Notice pay vs severance pay vs working notice in Ontario: what the ESA requires
When an employer in Ontario ends someone's job without cause, three different things can be owed, and they are often mixed up. Notice is time. Termination pay is money in place of that time. Severance pay is a separate payment with its own tests. This guide sets out the minimums in Ontario's Employment Standards Act, 2000 (ESA), with worked examples calculated by the same code as the termination calculator.
Only the statutory minimum is covered. An employment contract, a collective agreement or the common law can give more, and a court can award notice well beyond the ESA table. If you are being let go, treat the figures here as a floor.
1. Working notice, termination pay and severance pay
- Working notice: the employer gives written notice and you keep working and keep being paid until the end date. Nothing extra is owed for the notice period itself.
- Termination pay: if the employer ends employment right away or gives less than the required notice, it must pay the wages for the notice period that was not given (ESA s. 61).
- Severance pay: a separate payment for long-serving employees at larger employers (ESA ss. 63 to 65). It is owed on top of notice or termination pay.
Notice and termination pay are substitutes for each other. Severance pay is neither. An employee can receive all three kinds of money in one termination: a notice period to work, pay for any part of it that is not given, and severance pay.
2. How many weeks of notice
Employees with at least 3 months of continuous employment are entitled to notice under sections 54 and 57. The number of weeks depends on the completed years of employment, counted on the date notice is given or, when there is no notice, the date employment ends:
| Completed years of employment | Weeks of notice |
|---|---|
| Less than 1 year (3 months or more) | 1 week |
| 1 year but less than 3 years | 2 weeks |
| 3 years | 3 weeks |
| 4 years | 4 weeks |
| 5 years | 5 weeks |
| 6 years | 6 weeks |
| 7 years | 7 weeks |
| 8 years or more | 8 weeks |
The wage used is the regular wage for a regular work week, not overtime. If there is no regular work week, the ESA uses the average of the weeks worked in the 12 weeks before termination.
3. Mass terminations
If an employer terminates 50 or more employees within a 4-week period, longer notice applies under section 58 and Ontario Regulation 288/01:
| Employees terminated within 4 weeks | Weeks of notice |
|---|---|
| 50 to 199 | 8 weeks |
| 200 to 499 | 12 weeks |
| 500 or more | 16 weeks |
The calculator uses the mass termination figure in place of the service-based figure. The longest service-based notice is 8 weeks, which equals the shortest mass termination notice, so the mass termination figure is never lower.
4. Severance pay
Severance pay has two tests. The employee must have worked for the employer for 5 years or more. The employer must also either have a payroll of $2,500,000 or more, or have severed 50 or more employees in a period of 6 months or less because all or part of its business closed permanently. An employer below the payroll threshold, and not in that second situation, does not owe ESA severance pay even to a 20-year employee.
The amount is one week of regular wages for each completed year of service, with each completed month counted as a twelfth of a week, up to 26 weeks. When the employer pays termination pay instead of giving notice, the notice period is treated as time worked, so the service used for severance includes the weeks of notice that were paid out (s. 65(4)).
5. Four examples
Each example is a termination on October 30, 2026, with pay instead of working notice. The columns come straight from the calculator.
| Example | Service | Weekly wage | Notice | Termination pay | Severance pay | Total |
|---|---|---|---|---|---|---|
| A | 3 years 7 months | $1,200 | 3 weeks | $3,600 | $0 | $3,600 |
| B | 8 years 1 month | $1,500 | 8 weeks | $12,000 | $12,375 | $24,375 |
| C | 12 years 5 months | $1,000 | 8 weeks | $8,000 | $0 | $8,000 |
| D | 1 year 2 months | $900 | 8 weeks | $7,200 | $0 | $7,200 |
Example A: 3 years 7 months of service and a weekly wage of $1,200. Notice is 3 weeks, so termination pay is $3,600. With less than five years, there is no severance pay.
Example B: 8 years 1 month at a weekly wage of $1,500, and the employer meets the payroll test. Notice is 8 weeks ($12,000). Severance counts those 8 weeks as service, so it uses 8 years and 3 months and comes to 8.25 weeks, or $12,375. The total is $24,375.
Example C: 12 years 5 months of service at $1,000 a week, and the employer is below the payroll threshold. Notice is 8 weeks, the most the table gives, so termination pay is $8,000. A long-serving employee at such an employer receives no ESA severance pay, which is the situation where a contract or the common law matters most.
Example D: 1 year 2 months of service at $900 a week, in a termination of 120 employees. The service table would give 2 weeks, but the mass termination rule gives 8 weeks, so termination pay is $7,200.
6. Who is not entitled
Notice and termination pay are not owed to some groups, including employees under three months, employees hired for a definite term or a specific task that has ended, employees dismissed for wilful misconduct that is not trivial, and construction employees. Severance pay has a similar list, including employees who retire on an unreduced pension and those who refuse reasonable alternative work. The calculator has a checkbox for each of these exclusions. The conditions in the Regulation are narrow and the labels in the calculator are short summaries, so read sections 2 and 9 of Ontario Regulation 288/01 before relying on an exclusion.
7. What the figures leave out
- Common law reasonable notice, which can be many months for long service or senior roles.
- Contract terms, collective agreements and employer policies that promise more than the ESA.
- Vacation pay and other wages owed at the end of employment, and tax on any of these payments.
- Employees who are not covered by the ESA, such as federally regulated workers, and every province other than Ontario.
This is general information about a statute, not legal advice. If you have received a termination letter, an employment lawyer or the Ontario Ministry of Labour can tell you what applies to your situation.
Work out your own notice and severanceSources
- Employment Standards Act, 2000, S.O. 2000, c. 41 (ss. 54, 57, 58, 60, 61, 63 to 65), Ontario e-Laws
- O. Reg. 288/01: Termination and Severance of Employment (ss. 2, 3, 9), Ontario e-Laws
- Every rate used, with its source and check date: Sources and rates
This calculator is general information, not tax, legal or financial advice. It uses the CRA and Ontario pages listed on the Sources page, and your pay stub, employment contract or tax return may differ. Rates as at November 1, 2026.