Ontario employers deal with public holiday pay compliance every few weeks — and get it wrong surprisingly often. The formula looks simple until you factor in variable hours, commission income, or part-time schedules. A miscalculation applied across all eligible employees can trigger a Ministry of Labour audit and back-pay orders that run into thousands of dollars.
Ontario has nine statutory public holidays per year. Employee entitlement is calculated from four weeks of prior earnings divided by 20 — not a flat daily wage. There are two compliant options when staff work on a holiday, and specific substitute-day rules when a holiday falls on a non-working day. Getting this wrong exposes employers to Ministry orders and retroactive back pay.
Table of Contents
- Ontario’s 9 Public Holidays in 2026
- Who Qualifies: The Last and First Rule
- The Public Holiday Pay Formula
- Worked Example
- Working on a Public Holiday: Two Options
- Substitute Holidays Explained
- Commission and Variable Pay Employees
- Industry-Specific Rules
- 2026-Specific Notes
- Common Mistakes Table
- Frequently Asked Questions
Ontario’s 9 Public Holidays in 2026
The Employment Standards Act (ESA) specifies nine public holidays per year. These are mandatory entitlements — employers cannot substitute different days without following the ESA framework, and they cannot pay cash instead of providing the holiday.
| Public Holiday | 2026 Date | Day of Week | Note |
|---|---|---|---|
| New Year’s Day | January 1 | Thursday | — |
| Family Day | February 16 | Monday | Third Monday in February |
| Good Friday | April 3 | Friday | — |
| Victoria Day | May 18 | Monday | Last Monday before May 25 |
| Canada Day | July 1 | Wednesday | Mid-week — no automatic long weekend |
| Labour Day | September 7 | Monday | First Monday in September |
| Thanksgiving Day | October 12 | Monday | Second Monday in October |
| Christmas Day | December 25 | Friday | — |
| Boxing Day | December 26 | Saturday | Substitute day required for M–F employees |
Not on the ESA list: Remembrance Day (November 11) is a federal statutory holiday but not an Ontario ESA public holiday. Easter Monday, Civic Holiday (first Monday in August), and Good Saturday are not ESA holidays either — though employers can offer them voluntarily or through collective agreement.
Who Qualifies: The Last and First Rule
Under ESA section 24, most employees automatically qualify for public holiday pay — unless they fail, without reasonable cause, to meet both conditions:
- Work their entire last regularly scheduled shift before the public holiday, and
- Work their entire first regularly scheduled shift after the public holiday
This is the “Last and First Rule.” Missing either shift — without reasonable cause — forfeits the entitlement.
What counts as “reasonable cause”?
The ESA doesn’t define it, but Ministry guidance and case law have recognized illness, family emergencies, and employer-approved leave as reasonable cause. A pattern of calling in sick the day before statutory holidays — especially without documentation — can support a finding that the cause was not reasonable.
| Employee Situation | Qualifies? |
|---|---|
| Works full last shift and full first shift | Yes |
| Calls in sick day before (no reasonable cause, no documentation) | No |
| On approved vacation on days surrounding the holiday | Yes — vacation is not “failing to work” |
| On ESA-protected leave (pregnancy, parental, sick) | Yes — protected leave preserves entitlement |
| Schedule does not include the day before or after | Yes — rule only applies to scheduled days |
| Casual employee with no fixed schedule | Yes, if they worked at least one day in the four prior weeks |
Key trap: Employees on ESA-protected leaves still qualify for public holiday pay during their leave period. Withholding it is a common compliance failure and can also give rise to a human rights complaint if the employee is on disability-related leave.
The Public Holiday Pay Formula
The most frequent payroll error in Ontario: paying the employee’s “average day” or an 8-hour flat rate. Neither is what the ESA requires.
The correct formula:
Public Holiday Pay = (Regular wages earned in the 4 work weeks immediately before the work week containing the holiday + Vacation pay payable on those wages) ÷ 20
Breaking down the components:
- Work week: The employer’s established recurring work week (e.g., Sunday–Saturday), not the calendar week
- Four work weeks before: The four complete work weeks that end before the work week in which the holiday falls — not including the holiday week itself
- Regular wages: All wages actually earned for time worked during those four weeks — excluding overtime premium, excluding vacation pay already paid out in those weeks
- Vacation pay payable: Vacation pay accrued but not yet paid out — typically 4% of regular wages for employees with fewer than 5 years of service, 6% for those with 5+ years (or whose employment contract provides more)
- ÷ 20: Dividing by 20 produces the average daily entitlement across a four-week period with 20 working days (assuming a five-day schedule)
Worked Example
An employee earns $21/hr and works variable hours. The work week runs Sunday–Saturday. Canada Day (July 1, 2026) falls on a Wednesday — so the four work weeks before the holiday work week are June 1–7, June 8–14, June 15–21, and June 22–28.
