In Ontario, employees are entitled to at least two weeks of paid vacation per year after 12 months of employment, increasing to three weeks after five years. Vacation pay must be at least 4% of the employee’s gross wages (6% after five years).

Employers can either pay vacation pay with each paycheck or provide it as a lump sum when the employee takes their vacation. Payroll systems should track vacation pay accruals and payments to ensure compliance with the ESA and avoid disputes.