Public Holiday Pay in Ontario: The Formula Most Employers Get Wrong

Public holiday pay in Ontario is not a normal day's wage, and that single misunderstanding is behind most of the stat pay errors we see in Canadian back offices. The Employment Standards Act sets a specific calculation, and it almost never lands on the same number as an ordinary shift. Thanksgiving falls on Monday, October 12, and this year Christmas Day lands on a Friday with Boxing Day the Saturday after, so the last quarter is when this gets expensive.

Here's what the rules actually say, what the arithmetic looks like, and where the quiet mistakes hide.

What is public holiday pay, and how is it different from a normal day's wage?

Public holiday pay is a separate amount produced by a formula, not the wage an employee would have earned had they worked. It is built from the four work weeks before the work week containing the holiday, so it moves with recent hours rather than with a fixed shift length.

That matters because payroll software will accept whatever you type. If your process is "pay them a normal day," you're approximating the calculation rather than running it. For salaried staff on stable hours that's usually close. For hourly, part-time and variable-hours people, it can be well off in either direction.

What is the public holiday pay formula in Ontario?

Ontario's rule is stated plainly in the government's own guide: the entitlement equals all of the regular wages earned in the four work weeks before the work week with the public holiday, plus all of the vacation pay payable over that same period, divided by 20. There is no separate rule for part-time staff, and no minimum length of service.

Two details catch people. First, "regular wages" is narrower than it sounds: it excludes overtime pay, vacation pay, public holiday pay, premium pay, termination pay and severance pay. Second, whether vacation pay enters the calculation depends on how you pay it. If the employee agreed in writing to take it on every cheque, you include at least four per cent of the wages earned in the period. If they take it in a lump sum and weren't on vacation during those four weeks, you include nothing.

Here's the arithmetic for an employee with two years of service, $2,400 in regular wages over the four qualifying work weeks, and a written agreement to take four per cent vacation pay on each cheque.

So the employer who pays a normal shift overpays by $19.20. Change one detail and it moves again: if she took her vacation pay in a lump sum instead and wasn't on vacation in those four weeks, the vacation component is zero, and she's owed $2,400 ÷ 20, or $120. Same wages, same holiday, $4.80 less, purely because of how her vacation pay is scheduled.

Change the wages and it flips the other way. An employee with $3,600 in regular wages over those four weeks, also taking four per cent on each cheque, is owed $3,744.00 ÷ 20, or $187.20, and the same $144.00 shortcut underpays them by $43.20. One direction costs you money. The other direction is a wage complaint.

Which days are public holidays in Ontario, and which ones are not?

Ontario recognises nine public holidays under the ESA: New Year's Day, Family Day, Good Friday, Victoria Day, Canada Day, Labour Day, Thanksgiving Day, Christmas Day and Boxing Day. Days that feel like holidays but aren't on that list carry no ESA public holiday entitlement at all.

The province is direct about this. While some employers give a day off on Easter Sunday, Easter Monday, the first Monday in August, or Remembrance Day, the employer isn't required to do so under the ESA. The September 30 National Day for Truth and Reconciliation isn't among the nine either, though it is one of the ten general holidays for federally regulated employers under the Canada Labour Code. If you're federally regulated, you're reading the wrong rulebook, and your formula is one-twentieth of wages excluding overtime from the four weeks before.

Who qualifies, and who loses the entitlement?

Most employees qualify, whatever their status or length of service. The entitlement is lost when an employee fails, without reasonable cause, to work all of their last regularly scheduled day before the holiday or all of their first after it, or fails to work their whole shift on a holiday they agreed to work.

This is the "last and first" rule, and the detail people miss is that those days don't have to sit next to the holiday on the calendar. A part-timer whose last scheduled shift was the previous Wednesday still qualifies if they worked it. An employee who fails to qualify is usually still owed premium pay for every hour they do work.

What happens when the holiday lands on a day someone doesn't normally work?

The employee gets either a substitute day off with public holiday pay, or public holiday pay for the holiday itself if they agree to that electronically or in writing. A substitute day has to be scheduled no later than three months after the holiday, or up to twelve months out with the employee's written or electronic agreement.

This is the one to plan for right now. Boxing Day 2026 falls on a Saturday, so for a business on a Monday to Friday week, every employee is looking at a substitute day or a written agreement. Where you give a substitute day, the ESA also wants a written statement naming the holiday being substituted, the date of the substitute day and the date you handed it over, given before the holiday.

If an employee does work the holiday, there are two paths. They take regular wages for the hours worked plus a substitute day off with public holiday pay, or they take public holiday pay plus premium pay at one and a half times their regular rate for every hour worked, with no substitute day. The employee has to agree to the arrangement electronically or in writing.

Did anything change for 2026?

The pay rules didn't change, but the store-opening rules did, and the two get confused. Ontario amended the Retail Business Holidays Act this spring, and the change has been in force since April 24, 2026, removing Family Day and Victoria Day from the closure framework and removing municipal authority to require retail closures on those two days. Stores across the province may now open on both, whatever the local by-law used to say.

The province was explicit that this doesn't touch entitlements. Because both days remain public holidays under the ESA, public holiday pay, premium pay and the right for many retail employees to refuse work on a public holiday all stay in place. So if you're a retailer who opened on those days for the first time this year, your obligation didn't shrink. You have more staff working a public holiday, which means more premium pay and more written agreements to keep on file.

What does getting it wrong actually cost?

Wages are recoverable for two years under the ESA, so an error in your stat pay calculation isn't a one-holiday problem. With nine public holidays a year, a formula that's been wrong since you hired your first part-timer compounds quietly across everyone who's passed through.

Under an employment standards claim, wages must have been owed in the two years before the claim was filed to be recoverable. That's eighteen holidays of exposure per employee, and nobody notices until somebody leaves and does the math. The fix is cheap: run the formula every time, keep the four-week figures, and get the written agreements when the rules call for them.

The YNL Group Inc. approach

We run this calculation for our clients every holiday, from the payroll data we already hold, so the number is right before it reaches a pay stub rather than after somebody queries it. That's what a back-office partner is for, and it costs less than the cost of a full-time employee.

If your stat pay has been a best guess, now is a good moment to check it. Talk to us and we'll look at how your last few holidays were calculated.

This article is general information about Ontario's employment standards, not legal advice. For a specific situation, check with the Ministry of Labour or your employment counsel.