Vacation Pay Calculator (Canada)
Updated November 2026 · Free · No sign-up
Calculate vacation pay in Canada — the 4% / 6% (and Saskatchewan's 3/52) percentage system by province, tenure thresholds, and what's owed on termination.
Quick answer: Vacation pay = 4% of gross wages (2 weeks) rising to 6% (3 weeks) at the tenure threshold — 5 years in Ontario, 5 in BC... varies by province; Saskatchewan starts at 3/52 (~5.77%). Earned $52,000 in Ontario under 5 years = $2,080 of vacation pay.
How Canadian Vacation Pay Works
Canada runs a percentage-of-wages system: vacation TIME (2-3 weeks) and vacation PAY (4-6% of gross) are separate entitlements that normally match. The percentage applies to almost all earnings — regular pay, overtime, stat holiday pay, commissions, and bonuses tied to work (discretionary gifts excluded in most provinces).
Rates by Province
| Province | Start | Step up |
|---|---|---|
| Ontario, BC, Alberta, Manitoba | 4% (2 wks) | 6% (3 wks) after 5 years |
| Saskatchewan | 3/52 ≈ 5.77% (3 wks) — Canada's most generous floor | 4/52 ≈ 7.69% (4 wks) after 10 years |
| Quebec | 4% | 6% after just 3 years |
| Federal workplaces | 4% | 6% at 5 yrs, 8% (4 wks) at 10 yrs |
Worked Examples
Example 1 — Ontario, year 3. $52,000 gross: 4% = $2,080 funding 2 weeks off.
Example 2 — the anniversary bump. Same worker completes year 5: 6% = $3,120 — +$1,040/year permanently. The bump applies to the entitlement year AFTER the anniversary; payroll missing the switch is a frequent (recoverable) error.
Example 3 — termination payout. Quitting with $14,000 earned since the last vacation year closed, plus 6 unused days from the prior year: the final pay must include 4-6% on the $14,000 AND the unused accrued pay — vacation pay is never forfeited in Canada, unlike US use-it-or-lose-it states.
Rules That Protect You
- No forfeiture: accrued vacation pay is earned wages — payable on termination always (contrast the US rollover mess).
- Vacation pay on vacation pay? No — but OT and stat pay in the base, yes: check your employer's "vacationable earnings" definition against your province.
- "Vacation included in wage" arrangements must be itemized and agreed — a flat "it's in your rate" without numbers fails in most provinces.
- Timing: employers can schedule when you take time, but pay is due before the vacation (or per agreed payroll practice).
Employer Accrual Math
Book 4-6% of gross as a liability every payroll — including on bonuses and OT — and reconcile at anniversaries for the step-up. The classic audit findings: percentage applied to base salary only (missing OT/commissions), missed 5-year bumps, and unpaid balances at termination; each is straightforward back pay with 2-year Employment Standards lookbacks (longer in court).
Vacation Time vs Pay (The Decoupling)
Percentage PAY accrues on all earnings even when TIME is capped — a heavy-overtime year means your 2 weeks of vacation pay out at more than 2 weeks of base salary. Hourly workers paid out each cheque (common in construction: vacation pay added to every pay) get the money but must self-fund the actual time off — budget accordingly.
Frequently Asked Questions
How is vacation pay calculated in Canada?
4% of gross wages for 2-week entitlement, 6% for 3 weeks — thresholds at 5 years in most provinces (3 in Quebec); Saskatchewan starts at 5.77%.
What earnings does vacation pay apply to?
Nearly all work earnings: regular wages, overtime, stat holiday pay, commissions, and work-tied bonuses — not discretionary gifts or expense reimbursements.
When does vacation pay increase to 6%?
After 5 completed years in Ontario/BC/Alberta/Manitoba, 3 years in Quebec, 10 years for Saskatchewan's step to 7.69% — applied to the following entitlement year.
Is unused vacation paid out when I leave a job in Canada?
Always — accrued vacation pay is earned wages payable with the final pay in every province; forfeiture policies are unenforceable.
Can vacation pay be included in my hourly rate?
Only with explicit agreement and itemization on pay statements — a vague "included" fails employment standards in most provinces.
Does overtime earn vacation pay?
Yes — the percentage applies to overtime earnings too; base-salary-only accrual is a common, recoverable payroll error.
✓ Formula verified • Last updated: November 3, 2026