Frequently Asked Questions

Severance pay is a form of compensation under the Ontario Employment Standards Act, 2000, paid to eligible employees whose employment is severed. It recognizes long service and the loss of accumulated job benefits. It is calculated as one week of regular wages per year of service, capped at 26 weeks.

Severance pay is distinct from termination pay, which compensates for lack of proper notice. An employee may be entitled to both.

Severance pay = number of years of service (including partial years) × your weekly regular wage, up to a maximum of 26 weeks.

Only base wages count toward the weekly regular wage. Overtime pay, discretionary bonuses, performance bonuses, commissions, vacation pay loading, benefit valuations, allowances, and tips are all excluded.

If you are paid an annual salary, your weekly wage = annual salary ÷ 52. If you are paid weekly, your regular wage is used directly.

No. These are two separate ESA entitlements:

• Severance pay compensates for long service when employer thresholds are met. Maximum: 26 weeks of regular wages.
• Termination pay compensates for lack of proper written notice. It ranges from 1 to 8 weeks depending on length of service.

An employee who is terminated without proper notice may be entitled to both termination pay and severance pay. These are calculated separately.

The ESA caps severance pay at 26 weeks of regular wages. Even if you have more than 26 years of service, the maximum severance entitlement is 26 weeks. This cap is set by the Employment Standards Act, 2000, Part XV.

Yes. To qualify for ESA severance pay, your employer must have a total Ontario payroll of $2.5 million or more, or have severed 50 or more employees within a 6-month period. If neither condition is met, you are not eligible for statutory severance pay — even with 5+ years of service.

This is one of the most commonly misunderstood aspects of ESA severance. The payroll threshold refers to the employer's total Ontario payroll, not your individual salary.

Yes. The ESA counts partial years in the severance calculation. For example, 7.5 years of service yields 7.5 weeks of severance pay. The decimal portion is included, not rounded down to whole years.

Regular wages include only your base salary or hourly earnings. The following are excluded:

• Overtime pay
• Discretionary bonuses
• Performance bonuses
• Commissions
• Vacation pay loading
• Benefit valuations
• Allowances of any kind
• Tips or gratuities

This is a strict ESA rule. Employers cannot include extras to inflate the severance amount, and employees cannot argue for inclusion of these components in the statutory calculation.

You can ask your HR department or consult an employment lawyer. Large employers (hundreds of employees) almost certainly exceed the $2.5 million threshold. Small businesses with only a handful of employees likely do not.

If you're unsure, this calculator treats "I don't know" as a "No" for eligibility purposes — meaning the other employer threshold (mass layoff) must be met for you to qualify.

If your employer severed 50 or more employees within a 6-month period, the employer threshold is met regardless of payroll size. This means even smaller employers who conduct large layoffs trigger severance obligations.

The 6-month window is rolling — it doesn't have to be a single day or a single round of layoffs.

No. This calculator provides estimates based on the Employment Standards Act, 2000, Part XV. It is not a substitute for professional legal advice. For specific situations, consult an employment lawyer or contact the Ontario Ministry of Labour.