Vacation pay is calculated on an employee's wages for a year of employment or portion of a year which includes all salary, commission, earned bonuses and any other monetary compensation for work or services for being at the disposal of an employer. It also includes overtime, public holiday pay, vacation pay and pay instead of notice.
The vacation pay calculation depends on how many years the employee has worked for the same employer. During the first nine years of employment, multiply the employee's wages for the 12-month period by 3/52 (5.77 per cent). Once an employee has completed 10 years of employment with the same employer, the employee is eligible for four weeks of vacation in the upcoming year and vacation pay of 4/52 (7.69 per cent).
An employee has worked for less than 10 years for the same employer. When the employee takes a three-week vacation, the vacation calculation is:
Annual salary (April to May): $25,000.00
Add commission: $25,000.00 + $3,000.00 = $28,000.00 Total Annual Salary
Multiply by vacation pay rate: $28,000.00 x 3/52 = $1,615.39
Vacation pay of $1,615.39 would be payable for the three week vacation.
If the employee in the above example had worked for the same employer for 10 years or more, the vacation pay calculation would be ($28,000 X 4/52) = $2,153.85.
Visit the Vacation Pay Calculator calculate the amount of vacation pay owed to an employee.