In Ontario, calculating public holiday pay for part-time staff requires a specific formula: take all regular wages earned plus any vacation pay payable in the four workweeks right before the holiday, and divide that total by 20. This gives the employee their average daily wage for the statutory holiday.
Navigating public holiday pay—often referred to as statutory holiday pay—can be one of the most confusing aspects of payroll for employers in Ontario. As of May 2026, the province recognizes nine official public holidays under the Employment Standards Act (ESA), including New Year’s Day, Family Day, Good Friday, Victoria Day, Canada Day, Labour Day, Thanksgiving Day, Christmas Day, and Boxing Day.
Unlike salaried full-time workers who simply receive their regular day’s pay, part-time employees have fluctuating schedules. This means their public holiday pay must be calculated based on their recent earnings history. Whether your business is a bustling restaurant in Toronto, a retail store in Brampton, or an office in Ottawa, miscalculating this statutory entitlement can trigger Ministry of Labour audits and damage workplace morale. If you are struggling with complex payroll compliance, consulting an employment lawyer from our directory can save you from costly legal disputes.
Step-by-Step Process to Calculate Statutory Pay
Ontario’s “divide by 20” rule is mandatory for part-time, casual, and temporary staff. Following these steps ensures you remain fully compliant with ESA legislation. 📈
Step 1: Determine Employee Eligibility
In Ontario, almost all employees qualify for public holiday pay right from their very first day of work. There is no probationary waiting period.
The only time an employee loses this right is if they fail the “First and Last” rule. This rule states that an employee must work their entire regularly scheduled shift right before the holiday, and their entire regularly scheduled shift right after the holiday. If they call in sick without reasonable cause on either of those days, they forfeit the holiday pay.
Step 2: Identify the Four-Week Period
Look at the company’s established workweeks (e.g., Sunday to Saturday). You must isolate the four completed workweeks immediately preceding the workweek in which the public holiday falls. 📆
Do not simply look back 28 days from the holiday date. You must strictly use the standard workweek definitions of the company.
Step 3: Tally Regular Wages and Vacation Pay
Calculate the total amount of regular wages the employee earned during those four workweeks. Regular wages include hourly pay and commissions.
Do not include previous overtime pay, premium pay, or previous public holiday pay in this calculation. However, if any vacation pay was paid out to the employee during this specific four-week window, it must be added to the total.
Step 4: Divide the Total by 20
Once you have the gross sum of regular wages and applicable vacation pay from the four-week window, divide that exact number by 20.
The resulting number is the exact dollar amount of public holiday pay the part-time employee is legally entitled to receive, regardless of whether they were scheduled to work on the actual holiday or not.
Step 5: Factor in Premium Pay if They Work the Holiday
If the part-time employee agrees to work on the statutory holiday, the employer generally has two options. They can pay the calculated holiday pay PLUS premium pay (time-and-a-half) for all hours worked on the holiday. Alternatively, they can pay regular wages for the day but provide a substitute day off with public holiday pay within three months. Most part-time workers in retail and hospitality prefer the first option.
How Much Are Fines and Legal Costs in Ontario?
Making errors in payroll can lead to serious financial and legal repercussions. Employees can file claims directly with the Ministry of Labour for free, triggering a government investigation into the company’s books.
- Back Pay: Employers will be ordered to retroactively pay all miscalculated statutory holiday pay, which can total thousands of dollars across a large part-time workforce.
- Administrative Penalties: The Ministry can issue fines starting at $250 CAD per violation.
- Corporate Lawyer Consultations: If you need a law firm to audit your payroll practices or represent you during a Ministry investigation, expect to pay between $350 and $600 CAD per hour.
| Holiday Status | Examples | Entitlement for Part-Time Staff |
|---|---|---|
| Official Statutory Holiday | Canada Day, Labour Day, Family Day | Mandatory Public Holiday Pay (Divide by 20 rule) |
| Civic Holiday | August Civic Holiday (Simcoe Day) | No legal entitlement under ESA (unless in contract) |
| Federal Only Holiday | Truth and Reconciliation Day, Remembrance Day | No ESA entitlement in Ontario (unless federally regulated) |
How Long Does the Process Take?
The calculation of statutory holiday pay should occur immediately during the payroll processing for the period in which the holiday falls. The employee must receive their holiday pay on the standard pay date for that specific cycle. ⌛
If an employee disputes their payout and files an ESA claim, the Ministry of Labour investigation can take anywhere from 3 to 8 months. The Ministry has the authority to audit company records going back up to two years, meaning historical payroll errors can come back to haunt an employer long after the holiday has passed.
Frequently Asked Questions (FAQ)
What if a part-time employee just started working a week ago?
They are still entitled to holiday pay! You simply take whatever regular wages they earned in that single week prior to the holiday workweek, and still divide it by 20. It will result in a small amount, but it is legally required.
Is Remembrance Day a statutory holiday in Ontario?
No, Remembrance Day is not a statutory public holiday under the Ontario Employment Standards Act. Unless your business is federally regulated (like a bank or airline), you are not legally required to provide holiday pay on November 11th.
Does the divide by 20 rule apply to full-time salaried staff?
Technically yes, the formula applies to everyone. However, for a full-time salaried employee who works a standard 5-day week, their regular wages over four weeks divided by 20 perfectly equals one standard day of pay. The formula exists primarily to find the fair daily average for workers with irregular hours.
What happens if the holiday falls on a day the employee normally has off?
They still get paid. If the public holiday falls on a day the part-time employee is not scheduled to work, they are still entitled to the public holiday pay calculated using the divide by 20 rule. Alternatively, the employer can provide a substitute day off with pay.
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