Vacation Pay in Canada: How 4% (or 6%) of Your Paycheque Actually Works
By Jordan Ellis · Published · Reviewed
Quick Answer
Vacation pay in Canada is generally at least 4% of gross wages, the cash equivalent of 2 weeks off. It rises to 6% (3 weeks) after 5 years in Ontario, BC, Alberta, Manitoba, PEI and federally regulated workplaces, after 3 years in Quebec, after 8 years in New Brunswick and Nova Scotia, and after 15 years in Newfoundland and Labrador. Saskatchewan gives 3 weeks after the first year. Vacation pay is taxable, and accrued vacation pay is owed on your final pay when you leave. On a $60,000 salary, 4% is $2,400 a year and 6% is $3,600.
Vacation pay is one of the most misunderstood lines on a Canadian paycheque. It isn’t a bonus. It’s deferred wages, usually at least 4% of what you earn, and the rules around it are stricter than many people assume.
The minimums, by jurisdiction
| Jurisdiction | 2 weeks (4%) | 3 weeks (6%) | 4 weeks (8%) |
|---|---|---|---|
| Ontario, BC, Alberta, Manitoba | After 1 year | After 5 years | Contract only |
| Prince Edward Island | After 1 year | After 5 years (since June 30, 2026) | Contract only |
| Federal (banks, telecom, airlines, etc.) | After 1 year | After 5 years | After 10 years |
| Quebec | After 1 year | After 3 years | Contract only |
| New Brunswick, Nova Scotia | After 1 year | After 8 years | Contract only |
| Newfoundland and Labrador | After 1 year | After 15 years | Contract only |
| Saskatchewan | — | After 1 year (3/52 of wages) | After 10 years (4/52 of wages) |
The territories have their own rules, and every jurisdiction has details (such as how partial years and wages are counted) that this table can’t capture. Check your provincial or federal employment standards office for your situation.
On a $60,000 salary, 4% is $2,400 a year and 6% is $3,600. That money is either built into your salary as paid time off or added on top, depending on how your pay is set up. See how it nets out after tax with the salary calculator.
The two ways it’s paid
Accrued and paid when you take vacation: the usual setup for full-time salaried staff. When you take two weeks off, your pay simply continues. Your paycheque doesn’t change; the accounting happens behind it.
Paid on every cheque: common for part-time, casual and seasonal workers, where the law and the employee agree to it. You’ll see a “vacation pay 4%” line on each pay stub. It can feel like a bonus, but it means your time off later is unpaid. If this is you, move that 4% into a separate account so your vacation is actually funded.
The gotchas worth knowing
- It usually accrues on more than base salary. Overtime, commissions and non-discretionary bonuses often count as wages for vacation pay. If you earn a lot of commission, check that your 4% is calculated on your real gross.
- Leaving doesn’t forfeit it. Accrued vacation pay generally has to be paid out when you quit or are let go.
- Use-it-or-lose-it rarely applies to the legal minimum. Employers can usually decide when you take vacation, but they generally can’t make you lose the minimum.
- Contractors get none. If you’re comparing contract work with a salaried job, the contract rate needs to cover vacation, benefits and the employer share of CPP and EI to break even. Our hourly to salary after tax guide runs that comparison, and take-home pay by province shows the net picture across Canada.
Know your minimum, check the vacation line on your pay stub once a year, and make sure any unpaid vacation pay shows up on your final cheque when you leave a job.
Official sources
Rules and dollar limits change. Confirm current amounts with the official pages below before you act · Last reviewed .
- Vacation (Employment Standards Act guide) (Government of Ontario)