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Overtime Pay in Ontario: The 44-Hour Rule, Averaging Agreements and Banked Time

In Ontario, most employees earn overtime after 44 hours in a work week, at one and a half times their regular rate of pay. There's no daily overtime unless a contract or collective agreement provides it. Employers and employees can agree in writing to average hours over up to four weeks, or to bank overtime as paid time off at one and a half hours for each overtime hour.

Ontario's 44-hour threshold is higher than the 40 hours many people expect, which is why overtime questions come up so often. The rules below come from the province's guide to the Employment Standards Act, 2000 (ESA).

The basic rule

  • Overtime begins after 44 hours in a work week for most employees, whether they're full-time, part-time, students, temporary help agency assignment employees or casual workers.
  • Overtime pay is one and a half times the regular rate, often called time and a half.
  • There's no overtime for a long day on its own. Overtime is calculated weekly, or over a longer period under an averaging agreement.
  • Managers and supervisors don't qualify if the work they do is managerial or supervisory, even if they sometimes do other tasks on an irregular or exceptional basis.

Some jobs are exempt from overtime altogether, and others have a threshold higher than 44 hours. The province's special rule tool lists them by industry. If someone does two kinds of work and at least half of their hours are in a covered job, they qualify for overtime.

How to calculate overtime pay

The ESA guide gives worked examples for three pay types. As of October 2026, these are the figures Ontario uses in its own examples, in Canadian dollars:

Pay typeOntario's exampleOvertime owed
HourlyA regular rate of $25.00 an hour gives an overtime rate of $37.50$37.50 for every hour over 44
Fixed salaryA salary of $950.00 a week for 50 hours: $950.00 divided by 44 gives a regular rate of $21.59 and an overtime rate of $32.396 hours at $32.39 = $194.34, for total pay of $1,144.34
Fluctuating salary$750.00 for a regular 40-hour week gives a regular rate of $18.75 and an overtime rate of $28.13Hours up to 44 at $18.75, then overtime after 44

Here's the sourced insight salaried staff rarely realise: in Ontario a fixed salary is treated as covering only the non-overtime hours up to and including 44 a week. The regular rate is the weekly salary divided by 44, not by 40. Anything over 44 is owed on top of the salary.

If someone does two types of work at different hourly rates, each overtime hour is paid at time and a half of the rate for the work done in that hour. Ontario's example has two overtime hours at $30.00 and two at $37.50, for $135.00 in total.

Averaging agreements

An employer and employee can agree electronically or in writing to average hours over a set period of two or more weeks, up to a maximum of four, for overtime purposes. Overtime is then owed only if the average weekly hours exceed 44. For a four-week period, that means overtime only after 176 hours.

  • Averaging periods can't overlap and must follow one after another without gaps.
  • For non-union employees, the agreement must have an expiry date no more than two years after it takes effect.
  • Neither side can cancel it early unless both agree electronically or in writing.

Banked time instead of overtime pay

Employers and employees can also agree electronically or in writing to paid time off instead of overtime pay, sometimes called banked time or time off in lieu. The rules are specific:

  1. Each hour of overtime earns one and a half hours of paid time off, at the regular rate.
  2. The time off must be taken within three months of the week the overtime was earned, or within 12 months if the employee agrees electronically or in writing.
  3. If the job ends before the time is taken, the employee must be paid overtime pay for those hours, no later than seven days after employment ends or the next regular payday, whichever is later.

For the rest of the province's workplace rules, see our guide to Ontario's Employment Standards Act, and for the hourly floor your regular rate can't fall below, our guide to the Ontario minimum wage.

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Common mistakes

  • Using 40 hours instead of 44 to work out a salaried employee's regular rate.
  • Paying daily overtime as if it were required, then refusing it in a week under 44 hours without a clear contract term.
  • Averaging hours without a signed or electronic agreement, or letting the agreement run past two years.
  • Banking overtime hour for hour instead of at one and a half hours.
  • Forgetting to pay out banked time when someone leaves.

Overtime also interacts with public holidays and vacation. See our guides to statutory holidays in Ontario and vacation pay in Ontario.

The verdict

Ontario's rule is simple at its core: 44 hours a week, then time and a half. The traps are in the details: salaried staff are owed overtime too, averaging and banking need a written or electronic agreement, and banked time is earned at one and a half hours per overtime hour. Get those agreements in writing and track weekly hours, and you'll stay on the right side of the ESA.

Frequently asked questions

When does overtime start in Ontario?

For most employees, after 44 hours in a work week. Some jobs are exempt or have a higher threshold, which Ontario lists in its special rule tool.

Is there daily overtime in Ontario?

No, unless a contract of employment or a collective agreement provides it. Under the ESA, overtime is calculated weekly or over an averaging period.

Do salaried employees get overtime in Ontario?

Yes, unless their job is exempt. A fixed salary covers hours up to and including 44 a week, and hours over 44 are paid at one and a half times the regular rate, worked out by dividing the weekly salary by 44.

How does banked overtime work in Ontario?

With a written or electronic agreement, each overtime hour earns one and a half hours of paid time off, to be taken within three months, or 12 months if the employee agrees.

Published and maintained by the Lilach Bullock team, covering marketing, AI and business growth.
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