Termination pay & Severance calculator
Calculate the statutory termination notice and severance pay you owe an employee, by jurisdiction, salary and years of service.
- 14 jurisdictions modelled
- ON & Federal severance built in
- Latest legislation
How it works
Two entitlements
When you end an employee’s employment without cause in Canada, two separate legislated entitlements can apply. The most common mistake employers make is confusing “severance” with “termination pay”: they’re two separate payments with two sets of rules, and getting either wrong creates real liability. Termination pay is paid during a notice period, and applies to all workers across all provinces. This page deliberately sticks to statutory rules and legislated calculations.
Termination notice / pay in lieu
The statutory floor you must pay. Applies in every province and territory, scaled to the employee’s length of service. This is what “notice period” rules refer to.
Statutory severance pay
A separate, additional payment you may owe on top of termination pay, not a bigger notice period. In Canada it’s only legislated in Ontario and for federally-regulated employers, and only above certain tenure and employer-size thresholds.
Termination notice by jurisdiction
See exactly how much notice you owe at any point in an employee’s tenure, and compare provinces side by side at a glance.
| Jurisdiction | 3 mo | 1 yr | 3 yrs | 5 yrs | 8 yrs | 10 yrs | 15 yrs |
|---|
- Federal (Canada Labour Code): graduated scale effective Feb 1, 2024, replacing the old flat 2-week rule.
Statutory severance pay eligibility
| Jurisdiction | Minimum service | Employer / trigger condition | Formula |
|---|---|---|---|
| Ontario | 5+ years continuous or not, active or not |
Payroll ≥ $2.5M globally, OR severed 50+ employees in a rolling 6-month period due to permanent full/partial closure | 1 week’s regular wages per completed year of service, max 26 weeks |
| Federal (CLC) | 12+ consecutive months | No minimum | Greater of 2 days’ wages per completed year of service, or 5 days’ wages |
| All other provinces & territories | N/A | N/A | Not legislated. Terminated employees receive termination notice/pay in lieu only. See table above. |
Ontario source: ontario.ca’s guide to the ESA: severance pay. Federal source: Canada Labour Code, section 235, on the Justice Laws Website.
Common questions
Termination pay & Severance in Canada FAQ
Termination pay, also called notice, or pay in lieu of notice, is the minimum you must pay an employee when ending their employment without cause. It applies in every Canadian province and territory, scaled to their length of service. Severance pay is a separate, additional payment on top of termination pay. In Canada you only owe it in Ontario and if you’re a federally-regulated employer. It is never a substitute for termination pay.
You owe an Ontario employee statutory severance pay if they’ve worked for you for 5 or more years (continuous or not, active or not), and your business either has a global payroll of $2.5 million or more, or you severed the employment of 50 or more employees within a 6-month period because all or part of the business permanently closed. See ontario.ca’s ESA severance guide.
No, this is the most common misconception. Only Ontario (under the ESA) and federally-regulated employers (under the Canada Labour Code) have a statutory severance pay requirement. If you operate anywhere else, you only owe termination notice/pay in lieu. See the jurisdiction table above.
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