Ontario Severance Pay Calculator

How severance and termination pay work in Ontario

When an employer ends your employment without cause, you may be entitled to compensation from up to three sources. They are separate, and you can be entitled to more than one.

1. ESA termination pay

Under the Ontario Employment Standards Act (ESA), most employees who have worked for an employer for three months or more are entitled to written notice of termination, or pay in place of notice. The minimum depends on your length of service:

• 3 months to less than 1 year: 1 week
• 1 year to less than 3 years: 2 weeks
• 3 years: 3 weeks, increasing by 1 week for each additional year
• 8 years or more: 8 weeks (the maximum)

There are exceptions, so check the Ontario government's guide to termination of employment.

2. ESA severance pay

Severance pay is separate from termination pay. An employee generally qualifies if they have worked for the employer for five years or more and the employer has an Ontario payroll of $2.5 million or more (or the termination is part of certain mass terminations). It is one week of regular wages for each year of service, with a pro-rated amount for part of a year, up to a maximum of 26 weeks. See the Ontario government's guide to severance pay.

3. Common law reasonable notice

Outside the ESA, the courts can award reasonable notice of termination, which is often more than the ESA minimum. There is no formula. Courts look at factors such as the character of the employment, length of service, the employee's age and the availability of similar employment. A valid termination clause in your employment contract may limit your entitlement to the ESA minimums, and some clauses are not enforceable. A lawyer can review yours.

What can change the result

• Termination for cause. The bar for just cause is high, and an employer's claim of cause can be challenged.
• Your employment contract. The wording of the termination clause matters.
• Benefits and bonuses. Compensation during the notice period can include benefits, bonuses and other entitlements, not only base pay.
• Looking for new work. Employees generally have a duty to take reasonable steps to find new work.
• Release terms. Signing a release usually ends your right to claim more.
• Federally regulated employers. Banks, telecommunications companies, airlines and some other employers fall under the Canada Labour Code instead of the ESA. See the Government of Canada's termination guide.
• Unionized employees. Your collective agreement may set different rules.

What to do if you have been terminated or offered a package

1. Do not sign a severance agreement or release right away. Ask how long you have to respond.
2. Keep your employment contract, termination letter, pay stubs, benefit information and any emails about your job.
3. Write down your start date, role, pay, bonuses and benefits, and how your employment ended.
4. Consider getting legal advice before you sign. Our severance package review explains how an offer compares with your rights.
5. Apply for Employment Insurance and ask for your Record of Employment.

Frequently asked questions

How is severance pay calculated in Ontario?

There is no single formula. ESA termination pay is a set number of weeks based on years of service. ESA severance pay applies to some employees with five or more years of service. Common law reasonable notice depends on the facts. The calculator above gives a general estimate, and a lawyer can explain how the rules apply to you.

Am I entitled to severance if I was fired?

It depends on why you were let go. If an employer proves just cause, notice and severance may not be owed. If there was no cause, you may be entitled to termination pay and possibly severance pay under the ESA, and to reasonable notice at common law.

Can I get more than the ESA minimum?

Often yes, unless your employment contract has a valid clause limiting you to the minimums. Whether a clause is valid is a legal question that depends on its wording.

Does severance pay count if I resign?

Usually not, but in some situations a resignation can be treated as a termination, for example constructive dismissal where your job has been substantially changed. Seek advice before you resign.

Should I have a lawyer review my severance offer?

A lawyer can compare the offer with your entitlements and explain your options before you sign a release. Our severance package review starts with a free initial consultation.

Does this calculator work for federal employees or union members?

It is designed around Ontario's ESA and common law. Federally regulated employees and union members may have different rules.

This page provides general information and estimates, not legal advice. Reading it or using the calculator does not create a lawyer-client relationship. Legal services are provided by lawyers licensed by the Law Society of Ontario. Information about the law was prepared from the sources linked above and may change. Outcomes depend on the facts of each case.