Ontario Severance Pay Calculator

Free calculator for Ontario, Alberta and all Canadian provinces. Estimate your statutory ESA and common law severance entitlements. Updated with 2025 employment standards.

Ontario ESA Common Law Alberta All Provinces

Ontario Employment Standards Act (ESA) Severance Calculator

Calculate your minimum statutory severance entitlement under Ontario's Employment Standards Act, 2000.

Note: This calculator computes ESA minimum entitlements. Common law entitlements are typically 2-3 times higher.

Common Law Reasonable Notice Calculator

Estimate your common law severance entitlement based on Canadian court precedents (typically much higher than ESA minimums).

Important: Common law entitlements vary significantly based on individual circumstances. This is an estimate only. Consult an employment lawyer for personalized advice.

Alberta Employment Standards Code Calculator

Calculate your termination pay under Alberta's Employment Standards Code. Alberta provides termination notice/pay but no statutory severance.

Alberta Note: Alberta does not have statutory severance pay like Ontario. This calculates termination notice/pay only. Common law entitlements may be significantly higher.

Compare Severance Across Canadian Provinces

See how statutory termination and severance requirements differ across Canada.

Understanding Severance Pay in Canada

What is Severance Pay?

Severance pay is compensation provided to employees when their employment is terminated. In Canada, there are two main types of severance entitlements:

Ontario Severance Pay (ESA) - Key Rules

Under Ontario's Employment Standards Act, 2000, severance pay has specific eligibility requirements and calculation methods:

Critical Distinction: Ontario's ESA provides BOTH termination pay AND severance pay. These are separate entitlements. Many employees mistakenly believe ESA minimums are their only entitlement, when common law typically provides much more.

Alberta Severance Pay - Key Rules

Alberta's Employment Standards Code provides termination notice requirements but does NOT have statutory severance pay like Ontario:

Common Law Reasonable Notice - The Bardal Factors

Canadian courts determine common law severance using the Bardal factors, established in the 1960 case Bardal v. The Globe & Mail Ltd. These factors typically result in entitlements much higher than statutory minimums:

Important: Common law entitlements typically range from 2 to 24 months of pay, with the average around 6-12 months. This is substantially more than ESA minimums. Most wrongful dismissal cases settle based on common law, not ESA minimums.

ESA vs Common Law - Which Applies?

This is one of the most confusing aspects of Canadian employment law:

What's Included in Severance Calculations?

When calculating severance pay, the following are typically included in your compensation:

When Severance is NOT Owed

There are specific situations where an employer doesn't owe severance pay:

Constructive Dismissal

Constructive dismissal occurs when an employer makes a fundamental change to your employment without your agreement, essentially forcing you to quit:

Severance Requirements by Canadian Province

Statutory termination and severance requirements vary significantly across Canada. Here's what each province requires:

Ontario

Termination Pay: 1 week (under 1 year) up to 8 weeks (8+ years)

Severance Pay: 1 week per year of service (max 26 weeks) if 5+ years AND employer payroll $2.5M+

Notice: Working notice or pay in lieu

Both Required: Eligible employees receive BOTH termination and severance pay

Alberta

Termination Notice: 1 week (3+ months) up to 8 weeks (10+ years)

No Statutory Severance: Only termination notice/pay required

Common Law: Most employees entitled to more under common law

Group Termination: Additional notice if 50+ employees affected

British Columbia

Notice: 1 week (3-12 months) up to 8 weeks (8+ years)

Compensation for Length of Service: 1 week per year after 3 years (not true severance)

Combined Maximum: Up to 8 weeks notice plus compensation

No Separate Severance: BC combines notice and service compensation

Quebec

Notice: 1 week (3-12 months) up to 8 weeks (10+ years)

No Statutory Severance: Only notice required under provincial law

Federal Sector: Federal employees in Quebec follow Canada Labour Code

Civil Code: Common law principles apply through Quebec Civil Code

Manitoba

Notice: 1 pay period (under 1 year) up to 8 weeks (10+ years)

No Statutory Severance: Only termination notice required

Group Termination: 10+ employees get additional notice

Common Law: Employees can pursue reasonable notice damages

Saskatchewan

Notice: 1 week (3-12 months) up to 8 weeks (10+ years)

No Statutory Severance: Only notice provisions

Pay in Lieu: Can provide termination pay instead of notice

Common Law: Court-determined reasonable notice often higher

Nova Scotia

Notice: 1 week (3+ months) up to 8 weeks (10+ years)

10+ Years Bonus: Additional 2 days per year over 10 years (max 8 additional weeks)

