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How to Pay No Tax on Passive Income in Canada!
November 21, 2022
Ontario Stat Holidays in 2023 | What to Pay Your Employees
November 21, 2022

What to pay your employees for holidays?

One of the most wonderful times in our lives is the holiday season, when we create many memories, enjoy time with friends and family, and travel to new locations. Finally, we get a break from our stressful schedules and workplace. Naturally, taking vacations is incredibly beneficial to our physical and mental wellbeing. After working hard and carrying out obligations for months, holidays are highly required. It aids with our physical and mental recovery so that we may function more effectively at work.

The Ontario government is aware of how crucial holidays are for workers. Therefore, just 9 statutory holidays are observed in Ontario as per the 2018 changes to the province’s holiday legislation. In general, employees are permitted to take vacation days during these nine statutory holidays.

What are the nine statutory holidays in Ontario?

In Ontario, employees are allowed to take a total of 9 statutory holidays in a year.

  • New Year’s Day – (January 1, 2023)
  • Family Day – (February 20, 2023)
  • Good Friday – (April 7, 2023)
  • Victoria Day – (May 22, 2023)
  • Canada Day – (July 1, 2023)
  • Labour Day – (September 4, 2023)
  • Thanksgiving Day – (October 9, 2023)
  • Christmas Day – (December 25, 2023)
  • Boxing Day – (December 26, 2023)

These 9 holidays also add some more holidays where there is no official notice but some companies in Ontario do give off to their employees for instance remembrance day (November 11th) and Civic Holiday (First Monday in August). Companies are instructed to give off in these 9 statutory holidays and also pay the employees according to their salaries. 

How is statutory holiday pay calculated in Ontario?

According to the Ontario state rule, employees are entitled to paid statutory holidays regardless of their status (full- or part-time), hiring date, or number of days worked before the holidays. All employees are entitled to statutory holiday pay. Besides this, the worker is not entitled to holiday compensation if they do not complete all of their final regularly planned workday before the public holidays or all of their first public holiday scheduled without justification. Moreover, employees are also ineligible if they committed to work on a holiday or missed that job without a valid excuse.

In Ontario, the employee’s total earnings in the four weeks leading up to a public holiday are added to the total vacation pay due for those four weeks, and the sum is divided by 20.

Regular statutory payment 

Let’s take an example: Ayesha works from Monday to Sunday. She is paid $15 per hour and has worked a total of 30 hours in 5 weeks. Considering that she completed her final shift before the holiday and will be working the following day, too, If she is scheduled for the day, she is qualified for both standard and premium statutory pay.

  1. Regular pay that Ayesha earned in 5 weeks: $15 x 30 hours = $450 + $17 (vacation payment). 
  2. Regular statutory payment: 450+17 = $467/20 = $23.35

In total, Ayesha will be paid $23.35 in regular statutory payments.

Premium payment 

This is calculated at one and a half times the regular wage x the number of hours they worked. Regular hourly wage x 1.5 = premium pay.

For example, Ali works 10 hours a shift and is paid $15 per hour. He also works 10 hours on statutory holidays. He is qualified for both regular and premium statutory pay since he performed his final planned shift before the holiday and will be working the first shift following.

Regular pay that Ali earned in 5 weeks: 15 x 30 (10 x 5) = $450 + $15 (vacation payment).

$450 + $15 = $465/ 20= $23.25

Lastly, you can calculate holiday payments through the Ontario public holiday calculator.

Conclusion 

Ontario’s statutory holidays are very important and exciting for employees. Everyone loves to spend time with family and make good memories. There are 9 official statutory holidays in Ontario. What to pay your employees is calculated after calculating the per-hour work rate multiplied by the number of weeks worked by employees. Moreover, you can also calculate the holiday payment through the official Ontario holiday calculator. 

Salman Rundhawa
Salman Rundhawa
Salman Rundhawa is the founder of Filing Taxes. Salman provides valuable tax planning, accounting, and income tax preparation services in Toronto, Mississauga, Oakville, and Hamilton.

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