How to Calculate Holiday Pay in Ontario
Calculating holiday pay in Ontario can be a complex task, especially for employers and employees who are not familiar with the province’s employment standards. In Ontario, the calculation of holiday pay is governed by the Employment Standards Act, 2000 (ESA). This act sets out the minimum standards for employment in the province, including the rules for calculating holiday pay. In this article, we will guide you through the process of how to calculate holiday pay in Ontario.
Understanding the Basics
Before diving into the calculation process, it’s important to understand the basics of holiday pay in Ontario. Under the ESA, employees are entitled to paid holidays, which include Christmas Day, New Year’s Day, Good Friday, Victoria Day, Canada Day, and Labour Day. If an employee works on a holiday, they are entitled to receive either their regular pay for that day or a paid day off with public holiday pay.
Calculating Holiday Pay for Employees on an Hourly Wage
If an employee is on an hourly wage, their holiday pay is calculated based on the number of hours they would have worked during the holiday. Here’s how to calculate it:
1. Determine the number of hours the employee would have worked on the holiday. This can be calculated by dividing the employee’s regular work hours per week by the number of workdays in a week, and then multiplying that by the number of hours the employee works per day.
2. Multiply the number of hours from step 1 by the employee’s regular hourly wage.
3. Add any other pay, such as overtime, bonuses, or commissions, that the employee would have earned on the holiday.
4. Divide the total from step 3 by the number of days in the pay period to get the daily rate.
5. Multiply the daily rate from step 4 by the number of days the employee is entitled to holiday pay.
For example, if an employee works 40 hours per week and has a regular hourly wage of $20, and the holiday pay period is 5 days, the calculation would be as follows:
40 hours/week ÷ 5 days/week = 8 hours/day
8 hours/day × $20/hour = $160
$160 × 5 days = $800
The employee’s holiday pay for the 5-day holiday pay period would be $800.
Calculating Holiday Pay for Employees on a Salary
For employees on a salary, the calculation is slightly different. Here’s how to calculate holiday pay for a salaried employee:
1. Divide the employee’s annual salary by the number of weeks in a year (52 weeks).
2. Divide the result from step 1 by the number of days the employee is entitled to holiday pay.
3. Multiply the result from step 2 by the number of days the employee is entitled to holiday pay.
For example, if an employee earns a salary of $40,000 per year and is entitled to 5 days of holiday pay, the calculation would be as follows:
$40,000/52 weeks = $769.23 per week
$769.23/5 days = $153.85 per day
$153.85 × 5 days = $769.23
The employee’s holiday pay for the 5-day holiday pay period would be $769.23.
Understanding Public Holiday Pay
In addition to the regular holiday pay, employees may also be entitled to public holiday pay if they work on a public holiday. Public holiday pay is calculated as the greater of:
1. The employee’s regular pay for the day they worked, or
2. The employee’s regular pay for a typical workday, plus the amount the employee would have earned for working on the public holiday.
It’s important to note that the calculation of public holiday pay can vary depending on the employee’s employment agreement and the specific circumstances of their employment.
Conclusion
Calculating holiday pay in Ontario requires attention to detail and an understanding of the province’s employment standards. By following the steps outlined in this article, both employers and employees can ensure that holiday pay is calculated correctly and fairly. Always refer to the ESA or consult with an employment lawyer or HR professional if you have any questions or concerns regarding holiday pay in Ontario.