Long Service: Up to 16 weeks total for very long-tenured employees

Unique System: NS provides more for long-service employees

New Brunswick

Notice: 1 week (6+ months) up to 8 weeks (10+ years)

No Statutory Severance: Only notice required

Group Termination: 10+ employees require additional notice

Common Law: Reasonable notice principles apply

Prince Edward Island

Notice: 1 week (6+ months) up to 8 weeks (15+ years)

Requires 6 Months: Must work 6+ months to qualify

No Statutory Severance: Only notice provisions

Small Province: Limited case law on common law damages

Newfoundland & Labrador

Notice: 1 week (3+ months) up to 6 weeks (12+ years)

Lower Maximum: Only 6 weeks maximum (lowest in Canada)

No Statutory Severance: Only notice required

Common Law: Employees often receive more through courts

Federal Jurisdiction

Canada Labour Code: Applies to banks, airlines, interprovincial transport, telecoms

Notice: 2 weeks minimum, up to 8 weeks for 10+ years

Severance Pay: 2 days per year of service (12+ months AND company employs 20+)

Unique Rules: Different from any province

Key Differences Across Provinces

Province Maximum Statutory Notice Separate Severance Pay? Eligibility Start
Ontario 8 weeks + up to 26 weeks severance Yes (5+ years, $2.5M payroll) Immediate
Alberta 8 weeks No 3 months
British Columbia 8 weeks + compensation Compensation for service (not traditional severance) 3 months
Quebec 8 weeks No 3 months
Manitoba 8 weeks No 1 month
Saskatchewan 8 weeks No 13 weeks
Nova Scotia 8 weeks + long service bonus (max 16 total) No (but long service bonus) 3 months
New Brunswick 8 weeks No 6 months
PEI 8 weeks No 6 months
Newfoundland 6 weeks (lowest) No 3 months
Federal (CLC) 8 weeks Yes (2 days/year if 12+ months) 3 months

Real-World Severance Examples

Here are practical examples showing the difference between ESA minimums and common law entitlements:

Example 1: Mid-Career Manager in Ontario

Example 2: Young Professional in Alberta

Example 3: Long-Service Executive in Ontario

Example 4: Entry-Level Worker in British Columbia

Example 5: Specialized Professional in Alberta

Takeaway: In almost every scenario, common law entitlements significantly exceed ESA minimums. If you've received a severance offer that's only ESA minimums, you should consult an employment lawyer before accepting.

