Under Ontario's Employment Standards Act (ESA), most dental team members earn two weeks of vacation time and at least 4% vacation pay a year, rising to three weeks and 6% after five years. Vacation must be taken within 10 months of the end of each entitlement year, and the employer must make sure it is. Dentists are exempt from the vacation-with-pay rules, but Ontario lists no such exemption for dental hygienists.
Is every person on your payroll actually going to take the vacation they earned this year? As of October 2026, with the year-end approaching, it is worth checking against the rules. A hygienist who saved days for December, an assistant hired in the spring, a receptionist who prefers to be paid out: each of these situations has a specific answer in Ontario's Your guide to the Employment Standards Act (vacation chapter updated February 5, 2026). This guide walks through those rules for practice owners in Toronto, Mississauga, Markham and across Ontario.
This is general information drawn from the Ontario government's published guide, not legal advice. Your employment contracts may give more than the ESA minimum, and an employment lawyer or the Ministry of Labour, Immigration, Training and Skills Development can address your specific situation.
Who on Your Dental Team Is Covered?
Start here, because the answer is not the same for every role in a dental practice. The Ontario government's page on industry and job exemptions for EMS, healthcare and health professionals (updated March 31, 2026) lists separate rules for dentists and for dental hygienists:
- Dentists and dentistry students are listed as not entitled to vacation with pay, public holidays, minimum wage, overtime and several other ESA standards. Based on that listing, an associate dentist employed by the practice would fall outside the ESA vacation-with-pay rules, leaving their vacation terms to their contract.
- Dental hygienists have one listed special rule: they are not entitled to sick leave, family responsibility leave or bereavement leave if taking the leave would be professional misconduct or abandoning their duty. Vacation with pay is not on that list.
- Other roles such as dental assistants, receptionists and office managers do not appear on that page. If you are unsure whether any role is exempt, Ontario's guide points employers to its special rule tool.
Pro Tip: Pull your staff list this week and mark each person as "ESA vacation rules apply" or "contract only." Dentists' contract terms and your team members' ESA entitlements are different problems, and mixing them up is how vacation errors start.
How Much Vacation Time Does Ontario Require?
The ESA sets two tiers, based on length of employment at the end of each vacation entitlement year:
- Less than five years: two weeks of vacation time per 12-month vacation entitlement year.
- Five or more years: three weeks of vacation time.
Ontario's guide notes that a contract of employment or collective agreement may provide a greater vacation benefit than these minimums.
Entitlement years and stub periods
Ordinarily, the vacation entitlement year is a recurring 12-month period that begins on each employee's date of hire. Many practices find it simpler to run every employee on the same calendar. The ESA allows this: an employer can set an alternative vacation entitlement year, such as January 1 to December 31. When it does, an employee whose hire date falls before the start of that year earns a pro-rated amount of vacation for the gap, which Ontario calls a "stub period."
If your practice uses a calendar-year vacation year, December 31 is the date that matters. Anyone hired partway through 2026 has a stub period ending then, and the vacation earned in it is calculated on a pro-rated basis.
How Is Vacation Pay Calculated?
Vacation pay must be at least 4% of gross wages earned in the vacation entitlement year or stub period for employees with less than five years of employment, and at least 6% for employees with five or more years. Gross wages here exclude vacation pay itself. Ontario's guide gives a worked example: an employee entitled to 4% of $13,050 CAD in wages receives $522.00 CAD in vacation pay.
Vacation pay builds up even before vacation time does. The guide states that employees earn vacation pay as they earn wages, so even an employee who works a single hour is entitled to at least 4% of that hour's wages as vacation pay.
What counts as "wages" for vacation pay
This matters for dental payroll because bonuses and incentives can take many forms. According to Ontario's guide, the wage base for vacation pay includes regular earnings, commissions, bonuses that are non-discretionary or related to hours of work, overtime pay, public holiday pay, termination pay, allowances for room and board, and domestic or sexual violence leave pay.
It does not include tips or gratuities, discretionary bonuses and gifts unrelated to hours of work, production or efficiency (the guide's example is a Christmas bonus unrelated to performance), expenses and travel allowances, living allowances, employer contributions to a benefit plan, payments from a benefit plan such as sick pay, federal Employment Insurance benefits, or severance pay.
Pro Tip: If a hygienist or assistant receives any bonus tied to production, hours or hygiene targets, run it past your bookkeeper before year-end payroll. Under the guide's definitions, a bonus that is non-discretionary or related to hours of work belongs in the vacation pay base, while a discretionary bonus or gift unrelated to hours of work, production or efficiency (the guide's example is a Christmas bonus unrelated to performance) does not.
The five-year step-up
The move from 4% to 6% applies to all wages in the vacation entitlement year in which the employee reaches five years. For practices that pay vacation pay on every cheque, Ontario's guide spells out the consequence: once the employee crosses the five-year mark, the employer owes an additional 2% top-up on wages earned earlier in that same entitlement year. Team members approaching their fifth anniversary are the ones to watch, so check hire dates now.
When Must Vacation Pay Be Paid?
The default rule is a lump sum paid before the employee takes the vacation time earned. Ontario's guide lists four exceptions:
- Vacation taken in periods of less than one week: vacation pay is due on or before the pay day for the period in which the vacation falls.
- Pay-as-you-go: if the employee agrees electronically or in writing, vacation pay can be paid on each pay cheque as it accrues. It must be shown separately from other amounts on the wage statement, or on a separate statement.
- Any time agreed to: with the employee's electronic or written agreement, vacation pay can be paid at any time the employee agrees to.
