Say an Ontario employee earns $1,200 a week and has six years of service at an employer with a payroll over $2.5 million. Under the Employment Standards Act, that person is owed at least $14,688. The sum covers six weeks of termination pay, vacation pay on it, and six weeks of severance. Put your own details in above.
Two separate payments
The Act sets two minimums. Termination pay stands in for the notice an employer must give. Severance pay is a different amount, meant for long-serving staff at larger employers. Depending on your case, you may be owed one, both or neither.
Termination pay
Notice grows with service. It is one week under one year and two weeks from one to three years, then one more week for each further year, reaching eight weeks at eight years. Without notice, the employer owes your regular weekly wage for those weeks, plus 4% vacation pay on the amount.
Severance pay
Severance needs five years or more on the job. The employer must also have a payroll of $2.5 million or more, or have ended 50 or more jobs within six months because of a permanent closure. The amount is weekly wage times years of service, counting months as fractions, capped at 26 weeks. Partial years count. At six years and nine months the multiplier is 6.75, so a $1,200 weekly wage gives 6.75 times $1,200, which is $8,100. The cap only bites at very long service, since it takes 26 years on the job to reach it at one week per year.
What is not covered
Severance can be lost if you turn down reasonable alternative work, retire on a full pension or are fired for wilful misconduct. Vacation pay goes on top of termination pay, but not severance pay. The calculator follows those rules.
Common law is often higher
A court can award reasonable notice well above the Act’s minimum, looking at age, role, years of service and the job market. You can’t claim under the Act and also sue for wrongful dismissal over the same termination. That choice is a good reason to talk to an employment lawyer early.
Before you sign
Don’t sign a release right away. Ask for time to review the offer, and for the calculation behind it. A lawyer can say whether the package matches what a court might award. Check benefits, pay in lieu of notice and any effect on employment insurance too.
A worked example with numbers
Start with a weekly wage of $1,200 and six years of service. Six weeks of notice means termination pay of $7,200, and 4% vacation pay adds $288. Severance is six weeks, or $7,200, for a total of $14,688. With two and a half years of service and no severance eligibility, the total is $2,496.
Where to go next
A payout counts as income for tax, so the income tax calculator shows the effect. Later benefits are covered by the employment insurance calculator. For the months without work, try the monthly budget calculator. Also ask, in writing, what else is owed: unpaid wages, earned vacation pay and holiday pay. Benefits should continue through the notice period, even when the employer pays in place of notice. Keep every letter and email about the termination.
Frequently asked questions
How much severance am I owed in Ontario?
Under the Act, one week of pay per year of service, up to 26 weeks, if you qualify.
Who qualifies for severance pay?
Employees with five years or more of service at an employer with a $2.5 million payroll or a mass termination.
How much notice must an employer give?
From one week up to eight weeks, based on years of service.
Is vacation pay added to severance?
No. It is added to termination pay only.
Can I get more than the Act's minimum?
Yes. Courts can award reasonable notice above the minimum.
Is severance taxable?
Yes. It is taxed as income.
Sources and updates
Last reviewed: . Full disclaimer. How we build calculators. Editorial policy.
Estimate only. This calculator gives general information for planning. It is not tax, legal or financial advice, and it is not affiliated with the City of Toronto, MPAC or the Canada Revenue Agency. Results depend on the numbers you enter and may differ from official amounts. Check official sources or a qualified professional before you decide.