How vacation pay works in Federal
Federal sets its vacation pay and vacation time minimums in the Canada Labour Code.
Federal sets its vacation pay and vacation time minimums in the Canada Labour Code. Every employee starts earning vacation pay from their first days of work, at a minimum rate of 4% of gross wages for 2 weeks of vacation time per year.
That minimum rises twice: to 6% and 3 weeks after 5 years of completed, continuous employment, and again to 8% and 4 weeks after 10 years. Each anniversary of your start date moves you into the next tier automatically - the calculator above works out the exact date for you.
Vacation pay is calculated on your vacationable earnings, not just your base salary - Vacation pay is calculated on your gross wages for the year of employment, as defined by the Canada Labour Code. This covers only employees of federally regulated businesses (banks, telecommunications, airlines, interprovincial and international transportation, and a few other sectors) - everyone else follows their province or territory’s employment standards act instead. Enter your actual gross earnings for the period in the calculator above, and it will apply Federal’s exact minimum automatically.
How Federal compares across Canada
Two provinces where many federally regulated employees also work
| Jurisdiction | Weeks | Percent | Threshold | Confidence | Source |
|---|---|---|---|---|---|
| Federal | 2 → 3 → 4 | 4% → 6% → 8% | 5 yrs, 10 yrs | High | Source |
| Alberta | 2 → 3 | 4% → 6% | 5 yrs | High | Source |
| British Columbia | 2 → 3 | 4% → 6% | 5 yrs | High | Source |
| Manitoba | 2 → 3 | 4% → 6% | 5 yrs | High | Source |
| New Brunswick | 2 → 3 | 4% → 6% | 8 yrs | Medium | Source |
| Newfoundland and Labrador | 2 → 3 | 4% → 6% | 15 yrs | Medium | Source |
| Nova Scotia | 2 → 3 | 4% → 6% | 8 yrs | Medium | Source |
| Nunavut | 2 → 3 | 4% → 6% | 6 yrs | Medium | Source |
| Ontario | 2 → 3 | 4% → 6% | 5 yrs | High | Source |
| Prince Edward Island | 2 → 3 | 4% → 6% | 8 yrs | Medium | Source |
| Quebec | 2 → 3 | 4% → 6% | 3 yrs | High | Source |
| Saskatchewan | 3 → 4 | 5.77% (3/52) → 7.69% (4/52) | 10 yrs | High | Source |
| Northwest Territories | 2 → 3 | 4% → 6% | 5 yrs | Medium | Source |
| Yukon | 2 | 4% | - (flat, no increase) | Medium | Source |
Two provinces where many federally regulated employees also work
Federal FAQ
What is the minimum vacation pay percentage in Federal?
Under Canada Labour Code, vacation pay starts at a minimum of 4% of your gross wages, equal to 2 weeks of vacation time, from your first year of employment. Only a small share of Canadian employees - those working for banks, telecommunications and broadcasting companies, airlines, railways, and interprovincial or international trucking and shipping firms - are federally regulated. If you are not sure whether you are one of them, your employer’s HR team can confirm, or check the province you actually work in instead.
When does vacation pay in Federal increase to 8%?
It increases after 5 years and then 10 years of completed, continuous service, at which point the minimum rises to 8% of your gross wages and 4 weeks of vacation time under the Canada Labour Code. There is a further increase after that - see the calculator above for the exact date it applies to you.
How much vacation time do I get in Federal?
The Canada Labour Code sets a minimum of 2 weeks then 3 weeks then 4 weeks, rising with years of completed service as shown in the calculator above. This is a floor, not a cap - your employer’s policy or employment contract can always offer more than the legal minimum, but not less.
What counts as vacationable earnings in Federal?
Vacation pay is calculated on your gross wages for the year of employment, as defined by the Canada Labour Code. This covers only employees of federally regulated businesses (banks, telecommunications, airlines, interprovincial and international transportation, and a few other sectors) - everyone else follows their province or territory’s employment standards act instead.
Is vacation pay paid out if I quit or am terminated in Federal?
Yes. Any vacation pay you have earned but have not yet been paid must be included in your final pay when your employment with an employer in Federal ends, whether you resign, are laid off, or are terminated. Check the official source above for the exact number of days your employer has to issue that final payment.
Does Federal’s vacation pay rule apply to part-time employees?
Yes. Because vacation pay is a percentage of the wages you actually earned rather than a fixed weekly amount, part-time, casual and seasonal employees in Federal earn it in proportion to their pay, on the same percentage schedule as full-time employees.