In BC, employees earn vacation pay of 4% of their total wages once they’ve worked 5 calendar days, rising to 6% after 5 consecutive years with you. Vacation pay must be paid at least 7 days before the employee’s vacation starts, or on every pay cheque if you both agree in writing. When someone quits or is let go, all unpaid vacation pay must be paid out within 48 hours (if you ended it) or 6 days (if they quit).
On this page
- How Much Vacation Pay Do BC Employees Get? 4% and 6% Explained
- Vacation Time vs Vacation Pay
- What Counts as Wages in the Calculation (Including Vacation Pay on Vacation Pay)
- Vacation Pay Calculation Examples (Hourly, Salaried and Commission)
- When Vacation Pay Must Be Paid (Including on Every Cheque)
- Vacation Pay When an Employee Quits or Is Terminated
- FAQ: Vacation Pay in BC
- Get Your BC Payroll Done Right
How Much Vacation Pay Do BC Employees Get? 4% and 6% Explained
| Length of employment | Vacation pay | Vacation time |
| After 5 calendar days | 4% of total wages | Earning toward time off |
| After 12 consecutive months | 4% of total wages | 2 weeks |
| After 5 consecutive years | 6% of total wages | 3 weeks |
These are minimums. You can always give more.

Vacation Time vs Vacation Pay
They’re two separate entitlements, and mixing them up is where most mistakes happen.
| Â | Vacation pay | Vacation time |
| What it is | Money (4% or 6% of wages) | Days off work |
| When it starts | After 5 calendar days of employment | After 12 months of employment |
| Can it be paid on every cheque? | Yes, with written agreement | No. The time off still has to be given |
| Can the employee skip it? | No | No. It must be taken within 12 months of earning it |
So even if you pay 4% on every cheque, you still have to let the employee take their 2 weeks off. That time off will just be unpaid, because they’ve already received the money.
What Counts as Wages in the Calculation (Including Vacation Pay on Vacation Pay)
Vacation pay is calculated on total wages earned in the previous year of employment.
Include:
- Regular wages and salary
- Overtime pay
- Statutory holiday pay
- Commissions and non-discretionary bonuses (bonuses tied to hours, production or efficiency)
- Vacation pay itself. In BC, vacation pay received last year counts as wages this year, so you pay vacation pay on vacation pay.
Don’t include:
- Tips and gratuities
- Discretionary bonuses (true gifts not tied to performance)
- Expense reimbursements and allowances
Easy fix for “vacation pay on vacation pay”: If you pay vacation pay on every cheque, it’s automatically included in next year’s wage base. If you pay it once a year, make sure your payroll software includes last year’s vacation pay in the base.

Vacation Pay Calculation Examples (Hourly, Salaried and Commission)
Hourly employee, 2nd year
Jason earned $42,000 in his first year, including overtime and stat pay.
$42,000 × 4% = $1,680 vacation pay
Salaried employee, 6th year
Priya earns $78,000 a year and has been with you 6 years.
$78,000 × 6% = $4,680 vacation pay (about 3 weeks of salary)
For salaried staff, the easiest way to handle it is to keep paying their normal salary while they’re on vacation. That’s equivalent to the 6% as long as their pay didn’t include large extra amounts like overtime or commissions.
Commission employee
Daniel earned $30,000 base + $25,000 commission = $55,000.
$55,000 × 4% = $2,200 vacation pay
Paying him only his base salary during vacation would underpay him, because commission counts as wages.
Paid on each cheque
Part-time employee earning $800 per pay period:
$800 × 4% = $32 vacation pay on each cheque. Show it as a separate line on the pay stub.
When Vacation Pay Must Be Paid (Including on Every Cheque)
You have two options:
- At least 7 days before the employee’s scheduled vacation, or
- On every regular pay day, if the employer and employee agree in writing (or a collective agreement allows it).
Common for part-time, casual and seasonal staff. Keep the signed agreement in the employee file.
Vacation time must be taken within 12 months after the employee becomes entitled to it. You can’t just pay out vacation time instead of letting them take it, and an employee can’t waive it.

Vacation Pay When an Employee Quits or Is Terminated
All vacation pay earned but not yet paid must be included in the final pay:
| Situation | Final pay (including vacation pay) due within |
| You terminate the employee | 48 hours |
| Employee quits | 6 days after their last day |
What’s owed: 4% (or 6%) of all wages earned since the vacation pay was last paid, including any untaken vacation from the previous year.
If you pay vacation pay on every cheque, there’s usually nothing extra owing at the end. Do a quick check anyway.
Read more: How to handle termination payroll in Canada · Record of Employment (ROE) guide
FAQ: Vacation Pay in BC
Do part-time employees get vacation pay in BC?
Yes. They earn the same 4% or 6% on their wages from day 5.
Is vacation pay taxable?
Yes. It’s employment income, so you deduct income tax, CPP and EI from it like regular pay.
Can an employee cash out their vacation instead of taking time off?
The time off has to be given, but you can pay the vacation pay on every cheque by written agreement. Many employers also let employees carry vacation forward by written request.
Does vacation pay go up exactly at 5 years?
Yes. Once the employee completes 5 consecutive years, they’re entitled to 6% vacation pay and 3 weeks off going forward.
Do I pay vacation pay on overtime in BC?
Yes. In BC, overtime is part of the wages that vacation pay is calculated on. (Alberta is different. See our Alberta vacation pay guide.)
What if I didn’t pay vacation pay to a past employee?
The employee can make a claim with the Employment Standards Branch. Pay what’s owed as soon as you notice it, and correct the ROE if needed.
Get Your BC Payroll Done Right



