Ontario Employment Standards Act
Severance Pay in Ontario: What You're Owed After a Layoff
If you were laid off in Ontario, you may be entitled to termination pay, severance pay, or both — depending on your years of service and your employer's size. This guide explains the rules under the Employment Standards Act and when common law may give you more.
Ontario severance at a glance
| Entitlement | Who qualifies | Amount (ESA minimum) |
|---|---|---|
| Termination pay | Employed 3+ months | 1 week per year of service, up to 8 weeks |
| Severance pay | 5+ years of service; and employer global payroll ≥ $2.5M, or 50+ employees terminated due to a business closure within 6 months | 1 week per year (including partial years), up to 26 weeks |
| Common law notice | All employees (if not contracted out) | Often 1 month per year of service or more — negotiated or litigated |
Frequently asked questions
What is the difference between termination pay and severance pay in Ontario?
Termination pay (also called pay in lieu of notice) compensates you for the notice period your employer was required to give under the ESA. Severance pay is a separate entitlement for employees with 5+ years of service at a company with a payroll of $2.5 million or more, or if 50+ employees are terminated within a 6-month period. You may be entitled to both.
How do I calculate my severance pay in Ontario?
Under the ESA, severance pay equals your regular weekly wage multiplied by the number of completed years of employment (including partial years as a fraction). The maximum is 26 weeks of pay.
Example
Weekly wage: $1,200 · Years of service: 8.5
ESA severance = $1,200 × 8.5 = $10,200
Common law severance (negotiated or through courts) may be significantly higher — often 1 month per year of service.
How much notice or termination pay am I owed in Ontario?
Under the ESA, employees are entitled to 1 week of notice per year of service, up to a maximum of 8 weeks. Common law entitlements can be much higher — often 1 month per year of service or more, depending on your age, position, and how long it takes to find a new job.
Does severance pay delay my EI in Ontario?
Normally yes — Service Canada allocates severance pay, termination pay, and vacation pay over the weeks they cover, pushing back your EI start date. However, a federal temporary measure active until April 11, 2026 currently waives this allocation rule. If you file your EI claim before that date, these payments will not delay your benefits. After April 11, 2026, the standard allocation rules resume.
Can I negotiate more than the ESA minimum?
Yes. The ESA sets a floor, not a ceiling. Most employees are entitled to common law reasonable notice, which is typically much more than the ESA minimum. You can negotiate directly with your employer or consult an employment lawyer. Many lawyers offer free initial consultations for wrongful dismissal cases.
Related tools
Recent Ontario layoffs
Latest confirmed events — affected employees may be eligible for severance.
Official resources
This page provides general information about Ontario employment standards. Laws change — verify details with the Ontario Ministry of Labour or an employment lawyer before making decisions.