario Statutory Holiday Pay is calculated using the following formula:

Statutory Holiday Pay Formula

Statutory Holiday Pay = (Regular Pay Rate × Average Daily Hours) × Holiday Pay Factor

Where:

Regular Pay Rate - The employee's regular hourly or daily pay rate
Average Daily Hours - The average number of hours worked per day in the 60 days before the holiday
Holiday Pay Factor - A factor that determines the amount of pay (typically 1.5 for a full day)

The Ontario Labour Relations Act specifies that the holiday pay must be at least 1.5 times the employee's regular pay for the hours worked on the holiday.

Examples

Let's look at two examples to illustrate how the calculation works.

Example 1: Hourly Employee

John works 40 hours per week at $20/hour. In the 60 days before Christmas Day, he worked an average of 7.5 hours per day.

Calculation:

Regular Pay Rate = $20/hour
Average Daily Hours = 7.5 hours
Holiday Pay Factor = 1.5
Statutory Holiday Pay = ($20 × 7.5) × 1.5 = $225

John would receive $225 in Statutory Holiday Pay for Christmas Day.

Example 2: Salaried Employee

Sarah earns $2,500 per month. In the 60 days before Victoria Day, she worked an average of 8 hours per day.

Calculation:

Regular Pay Rate = $2,500/month
Average Daily Hours = 8 hours
Holiday Pay Factor = 1.5
First, calculate daily rate: $2,500 ÷ 20 workdays ≈ $125/day
Statutory Holiday Pay = ($125 × 8) × 1.5 = $1,500

Sarah would receive $1,500 in Statutory Holiday Pay for Victoria Day.

Important Notes

1. The calculation must be done separately for each holiday the employee qualifies for.

2. Employees must have worked at least 20 hours in the 60 days before the holiday to be eligible.

3. The holiday pay must be at least 1.5 times the employee's regular pay for the hours worked on the holiday.

FAQ

What holidays qualify for Statutory Holiday Pay in Ontario?

The following holidays qualify: New Year's Day, Family Day, Victoria Day, Canada Day, Labour Day, Thanksgiving Day, Remembrance Day, Christmas Day, and Boxing Day.

How do I calculate the average daily hours for the 60-day period?

Sum all hours worked in the 60 days before the holiday and divide by the number of days in that period. For example, if you worked 300 hours in 60 days, your average is 5 hours per day.

What if an employee doesn't work a full day on the holiday?

The holiday pay must be calculated based on the actual hours worked on the holiday, but it must be at least 1.5 times the employee's regular pay for those hours.

Is Statutory Holiday Pay taxable?

Yes, Statutory Holiday Pay is considered wages and is subject to income tax, CPP, and EI deductions.