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Note: I'm making this company as if it were located in Ontario, Canada. So all the proper rules and regulations of that region would apply to this company.

I'm currently using the software Quickbooks to set up a mock company and figure out how to pay employees that are commission only. When I create a new employee in the company I select the commission-only option for payment which is what I want. But after selecting this option the employee's vacation pay policy becomes this:

As a commission-only employee, John does not accrue vacation or sick time. Any vacation or sick time policies you've set up do not apply to John.

I was under the impression that ALL employees have to be paid a minimum of 4% vacation pay. After looking on some of the government's website regarding vacation pay and commissions, I can't seem to find any mention of an exemption for commission only employees. Thus contradicting what the Quickbooks software is telling me.

Therefore my question is:

Do commission only employees need to be paid vacation pay?

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I am not a lawyer. I am not your lawyer.

The Labour Program has issued an interpretation on the definition of "wages", and specifically includes commission.

In section 166:

“wages”
« salaire »
“wages” includes every form of remuneration for work performed but does not include tips and other gratuities;

and in Section 183:

“vacation pay”
« indemnité de congé annuel »
“vacation pay” means four per cent or, after six consecutive years of employment by one employer, six per cent of the wages of an employee during the year of employment in respect of which the employee is entitled to the vacation;

And assuming that the employer and employee are, in fact, in an employee-employer relationship, it is likely that he/she will be entitled to 4% of the wages during the year of employment, including commission.

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  • Okay, that makes sense (and is probably correct) but do you have any idea why the software tells me what it does? Also I'm unable to find any option to actually pay the 4% to commission only employees, but if I make the employee "Salary/Hourly" the vacation pay is automatically tacked on. I think I'm going to phone customer service to sort this all out. Thank you. – Paul Warnick Jun 24 '15 at 11:19
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    Calling customer service is probably your best bet. It could be an oversight on their part, or they might be making an assumption that you don't know about. – jimsug Jun 24 '15 at 12:01
  • But I've just noticed that this is vacation time as opposed to vacation pay. Could that be the reason? The devil, after all, is in the details. – jimsug Jun 24 '15 at 12:51
  • See I had that same question as well, but if you switch the employee to salary/hourly that same vacation policy changes from "time" to "4% paid every pay period", so I was assuming it was vacation "pay" not time. But it's still a question I'm going to ask customer support. Thank you for pay attention :) – Paul Warnick Jun 24 '15 at 13:18

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