Frequently Asked Questions

How much severance pay am I entitled to in Ontario?
In Ontario, you're entitled to both termination pay (1 week for under 1 year up to 8 weeks for 8+ years) AND severance pay if you meet the criteria (5+ years service AND employer has $2.5M+ payroll): 1 week per year of service up to 26 weeks maximum. However, common law entitlements are typically much higher - usually 2-24 months of pay depending on age, position, and length of service. Most wrongful dismissal settlements are based on common law, not ESA minimums.
What is the difference between termination pay and severance pay in Ontario?
In Ontario, these are two separate entitlements under the ESA. Termination pay (1-8 weeks) replaces working notice and is owed to nearly all employees. Severance pay (up to 26 weeks) is an additional payment for longer-tenured employees (5+ years) working for larger employers ($2.5M+ payroll). You can receive BOTH if you meet the severance pay criteria. For example, an employee with 10 years service would get 8 weeks termination pay PLUS 10 weeks severance pay = 18 weeks total under ESA minimums.
How is severance pay calculated in Alberta?
Alberta does not have statutory severance pay like Ontario. Alberta only requires termination notice: 1 week for 3+ months of service, increasing to 8 weeks for 10+ years. However, Alberta employees are still entitled to common law reasonable notice, which is typically much higher than the ESA minimum. Common law severance in Alberta follows the same Bardal factors as other provinces, considering age, length of service, position, and job availability. Most Alberta employees receive 2-24 months of pay as common law damages.
What is common law severance pay?
Common law severance (also called "reasonable notice") is the compensation Canadian courts award for wrongful dismissal, based on how long it would reasonably take you to find comparable employment. Courts consider the Bardal factors: age (older workers get more), length of service (longer tenure = more notice), character of employment (senior/specialized roles get more), and availability of similar work. Common law entitlements typically range from 2-24 months of full compensation (salary, bonus, benefits, pension contributions). This is usually 2-4 times higher than provincial ESA minimums.
Can my employer limit me to ESA minimums?
Yes, BUT only if your employment contract contains a properly drafted termination clause that limits your entitlements to ESA minimums. Many employment contracts attempting to limit severance are unenforceable due to technical defects, such as: failing to comply with ESA minimum standards, ambiguous wording, or being introduced after you started work without fresh consideration. Courts strictly interpret termination clauses against employers. If your contract is found unenforceable, you're entitled to full common law damages. Never assume your contract is valid - consult an employment lawyer if you receive a low severance offer.
Do I get severance pay if I'm fired for cause?
No, if you're dismissed for "just cause," you're not entitled to any severance, termination pay, or notice under either ESA minimums or common law. However, the legal standard for just cause is very high - it requires serious misconduct such as theft, fraud, violence, or willful disobedience after warnings. Poor performance, personality conflicts, or minor rule violations typically don't constitute just cause. Many employers claim "just cause" when they don't actually have it. If you've been fired for alleged cause, consult an employment lawyer immediately - you may still be entitled to full severance.
How long do I have to sue for wrongful dismissal?
In most Canadian provinces, you have 2 years from the date of termination to commence a lawsuit for wrongful dismissal (this is the limitation period). However, you should consult an employment lawyer as soon as possible after termination, ideally before signing any severance release. Once you sign a release, you typically waive your right to sue. Don't wait until the last minute - evidence becomes stale, witnesses' memories fade, and you may lose negotiating leverage. Most employment lawyers offer free initial consultations and work on contingency (percentage of recovery) for wrongful dismissal cases.
What is constructive dismissal?
Constructive dismissal occurs when your employer makes a fundamental, unilateral change to your employment without your consent, essentially forcing you to resign. Examples include: substantial pay cut, significant demotion, forced relocation, hostile work environment, or extended layoff beyond legal limits. If you can prove constructive dismissal, you're entitled to severance as if you were terminated without cause. However, proving constructive dismissal is complex - you must either: (1) leave immediately and sue, or (2) continue working while objecting in writing and eventually sue. Consult an employment lawyer before resigning, as mistakes can cost you your severance entitlement.
Should I sign my severance agreement?
Never sign a severance agreement without first consulting an employment lawyer, especially if the offer seems low. Severance agreements contain releases that permanently waive your right to sue for more money. Many employers offer ESA minimums hoping you'll sign quickly. An employment lawyer can: review your contract for enforceability, calculate your common law entitlement, negotiate a better package, and advise on tax planning. Most employment lawyers offer free initial consultations and work on contingency, meaning they only get paid if they improve your severance package. The cost of getting legal advice is typically far less than leaving money on the table by signing a lowball offer.
What if my employer says the severance offer is "final"?
When an employer says a severance offer is "final" or "non-negotiable," they're almost always bluffing. Severance is nearly always negotiable, especially if you have a lawyer. Employers know that fighting a wrongful dismissal lawsuit is expensive (legal fees often exceed $20,000-$50,000) and risky. They'd rather settle for a reasonable amount than go to court. Having a lawyer send a demand letter often results in a significantly improved offer. Don't be intimidated by deadlines or "take it or leave it" language. You have 2 years to sue (in most provinces), so there's no legitimate reason you must sign within days. Take time to get legal advice.
Are bonuses and benefits included in severance?
Yes, severance should include all components of your compensation package, not just base salary. This includes: regular bonuses (averaged over recent years), commission income, car allowance or company vehicle, benefits (health, dental, life insurance), pension contributions, stock option vesting, and any other regular compensation. For common law severance, your full compensation package continues for the entire notice period. For example, if you're entitled to 12 months' notice and you normally received $80,000 salary plus $20,000 bonus plus $5,000 benefits, your severance should be approximately $105,000, not just $80,000.
Do I have to pay back severance if I find a new job?
