Ontario Severance Estimator
Two numbers matter — the legal minimum and what courts actually award. Here's both, as a range.
Updated for 2026 · Ontario ESA
Your situation
Your estimate
How this is calculated
Ontario has two severance regimes, and confusing them is the #1 source of bad numbers:
- ESA minimums (Employment Standards Act): roughly 1 week of notice/termination pay per year of service (up to 8 weeks), plus severance pay of 1 week per year (up to 26 weeks) if the employer has a $2.5M+ payroll and you have 5+ years. This is the floor — what the government website shows.
- Common-law reasonable notice: what courts award using the Bardal factors — your age, length of service, character of employment, and availability of similar work. Typically 2–4× the ESA minimum, up to about 24 months. This is what employment lawyers negotiate toward.
A signed termination clause can limit you to ESA minimums — but many are unenforceable for technical reasons. Never assume the clause holds without legal advice.
Tax on lump sums
Severance paid as a lump sum faces statutory withholding (10–30% depending on the amount), which feels like extra tax but is just a prepayment — it's trued up when you file. Part of a retiring allowance can often be rolled directly into your RRSP to defer tax.
Sources
- Ontario Employment Standards Act, 2000 — ss. 57–66 (termination & severance pay)
- Bardal v. Globe & Mail Ltd. (1960) — the reasonable-notice factors
- CRA — lump-sum withholding rates; retiring allowance rollover rules
Common questions
Why does the government website give a smaller number than law-firm calculators?
They're answering different questions. The government site shows ESA minimums — the legal floor. Law-firm calculators estimate common-law reasonable notice, which is usually 2–4× higher. Both can be right at once; this estimator shows you the range between them.
Should I sign the severance offer right away?
No. Initial offers routinely sit at or near ESA minimums, and signing usually means waiving your right to more. Get an employment lawyer to review it first — many offer free initial consultations for severance reviews.
Why was so much tax withheld from my severance?
Lump sums face flat statutory withholding (up to 30%), which is higher than your normal payroll withholding. It's a prepayment, not the final tax — you settle the difference at tax time. A retiring-allowance rollover into your RRSP can defer it.
Does my termination clause actually bind me?
Maybe not — courts strike down termination clauses for surprisingly technical reasons (outdated ESA references, illegal "just cause" language). But enforceability is case-specific: this is exactly what a lawyer reviews.
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