HR glossary · Pay and payroll

Vacation pay

Vacation pay is the money owed for vacation, usually 4% or 6% of wages in Canada. The percentage and when it rises depend on your province.

Also called: holiday pay, 4% vacation pay, vacation percentage

What vacation pay means

Vacation pay is the money an employee earns for vacation time. In Canada it is set as a percentage of the employee's wages, most often 4% for the first years of service and 6% once they have worked long enough to get 3 weeks of vacation.

It is separate from vacation time (the weeks off). You either pay it when the employee takes their vacation, or, where your province allows it, add it to each pay cheque. Check your province's rule before choosing the second option.

Unpaid vacation pay is one of the most common amounts owed when someone leaves. Whatever has been earned and not paid must be paid out with the final pay.

How it works

Work out vacation pay by multiplying the employee's wages for the vacation year by the percentage for their length of service. An employee in the 4% band who earned $30,000.00 in the year is owed $1,200.00 of vacation pay.

What counts as wages for this calculation differs by province. Regular pay is always in. Whether overtime, bonuses, commissions or holiday pay are included depends on your province's rules, so check before you set up payroll.

Keep track of each employee's service date. When they reach the year that moves them to the next band (for example 6% from 5 years in Ontario, or from 8 years in New Brunswick), the percentage changes from that point on. Saskatchewan is different: it starts at 3 weeks and 5.77%.

Common mistakes: paying 4% to someone who has moved into the 6% band, forgetting to include vacation pay in the final pay, and assuming that a percentage added to each cheque settles everything. Vacation pay and vacation time are tracked separately, so keep records of both.

Vacation pay by province

The vacation pay percentage and the year it increases, checked against official government sources on 7 October 2026.

Where the work is done	The rule
Federal	4% (2 weeks); 6% (3 weeks) after 5 years; 8% (4 weeks) after 10 years. Final vacation pay is due within 30 days of the last day worked.
British Columbia	4% (2 weeks) after 12 months; 6% (3 weeks) after 5 years.
Alberta	4% (2 weeks); 6% (3 weeks) after 5 years.
Saskatchewan	5.77% (3 weeks); 7.69% (4 weeks) after 10 years.
Manitoba	4% (2 weeks); 6% (3 weeks) after 5 consecutive years.
Ontario	4% (2 weeks); 6% (3 weeks) from 5 years.
Quebec	4% (2 weeks); 6% (3 weeks) from 3 years. The official page does not say whether this means after completing 3 years.
New Brunswick	4% (2 weeks); 6% (3 weeks) from 8 years. Final vacation pay is due within 21 days of the last day.
Nova Scotia	4% (2 weeks); 6% pay from the 8th year, with 3 weeks off in the 9th year. Final vacation pay is due within 10 days.
Prince Edward Island	4% (2 weeks); 6% (3 weeks) from 5 years. Final vacation pay is due by the last day of the next pay period after employment ends.
Newfoundland and Labrador	4% (2 weeks); 6% (3 weeks) from 15 years.
Yukon	4% (2 weeks).
Northwest Territories	4% (2 weeks) in the first 5 years; 6% (3 weeks) from the 6th year.
Nunavut	4% (2 weeks) for the first 5 years; 6% (3 weeks) after.

For Prince Edward Island and New Brunswick, the Act and the web page word the 6% year slightly differently; confirm the exact year with the provincial office.

Example: A Moncton bakery works out vacation pay

Maya runs a 9-person bakery in Moncton, New Brunswick. Her baker, Luc, has worked there for 3 years and earned $36,000.00 in his last vacation year. He is in the 4% band, so his vacation pay for that year is $1,440.00, paid when he takes his 2 weeks off.

Maya notes in her records that Luc reaches 8 years in 2031, when New Brunswick moves him to 3 weeks and 6%.

Hollis handles the exit checklist

When someone leaves, Hollis in the Staffkin HR Suite gives you the exit checklist, including final pay timing, vacation pay owed and the Record of Employment deadline.

Try Hollis live

Free tools and guides for this

Questions about vacation pay

Is vacation pay 4% of gross pay?

It is 4% of the wages that count under your province's rules for most employees in their first years, and higher with longer service. Which pay items count as wages differs by province.

How do I calculate vacation pay?

Multiply the wages that count under your province's rules for the vacation year by the percentage for the employee's length of service, for example 4% or 6%. $30,000.00 at 4% is $1,200.00.

Do I have to pay out vacation pay when an employee quits?

Yes. Earned and unpaid vacation pay is owed with the final pay, and some provinces set a specific deadline, such as 10 days in Nova Scotia or 21 days in New Brunswick.

Official sources

General information for Canadian employers, not legal advice. Rules differ by province and territory and change over time, so check with your provincial employment standards office (or the federal Labour Program if you are federally regulated) before you rely on it. See employment standards by province.

Checked against official sources on 4 November 2026.