Severance Pay Calculator (Ontario)
Eligibility test and the ESA severance formula, separate from termination pay.
✓ Verified 2026-09-19 · sources cited below · no sign-up
How ESA severance pay works
Severance pay = regular weekly wages × (completed years + completed months ÷ 12), capped at 26 weeks. It applies only when the employee has at least 5 years of service and the employer's Ontario payroll is at least $2,500,000 (or a mass severance of 50+). "Regular wages" excludes overtime; for irregular pay, use the average of the last 12 weeks.
Not sure about the payroll test? Payroll in this context means total wages paid in Ontario in the 4 weeks before termination, multiplied by 13, or the prior fiscal year's Ontario payroll. Employers with 20–30 employees at typical wages often cross it.
Frequently asked questions
Who qualifies for severance pay in Ontario?
Employees with 5 or more years of service (continuous or not) whose employer has an Ontario payroll of $2.5 million or more, or where 50 or more employees are severed within six months because part of the business closed.
How much severance pay is owed?
One week of regular wages for each completed year of service, plus a pro-rated amount for a partial year (completed months ÷ 12), to a maximum of 26 weeks.
Is severance pay the same as termination pay?
No. Termination pay replaces notice and caps at 8 weeks. Severance pay is an additional entitlement for long-service employees of larger employers. Both can be owed at the same time.
Is the ESA severance amount all I can get?
Often not. Common-law reasonable notice can be substantially higher than ESA minimums unless a valid employment contract limits you to the ESA. An employment lawyer can review the contract; many offer free initial consultations.
When must severance be paid?
Within 7 days of termination or on the next regular pay day, whichever is later. With written agreement it may be paid in instalments over up to three years.
Source: Ontario ESA – Severance pay. Verified 2026-09-19. Minimum-standards estimate; not legal advice. Exceptions include wilful misconduct, refusal of reasonable alternative employment, and certain construction and fixed-term situations.