This depends on how your severance is structured. If you receive a "lump sum" payment, you generally keep all of it even if you find new work immediately. However, if you're on "salary continuance" (receiving pay over time as if still employed), you have a duty to mitigate by seeking comparable employment. If you find work during the notice period, your former employer may be able to reduce or stop payments. Many severance agreements require you to report new employment. Lump sum payments are generally preferable as they provide certainty. Make sure you understand which structure you're receiving before signing any severance agreement.
Can I collect EI while receiving severance pay?
Generally, no - not immediately. Service Canada treats most severance pay as "earnings" which delays your EI eligibility. The severance amount is allocated over the number of weeks it represents, creating a waiting period. For example, if you receive 12 weeks of severance, you cannot collect EI for approximately 12 weeks. However, the rules are complex and depend on how the severance is characterized (retiring allowance vs. payment in lieu of notice). After the allocation period ends, you can collect EI for the remaining weeks of your benefit period. Consult Service Canada or an employment lawyer about the interaction between your specific severance package and EI eligibility.
How is severance pay taxed in Canada?
Severance pay is fully taxable as income in the year you receive it. However, there are important considerations: (1) Your employer will withhold tax at source, often at a higher rate for lump sums. (2) You may be pushed into a higher tax bracket if you receive a large lump sum. (3) You might be able to transfer part of severance into your RRSP if you have contribution room, deferring tax. (4) If your severance spans a calendar year-end, you might be able to split it between tax years. (5) Retiring allowances (portion attributable to pre-1996 service) may be eligible for special RRSP contribution room. Consult a tax professional or accountant to optimize the tax treatment of your severance package.
What should I negotiate for besides money?
Beyond the dollar amount, consider negotiating: (1) Job search support or outplacement services. (2) Extension of benefits coverage (health, dental) beyond the notice period. (3) Positive reference letter or agreed-upon reference responses. (4) Return of personal property or work portfolio samples. (5) Non-compete or non-solicitation clause removal. (6) Payment timing (lump sum vs. salary continuance for EI purposes). (7) RRSP contribution room for retiring allowance. (8) Vacation payout calculation method. (9) Neutral Record of Employment (ROE) coding. (10) Confidentiality terms that protect both parties. An experienced employment lawyer can advise on which non-monetary terms are worth negotiating in your situation.
Can my employer terminate me without any severance?
Your employer can only terminate you without severance in these specific circumstances: (1) Just cause dismissal (serious misconduct like theft, fraud, violence, or willful disobedience after warnings - the bar is very high). (2) You've worked less than 3 months (in most provinces, no notice is required for probationary employees). (3) The employment relationship is frustrated (becomes impossible, such as permanent disability preventing work). (4) You're on a true fixed-term contract that expires naturally (though even these often result in common law entitlements if renewed repeatedly). In all other cases, you're entitled to at least ESA minimum notice/pay, and usually common law damages. If your employer claims you're not entitled to any severance, consult an employment lawyer immediately.
What's the average severance package in Canada?
There's no single "average" as severance varies dramatically based on individual circumstances. However, general patterns: ESA minimums typically provide 2-8 weeks in most provinces, sometimes up to 34 weeks in Ontario (8 weeks termination + 26 weeks severance). Common law awards typically range from 2-24 months, with the median around 6-8 months for mid-career employees. Studies show: employees under 30 average 2-4 months, employees 30-45 average 6-10 months, employees 45-55 average 10-15 months, and employees 55+ with long service can receive 18-24 months. Executives and specialized professionals often receive higher amounts. The key takeaway: if you're offered only ESA minimums and you've worked there for years, you're almost certainly entitled to significantly more.
Can I negotiate severance if I'm still employed?
Generally, no - you cannot negotiate severance while still employed, because you haven't been terminated yet. However, you can negotiate stronger terms in your employment contract BEFORE you start or when you're promoted. A well-drafted employment contract can include: (1) Defined notice periods (e.g., "12 months notice regardless of length of service"). (2) Continuation of bonuses during notice period. (3) Enhanced severance formulas. (4) Change of control provisions (extra severance if company is sold). (5) Golden parachute clauses for executives. Once you're already employed, it's very difficult to renegotiate these terms unless you're getting a promotion and can leverage it. If you're being recruited for a new job, negotiate strong severance terms upfront - it's much easier than fighting for them later.
What happens if my employer goes bankrupt?
If your employer declares bankruptcy, you become an unsecured creditor for unpaid wages and severance. However, the federal Wage Earner Protection Program (WEPP) provides some protection: you can claim up to $8,173 (2025 amount, indexed annually) for unpaid wages and vacation pay, plus up to $8,173 for severance/termination pay. To claim WEPP benefits, you must file a claim with Service Canada within 56 days of the bankruptcy or receivership. Beyond WEPP limits, you file a claim with the bankruptcy trustee, but recovery is uncertain as you're an unsecured creditor behind secured creditors and government taxes. The lesson: if you notice signs your employer is in financial trouble, consult an employment lawyer about your options before they file for bankruptcy protection.
Does COVID-19 or pandemic layoff affect my severance?
Pandemic-related issues have created unique severance situations. Key points: (1) Temporary layoffs extended by emergency legislation during COVID may not be constructive dismissal if within statutory limits. (2) Permanent terminations during/after COVID are still subject to normal severance rules. (3) Economic downturn is NOT just cause for dismissal without severance. (4) "Frustration of contract" was rarely accepted as a defense during COVID. (5) If you were temporarily laid off and never recalled, you may have been constructively dismissed. (6) Work-from-home disputes generally don't justify cause dismissals. Most COVID-related wrongful dismissal claims have been successful, with courts rejecting employer arguments that the pandemic excused severance obligations. If you were let go during the pandemic and received minimal severance, you may still have a claim.

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