Vacation pay is the percentage of earnings an employer must pay employees for vacation time, set by provincial employment standards, commonly 4% or more of gross wages.
Provincial employment standards require employers to provide vacation pay, typically a minimum of 4% of gross earnings (equivalent to two weeks), rising to 6% after a set number of years of service in many provinces. It can be paid out as employees take vacation or accrued and paid on each cheque, depending on the arrangement and provincial rules.
Vacation pay is part of an employee's wages and is subject to normal source deductions. It is a real liability that accrues as employees work, so businesses should track accrued vacation pay rather than treating it as an afterthought at year-end.
An employee earns $50,000 in a year with a 4% vacation entitlement. They are owed $2,000 in vacation pay, either paid as they take time off or accrued and paid out, and it is subject to normal payroll deductions.
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HST combines the 5% federal GST with a provincial component in five participating provinces. For 2026 the combined rates are 13% in Ontario, 15% in New Brunswick, Newfoundland and Labrador, and Prince Edward Island, and 14% in Nova Scotia since 1 April 2025. Elsewhere you charge the 5% GST alone, or GST plus a separate provincial tax. The rate follows the province of supply, not where your business sits.
The GST rate is 5%, unchanged since 1 January 2008 and current for 2025 and 2026. It reaches every province and territory, but in five provinces it is folded into the HST: you charge 13% in Ontario, 15% in New Brunswick, Newfoundland and Labrador and Prince Edward Island, and 14% in Nova Scotia, down from 15% on 1 April 2025. In Alberta, the Northwest Territories, Nunavut and Yukon, 5% applies alone.
Balance owing is the amount left to pay once tax already withheld, instalments paid and refundable credits are subtracted from the total tax calculated for the year. It appears on the return and again on the notice of assessment. For the 2025 tax year the payment deadline was 30 April 2026, including for self-employed filers whose filing deadline was 15 June 2026. Anything unpaid after the due date attracts compound daily interest.
A T4E is the slip Service Canada issues for Employment Insurance and certain related benefits. It shows the total benefits paid, income tax already withheld, any benefits you had to repay and any benefit repayment required because of your income level. Report the amounts on your personal return on the line for Employment Insurance and other benefits, not on the employment income line — EI benefits are taxable but they are not employment income. Keep the slip even where no tax was withheld, because the benefits remain taxable and the CRA already holds a copy.
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Reviewed and fact-checked by Udit Gupta
Ex Big 4 — Ernst & Young, Deloitte · International & cross-border tax specialist · CPA Canada (In-Depth Tax Program) · Chartered accountant, ICAI & MIA
Udit Gupta has over 15 years of experience helping corporations and business owners with corporate structuring, corporate tax filing, bookkeeping, payroll, GST/HST, cross-border tax and CRA representation. Big 4 trained at Ernst & Young and Deloitte, and qualified as a chartered accountant in India and again in Malaysia, he founded his accounting practice in 2014 to serve entrepreneurs, startups and non-resident business owners across Canada. View full member bio.
The Institute of Chartered Accountants of India — member 521458 · Malaysian Institute of Accountants — member CA 44667 · Ex Big 4: Ernst & Young, Deloitte · CPA Canada (In-Depth Tax Program), completed 19 Dec 2023 · In-Depth GST/HST Part I, 12 Jul 2022 · Part II, 5 Jul 2023
Editorial policy. Every page is researched against primary sources — the Income Tax Act, CRA publications and CPA Canada guidance — and every rate or threshold is stated with the tax year it applies to.
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