Severance Pay Calculator Ontario 2026
Use this severance pay calculator Ontario to work out what the Employment Standards Act guarantees you when your job ends — your termination pay, your severance pay, and the total minimum you are owed in 2026.
Last updated: July 2026 · Ontario Ministry of Labour · Employment Standards Act, 2000
Your regular wages for a normal work week, before overtime. Paid hourly? Multiply your hourly rate by your usual weekly hours — $25 an hour over 40 hours is $1,000.
Severance pay (the larger entitlement) only applies at employers with a payroll of $2.5 million or more, or where 50+ employees were let go in six months. Termination pay applies either way.
Termination pay and severance pay are two different things
The single biggest source of confusion in Ontario severance is that the word “severance” gets used for two separate ESA entitlements. Termination pay is compensation for the notice your employer should have given — one week’s pay for each year of service, to a maximum of 8 weeks, owed to nearly anyone employed at least three months. Severance pay is a distinct, additional entitlement of one week per year up to 26 weeks, reserved for long-service employees at larger employers. If you qualify for both, you get both: the calculator adds them into a single total.
Termination pay can be delivered as working notice, as pay in lieu, or a mix — your employer chooses. Severance pay is always a payment. Both are calculated on your regular weekly wages, meaning your normal pay excluding overtime, and both are taxable income in the year you receive them.
How each is calculated
Termination pay follows a fixed schedule based on your length of service — 1 week under a year, then rising one week per year to a maximum of 8 weeks at eight years or more. It is banded, so partial years do not add fractions; someone at 7 years 9 months gets the same 7 weeks as someone at exactly 7 years.
Severance pay is more precise: multiply your regular weekly wage by your years of service including the completed months of any partial year, divided by 12. A worker with 7 completed years and 9 completed months has 7 + 9÷12 = 7.75 weeks of severance. It qualifies only where you have five or more years of service and your employer has a payroll of $2.5 million or more, or severed 50+ employees in a six-month period. The maximum is 26 weeks.
Worked example, straight from the Ministry of Labour: a worker earning $1,000 a week with 7 years 9 months of service at a large employer is entitled to $1,000 × 7.75 = $7,750 in severance pay — on top of 7 weeks ($7,000) of termination pay, for $14,750 in total statutory entitlement.
Why a lawyer may get you more
Everything above is the ESA minimum — the floor your employer cannot go below. Separately, Ontario common law entitles many dismissed employees to reasonable notice, which is frequently far larger than the ESA figure: courts weigh your age, length of service, the type of role and how hard it will be to find comparable work, and awards of several months’ pay are common for long-service or senior employees. You cannot claim common-law notice through the free Ministry of Labour process — it requires a civil claim, usually with an employment lawyer. If your ESA number here feels low relative to a long career or a senior role, that gap is exactly what a lawyer would look at. Many offer a free first consultation.
Frequently Asked Questions
How much severance am I entitled to in Ontario?
Under the ESA, termination pay is one week per year up to 8 weeks, and severance pay — if you have 5+ years at a large employer — is one week per year up to 26 weeks, on top. The calculator above adds both. Common-law notice can be considerably more and is separate from these minimums.
What is the difference between termination pay and severance pay?
Termination pay compensates for missing notice and is owed to most employees with 3+ months of service, capped at 8 weeks. Severance pay is a separate, larger entitlement for long-service employees (5+ years) at employers with a $2.5M payroll or a mass termination, capped at 26 weeks. Qualifying employees receive both.
Does everyone get severance pay?
No. Severance pay specifically requires five or more years of service and an employer with a payroll of at least $2.5 million, or that severed 50+ employees in six months. Many employees receive termination pay but not severance pay. Some workers — for example those dismissed for wilful misconduct — receive neither.
Is severance pay taxable in Ontario?
Yes. Both termination pay and severance pay are taxable income. Depending on how the payment is structured, part of it may be eligible to transfer to an RRSP — worth asking an accountant about, as it can reduce the tax hit in the year you receive it.
Related pages:
📋 Rules verified — Official sources: Ontario — ESA: Severance pay · Ontario — ESA: Termination of employment
⚠️ This is general information, not financial, tax or legal advice. KnowMyGovt is an independent service with no affiliation with or endorsement by the Ontario Ministry of Labour or the Government of Ontario, and is not responsible for decisions you make based on it. For advice on your specific situation, consult an employment lawyer.
