Vacation Pay Calculation Ontario 2019
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Reviewed by Calculator Editorial Team
In Ontario, vacation pay is a legal requirement for most employees. This guide explains how vacation pay is calculated for 2019, including the formula, examples, and key considerations.
How Vacation Pay Works in Ontario
Under the Ontario Employment Standards Act, most employees are entitled to vacation pay. The amount of vacation pay depends on the employee's length of service and the number of vacation days they are entitled to.
For 2019, the calculation of vacation pay is based on the following factors:
- Annual salary
- Number of vacation days
- Length of service (for employees with more than 5 years of service)
Note: The calculation method changed in 2019. Employees who started working in Ontario before 2019 may have different entitlements.
Calculation Method
The vacation pay calculation for 2019 follows this formula:
The vacation pay factor is determined by the employee's length of service:
| Length of Service | Vacation Pay Factor |
|---|---|
| Less than 5 years | 1.0 |
| 5-9 years | 1.25 |
| 10-14 years | 1.5 |
| 15-19 years | 1.75 |
| 20+ years | 2.0 |
For employees with more than 5 years of service, the vacation pay factor increases by 0.25 for each additional 5-year period, up to a maximum of 2.0.
Example Calculation
Let's calculate vacation pay for an employee with the following details:
- Annual salary: $50,000
- Number of vacation days: 10
- Length of service: 7 years
Using the calculation method:
This employee would be entitled to $2,403.88 in vacation pay for 2019.
Frequently Asked Questions
- Who is entitled to vacation pay in Ontario?
- Most employees covered by the Ontario Employment Standards Act are entitled to vacation pay, including full-time and part-time employees.
- How is vacation pay calculated for employees with less than 5 years of service?
- For employees with less than 5 years of service, the vacation pay factor is 1.0, and the calculation is simply (Annual Salary ÷ 260) × Number of Vacation Days.
- Can employers pay vacation pay in cash or in lieu of vacation time?
- Yes, employers can pay vacation pay in cash or provide paid vacation time. The choice depends on the employer's policy and the employee's preference.
- Is vacation pay taxable?
- Yes, vacation pay is generally considered taxable income by the Canada Revenue Agency. Employees should report vacation pay on their tax returns.
- What happens if an employer fails to pay vacation pay?
- Employees who are not paid their entitled vacation pay may be able to file a complaint with the Ontario Labour Relations Board or take legal action.