At a glance
- Vacation pay comes from the province or territory where the employee works, not from the CRA.
- There is no single national rate. Most places start at 4% and move to 6% after a number of years that ranges from 3 to 15.
- Saskatchewan starts at 5.77%. Yukon stays at 4% at every length of service.
- These are minimums. A contract can give more, never less.
The short version
Vacation pay is set by the employment standards of the province or territory where the employee works, not by the CRA. There is no single national rate. Most places start at 4% and move to 6% after some years of service, but the number of years ranges from 3 (Quebec) to 15 (Newfoundland and Labrador). Saskatchewan starts higher, at 5.77%, and Yukon never goes above 4%.
The percentage is applied to the employee's wages for the year. What counts as "wages" differs a little by province (for example, whether overtime or certain bonuses are included), so check the official source for your province if you pay anything beyond regular wages.
Minimums by province
"Years" means completed years of continuous employment with the same employer. Each row links to the government page or statute we checked.
| Jurisdiction | Minimum vacation pay | Minimum vacation time | Source |
|---|---|---|---|
| Alberta | 4%, then 6% after 5 consecutive years | 2 weeks, then 3 weeks after 5 consecutive years | Official source |
| British Columbia | 4%, then 6% after 5 years | 2 weeks after 12 months, then 3 weeks after 5 years | Official source |
| Manitoba | 4%, then 6% after 5 consecutive years | 2 weeks, then 3 weeks after 5 years | Official source |
| New Brunswick | 4%, then 6% at 8 or more years | 2 weeks, then 3 weeks at 8 or more years | Official source |
| Newfoundland and Labrador | 4%, then 6% at 15 or more years | 2 weeks, then 3 weeks at 15 or more years | Official source |
| Nova Scotia | 4%, then 6% from the start of the 8th year (after 7 years) | 2 weeks, then 3 weeks after 8 years | Official source |
| Northwest Territories | 4% for the first 5 years, then 6% from the 6th year | 2 weeks, then 3 weeks from the 6th year | Official source |
| Nunavut | 4% for the first 5 years, then 6% from the 6th year | 2 weeks, then 3 weeks after 5 years | Official source |
| Ontario | 4%, then 6% at 5 or more years | 2 weeks, then 3 weeks at 5 or more years | Official source |
| Prince Edward Island | 4%, then 6% at 5 or more years | 2 weeks, then 3 weeks at 5 or more years | Official source |
| Quebec | 4%, then 6% at 3 or more years | 2 weeks, then 3 consecutive weeks at 3 or more years | Official source |
| Saskatchewan | 5.77% (3/52) from the start, then 7.69% (4/52) after 10 years | 3 weeks, then 4 weeks after 10 years | Official source |
| Yukon | 4% at every length of service | 2 weeks per completed year | Official source |
| Federally regulated (Canada Labour Code) | 4%, then 6% after 5 years, then 8% after 10 years | 2 weeks, 3 weeks after 5 years, 4 weeks after 10 years | Official source |
Where employers get caught
Saskatchewan starts at 5.77%
Saskatchewan gives 3 weeks of vacation from the first year, so vacation pay is 3/52 of wages (5.77%) from the start. An employer who uses the common 4% figure is under-paying every Saskatchewan employee. After 10 years it rises to 4/52 (7.69%).
Nova Scotia's pay and time thresholds don't match
In Nova Scotia, vacation pay rises to 6% at the start of the 8th year (after 7 completed years), but the third week of time off only starts after 8 years. The pay increase comes a year before the extra week.
Prince Edward Island changed its rules on June 30, 2026
PEI's new Employment Standards Act came into force on June 30, 2026. Under it, vacation pay is 4% with less than 5 years of continuous employment and 6% at 5 or more years, with 3 weeks of vacation at 5 years. If your PEI payroll was set up before that date, check that long-serving employees are on the right rate.
Quebec counts service at the end of the reference year
In Quebec, vacation is based on uninterrupted service at the end of the reference year, which normally runs May 1 to April 30. An employee who reaches 3 years partway through the reference year gets 6% on the whole year's wages.
Federally regulated employers follow the Canada Labour Code
If your business is federally regulated (for example banking, telecommunications, or transport across provincial borders), provincial rules don't apply to vacation pay. The Canada Labour Code sets 4%, then 6% after 5 years, then 8% after 10 years.
Pay each period or accrue
Most provinces let you either add vacation pay to each paycheque or hold it and pay it out when the employee takes time off. Some provinces have conditions on paying it every period (for example, it may need to be shown separately on the pay stub, or may only be allowed for certain types of employees). Check your province's source above before switching methods.
Whichever method you use, the minimum percentage is the same. The method only changes when the employee receives the money.
Vacation pay in PayCub
Vacation pay is set per employee on the employee's profile. You choose the percentage and whether it is paid on each pay stub or accrued as a running balance. The how to run payroll in PayCub guide walks through both settings.
- Province-based default. When you add a new employee, PayCub suggests the starting percentage for their Province of Employment (for example 5.77% in Saskatchewan). You can change it.
- Below-minimum reminder. If the percentage you enter is below the minimum for the employee's province and years of service since their start date, PayCub shows a reminder under the field. It never blocks saving or running payroll, because a contract may legitimately set things up differently.
Questions about your setup?
Email [email protected]. If you're switching from another system, we can import your companies and employees for free.