If you are an employee in Ontario, Canada, then you are entitled to vacation pay. Vacation pay is a percentage of your gross wages that your employer has to pay you as compensation for taking time off work. The amount of vacation pay you receive depends on your employment status, length of service, and the amount of wages earned during the year.
How to Calculate Vacation Pay Per Hour
To calculate vacation pay per hour, you need to know the following:
- The percentage of vacation pay that applies to your employment situation;
- Your gross hourly wage;
- Your length of service with the company.
Step 1: Determine the Percentage
In Ontario, most employees are entitled to 4% vacation pay. This means that for every hour worked, you will receive 4% on top of your regular hourly wage.
Step 2: Calculate Your Gross Hourly Wage
Your gross hourly wage is your total hourly rate before any deductions have been made. For example, if you earn $20 per hour and work 8 hours a day, then your daily wage would be $160 ($20 x 8).
To calculate your gross hourly wage, divide your daily wage by the number of hours worked each day. In this case, it would be $20 per hour ($160 / 8).
Step 3: Determine Your Length of Service
The length of service refers to the number of years or months that you have been employed by the company. In Ontario, employees are entitled to two weeks (or ten days) paid vacation after completing one year of service with an employer.
The Calculation Formula
Now that you know all these details, let’s put them into practice by using this formula:
Vacation Pay Per Hour = Gross Hourly Wage x Vacation Pay Percentage
Example:
Assume you earn $20 per hour and have worked for 3 years with your employer. Your vacation pay percentage is 6% (4% for the first two years plus an additional 2% for your third year of service). You can calculate your vacation pay per hour as follows:
Vacation Pay Per Hour = $20 x 6%
Vacation Pay Per Hour = $1.20
Therefore, your vacation pay per hour is $1.20.
Final Thoughts
Calculating vacation pay can be confusing, but it’s important to know how much you are entitled to receive from your employer. By using this formula, you can determine your vacation pay per hour and ensure that you are receiving the correct amount. Remember to keep track of your length of service and gross hourly wage to ensure that you receive the proper amount of vacation pay each year.