| Work Week | Hours Worked | Regular Wages |
|---|---|---|
| June 1–7 | 44 hrs | $924 |
| June 8–14 | 38 hrs | $798 |
| June 15–21 | 40 hrs | $840 |
| June 22–28 | 36 hrs | $756 |
| Total | — | $3,318.00 |
Vacation pay accrued but not yet paid: $3,318 × 4% = $132.72
Public holiday pay = ($3,318.00 + $132.72) ÷ 20 = $172.59
If the employer had simply paid 8 hours × $21 = $168.00, the payment would be $4.59 short per employee. Applied across 30 employees over 9 holidays per year, the shortfall adds up — and it’s auditable two years back.
Working on a Public Holiday: Two Options
When an employee works on a public holiday, there are two ESA-compliant options. The employer generally selects the option — unless a collective agreement or industry rule provides otherwise.
Option 1: Public Holiday Pay + 1.5x Premium Pay
The employee receives their full public holiday pay for the day plus premium pay at 1.5 times their regular rate for every hour worked on the holiday. They do not get a substitute day off.
Option 2: Regular Wages + Substitute Day Off
The employee receives their regular wages (straight time) for all hours worked on the holiday, and a substitute day off at a later date with public holiday pay.
| Option 1: Public Holiday Pay + Premium | Option 2: Regular Pay + Substitute Day | |
|---|---|---|
| Day of holiday | Public holiday pay + 1.5× premium for all hours worked | Regular straight-time wages only |
| Substitute day | None | Paid day off with public holiday pay |
| Who decides | Employer (this is the default if no agreement) | Employer in qualifying industries; requires agreement in others |
| Substitute day deadline | N/A | Within 3 months; or up to 12 months with written agreement |
| Best for | Employees who prefer extra pay; simpler payroll administration | Operations requiring all staff on statutory holidays (hospitality, healthcare) |
Substitute Holidays Explained
When a public holiday falls on a day the employee doesn’t normally work, the employer must still provide the holiday — just on a different day.
The default rule: Give the employee a substitute day off with public holiday pay.
The alternative (with written agreement): Pay the public holiday pay with no substitute day off.
This matters most for 2026 because Boxing Day (December 26) falls on a Saturday. For any employee whose regular schedule is Monday–Friday:
- Default: Provide a substitute day off — typically Monday, December 28 — with public holiday pay
- Alternative: With a signed written agreement, pay the public holiday pay amount with no substitute day
Employers who simply ignore a weekend public holiday and neither provide a substitute day nor obtain a written agreement are in breach of the ESA.
Commission and Variable Pay Employees
The ESA formula applies equally to commission-based and variable-pay employees. The inputs change, but the calculation structure doesn’t.
- Commission-only salespeople: Use the commissions earned in the four work weeks before the holiday week as “regular wages.” If no commissions were earned (new hire, slow month), check whether any minimum wage obligation applies.
- Mixed hourly + commission: Add both the hourly earnings and commissions earned in those four weeks, then apply the vacation pay percentage to the combined total.
- Piece workers: Use piece-rate earnings as regular wages.
- Tipped employees: For employers who control tip distribution (pooled tips), those employer-controlled tips may be included in regular wages. Voluntary tips kept directly by employees typically aren’t.
A common error: paying commission workers a flat minimum-wage day for public holidays. The ESA doesn’t have a minimum wage floor for public holiday pay — it uses the formula, which could result in a higher or lower amount depending on the four-week earnings history.
For more on commission pay compliance in Ontario, see our guide on overtime rules for commission employees.
Industry-Specific Rules
Ontario Regulation 285/01 modifies public holiday rules for certain sectors. This is not a wholesale exemption — employees still get their nine holidays — but the mechanics differ.
| Sector | Modified Rule Under O.Reg. 285/01 |
|---|---|
| Hotels, motels, tourist resorts, restaurants, taverns | Employer can direct employees to take a substitute day within 3 months, rather than choosing between Option 1 and Option 2 on the day |
| Hospitals, nursing homes, rest homes, homes for the aged | Special alternative public holiday rules for employees in continuous operations under ESA s.29 |
| Highway transport, road-building | Some modifications for driving schedules |
| Seasonal employees (less than 16 weeks per year) | Reduced public holiday entitlements may apply |
| Building cleaning, guard services | Special rules for employees who regularly work public holidays |
For sector-specific HR guidance, see our pages on restaurant HR and healthcare HR in Ontario.
