Vacation Pay Calculator Ontario 2018

Calculate your vacation pay entitlement in Ontario for the 2018 tax year using our free online calculator. Understand how vacation pay is calculated under Ontario law and what factors affect your entitlement.

How to Calculate Vacation Pay in Ontario 2018

In Ontario, vacation pay is calculated based on an employee's regular wages and the number of vacation days they are entitled to. The calculation follows specific formulas established by the Ontario government.

Key Factors in Vacation Pay Calculation

The main factors that determine vacation pay in Ontario include:

Regular wages (hourly or annual salary)
Number of vacation days entitled
Whether the employee is paid hourly or salaried
Any applicable overtime rates

Calculation Methods

There are two primary methods for calculating vacation pay in Ontario:

For hourly employees: Vacation pay is calculated based on the employee's regular hourly rate multiplied by the number of vacation days.
For salaried employees: Vacation pay is calculated based on the employee's annual salary divided by the number of pay periods in the year, then multiplied by the number of vacation days.

Note: The exact calculation may vary slightly depending on the employee's specific employment contract and any collective agreements that apply.

Vacation Pay Formula

The general formula for calculating vacation pay in Ontario is:

For hourly employees:
Vacation Pay = (Regular Hourly Rate × Number of Vacation Days) × 1.5

For salaried employees:
Vacation Pay = (Annual Salary ÷ Number of Pay Periods) × Number of Vacation Days

Where:

Regular Hourly Rate = Employee's normal hourly wage
Number of Vacation Days = Number of days the employee is entitled to as vacation
Annual Salary = Employee's total annual salary
Number of Pay Periods = Number of pay periods in a year (typically 26 for bi-weekly pay)

The 1.5 multiplier for hourly employees accounts for the additional time required to prepare for and take the vacation.

Worked Example

Let's calculate vacation pay for an hourly employee with the following details:

Regular Hourly Rate	$20.00
Number of Vacation Days	10

Using the formula for hourly employees:

Vacation Pay = ($20.00 × 10) × 1.5
Vacation Pay = $200.00 × 1.5
Vacation Pay = $300.00

Therefore, this employee would be entitled to $300.00 in vacation pay.

Salaried Employee Example

For a salaried employee with the following details:

Annual Salary	$50,000
Number of Pay Periods	26
Number of Vacation Days	10

Using the formula for salaried employees:

Vacation Pay = ($50,000 ÷ 26) × 10
Vacation Pay = $1,923.08 × 10
Vacation Pay = $19,230.80

This salaried employee would be entitled to $19,230.80 in vacation pay.

Frequently Asked Questions

How is vacation pay calculated in Ontario?: Vacation pay is calculated based on an employee's regular wages and the number of vacation days they are entitled to. The exact method depends on whether the employee is paid hourly or salaried.
Do I have to pay vacation pay to all employees?: Yes, under Ontario law, employers must pay vacation pay to all eligible employees who have completed at least one year of continuous service.
What happens if an employee doesn't take all their vacation days?: In Ontario, vacation pay is typically calculated based on the number of days the employee is entitled to, regardless of whether they actually take all those days. The pay is usually issued at the end of the year.
Are there any exemptions to vacation pay requirements?: Some employees may be exempt from vacation pay requirements if they are covered by a collective agreement that provides for different vacation pay arrangements.
Can vacation pay be deducted from an employee's wages?: No, vacation pay must be paid in addition to an employee's regular wages. It cannot be deducted or offset against any other amounts owed to the employee.