- Direct deposit: where wages are paid by direct deposit, vacation pay must be paid on or before the pay day for the period in which the vacation falls.
The 10-Month Rule and Year-End Scheduling
Vacation time earned for an entitlement year or stub period must be taken within 10 months after that year or stub period ends. The guide is explicit about whose job this is: the employer has the right to schedule vacation and an obligation to ensure it is scheduled and taken before the 10-month period ends.
There is one important exception. If the deadline comes up while an employee is on an ESA leave, such as pregnancy, parental, sick, family responsibility or bereavement leave, the vacation must be taken when the leave ends or at a later date agreed in writing by the employer and employee. Ontario's guide states that an employee on an ESA leave will not lose any vacation time or vacation pay because of the leave.
How vacation must be blocked
The ESA also controls how vacation time is split. For employees with less than five years, the employer must schedule the year's vacation as a two-week block or two one-week blocks. For employees with five or more years, it must be three weeks together, a two-week and a one-week period, or three one-week periods. Shorter periods, such as single days, are allowed only if the employee makes a written request and the employer agrees electronically or in writing.
Stub periods follow their own rule: if the stub period earns between two and five days, they must be taken consecutively unless the employee requests and the employer agrees, electronically or in writing, to shorter periods; if it earns more than five days, five must be taken consecutively, again unless shorter periods are requested and agreed.
Can an employee "sell back" vacation?
Not on their own. An employee can give up some or all earned vacation time only with the employer's electronic or written agreement and the approval of the Director of Employment Standards. Even then, the guide is clear that employees may give up vacation time but not the right to vacation pay.
Pro Tip: Before November ends, send each ESA-covered team member a one-line note showing their remaining vacation days and the date by which they must be used. Then book those days into the schedule. A practice that discovers unused vacation in August has less room to move than one that plans it in November.
Holidays, Departures and Records
When a public holiday falls during vacation
With Christmas Day, Boxing Day and New Year's Day ahead, this rule will come up. If a public holiday falls during an employee's vacation, the day remains a vacation day. If the employee qualifies for the public holiday, they are entitled either to a substitute day off with public holiday pay, taken within three months (or within 12 months if the employee agrees electronically or in writing), or to public holiday pay without a substitute day off, if the employee agrees electronically or in writing.
When an employee leaves
Departing employees are entitled to vacation pay they have earned and not yet been paid, which can include amounts from previous entitlement periods. The unpaid vacation pay must be paid within seven days of the employment ending or on what would have been the employee's next pay day, whichever is later. Vacation pay is payable on termination pay but not on severance pay.
What records you must keep
Employers must keep records of vacation time earned and not taken before the start of the entitlement year, vacation time earned and taken during the year, and the balance remaining at year-end. They must also record vacation pay earned and paid, and how it was calculated. If an employee has agreed to receive vacation pay on each cheque, the requirement is instead to show vacation pay separately on each wage statement, or on a separate statement, and keep a record of that information. These records must be made no later than seven days after the start of the next vacation entitlement year, or the first pay day after the year or stub period ends, whichever is later.
Employees may request a statement of their vacation records in writing. The employer must provide it no later than seven days after the request or the first pay day after it, whichever is later (with a different deadline for the current entitlement year), and only has to provide it once for each entitlement year or stub period.
A Year-End Vacation Checklist for Your Practice
- Separate dentists (contract terms) from ESA-covered staff, including hygienists.
- Confirm each employee's vacation entitlement year: date of hire or an alternative year such as the calendar year.
- Flag anyone who reaches five years of employment this entitlement year for the 6% rate and any pay-as-you-go top-up.
- Review every bonus paid this year against the guide's definitions of what belongs in the vacation pay base.
- Count unused vacation days and the 10-month deadline for each person, then schedule them.
- Get written agreements on file for pay-as-you-go vacation pay and single-day vacation requests.
- Plan for public holidays that fall during booked vacation in December and January.
- Update vacation records within the ESA deadline once the new entitlement year starts.
Ontario's full vacation chapter includes worked examples for stub periods, part-time employees and terminations, and it is worth reading alongside your payroll provider's year-end checklist. For more practice management guides written for Canadian dental teams, visit EBIKO Dental.
How does your practice handle vacation scheduling around the holidays: a fixed closure, staggered blocks, or first come, first served? Share what has worked for your team.
Sources
- Government of Ontario. Vacation — Your guide to the Employment Standards Act (updated February 5, 2026).
- Government of Ontario. Industries and jobs with exemptions or special rules: EMS, healthcare and health professionals (updated March 31, 2026).
- Government of Ontario. Public holidays — Your guide to the Employment Standards Act.
Frequently Asked Questions
Q: Do dental hygienists in Ontario get ESA vacation pay?
Ontario's special rules page lists only one exemption for dental hygienists: they are not entitled to sick, family responsibility or bereavement leave if taking it would be professional misconduct or abandoning their duty. Vacation with pay is not on that list. Dentists and dentistry students, by contrast, are listed as not entitled to vacation with pay.
Q: Can my Ontario dental practice pay out unused vacation instead of giving time off?
An employee can give up earned vacation time only with the employer's electronic or written agreement and the approval of the Director of Employment Standards. The employee cannot give up vacation pay. Otherwise, vacation must be taken within 10 months after the end of the entitlement year, and the employer must ensure it is, unless the deadline falls during an ESA leave, in which case it is taken when the leave ends or later by written agreement.
Q: What vacation pay percentage applies after five years in Ontario?
Employees with five or more years of employment are entitled to at least 6% of gross wages earned in the vacation entitlement year, plus three weeks of vacation time. Employees with less than five years receive at least 4% and two weeks.