2026-Specific Notes
Boxing Day on Saturday: The most operationally significant 2026 issue. Any Monday–Friday employee is entitled to a substitute day (default: Monday December 28) with public holiday pay, or public holiday pay alone if there’s a signed written agreement. Plan this before December — retroactive substitute day scheduling is awkward and disputes arise over which day qualifies.
Canada Day on Wednesday: A mid-week holiday doesn’t create an automatic long weekend. Employees who regularly work Wednesdays get the day off (or Option 1/2 if required to work). The ESA doesn’t require employers to give the adjacent Friday off — that’s a voluntary or policy-based decision.
Pay Transparency Act (January 2026): While it doesn’t directly affect holiday pay calculations, the Act’s compensation disclosure requirements mean payroll practices — including how public holiday pay is calculated — will receive more scrutiny from employees reviewing their pay statements. Ensure your pay stubs clearly itemize public holiday pay separately from regular wages. See Pay Transparency Ontario for full compliance guidance.
Common Mistakes Table
| Mistake | Why It’s Non-Compliant | Risk |
|---|---|---|
| Paying average daily wage instead of the ESA formula | The formula requires four-week lookback ÷ 20 — not a flat day rate | Ministry Order to Pay; back wages up to two years |
| Assuming part-time or casual workers don’t qualify | All employees who worked at least one day in the prior four weeks qualify | ESA complaint; back pay |
| Withholding holiday pay from employees on ESA-protected leave | Protected leave does not interrupt public holiday entitlement | ESA complaint + potential human rights complaint |
| Ignoring Boxing Day because it falls on Saturday | ESA requires a substitute day for M–F employees, or written agreement to pay only | ESA non-compliance |
| Automatically disentitling employees who called in sick before a holiday | “Reasonable cause” is factual — illness, family emergency, approved leave all qualify | ESA complaint; human rights overlay if disability-related |
| Paying commission-only staff a minimum wage day | Formula uses actual four-week commission earnings ÷ 20 | Order to Pay |
| Providing Option 2 substitute day after the 3-month window | Must be given within three months, or up to 12 months with written agreement | ESA non-compliance; required to give Option 1 pay retroactively |
| Not calculating vacation pay component of the formula | Vacation pay payable on the four-week wages must be added before dividing by 20 | Systemic underpayment; auditable |
If you’re unsure whether your public holiday pay process is correct, an HR audit can catch systemic errors before they become Ministry complaints. For ongoing compliance support, see managed HR services.
Frequently Asked Questions
How many statutory holidays does Ontario have in 2026?
Ontario recognizes nine public holidays under the ESA: New Year’s Day (January 1), Family Day (February 16), Good Friday (April 3), Victoria Day (May 18), Canada Day (July 1), Labour Day (September 7), Thanksgiving Day (October 12), Christmas Day (December 25), and Boxing Day (December 26).
Is Remembrance Day a statutory holiday in Ontario?
No. Remembrance Day (November 11) is a federal statutory holiday and applies to federally regulated employers. It is not an Ontario ESA public holiday. Ontario employees are not entitled to a day off for Remembrance Day unless the employer voluntarily provides it or a collective agreement requires it.
How is public holiday pay calculated in Ontario?
The ESA formula: (regular wages earned in the four work weeks before the work week containing the holiday + vacation pay payable on those wages) ÷ 20. This applies to all employees including part-time, casual, commission-based, and variable-hours workers.
What happens when a public holiday falls on a Saturday or Sunday?
For employees who don’t normally work that day, the employer must provide a substitute day off with public holiday pay (default), or — with a written agreement — pay the public holiday pay with no substitute day. Boxing Day in 2026 falls on a Saturday, triggering this rule for all Monday–Friday employees.
Can an employer require employees to work on a public holiday?
Yes. When required to work, the employer must pay under Option 1 (public holiday pay plus 1.5× premium pay for hours worked) or give regular wages for the day plus a substitute day off with public holiday pay (Option 2). There is no ESA right to refuse work on a public holiday, absent a collective agreement or other protected ground.
Do part-time and casual employees get public holiday pay in Ontario?
Yes, if they worked at least one day in the four work weeks before the holiday week. The formula accounts for lower earnings — they aren’t paid a full-day amount; they’re paid based on their actual prior earnings.
What is the Last and First Rule?
An employee loses their public holiday pay entitlement if they fail — without reasonable cause — to work their entire last regularly scheduled shift before the holiday AND their entire first regularly scheduled shift after the holiday. Illness, family emergencies, and employer-approved leaves qualify as reasonable cause and preserve entitlement.