Pay · job loss
Severance Pay Calculator
Your minimum termination and severance pay in Ontario, BC or Alberta, and what you keep after tax.
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Termination and severance pay rules
Ontario: termination pay of 1 week (under 1 year), 2 weeks (1 to 3 years), then 1 week per year up to 8 weeks. Severance pay is extra: 1 week per year worked, including part years, up to 26 weeks, if you worked there 5+ years and your employer has a payroll of $2.5 million or more (or laid off 50+ people in 6 months because of a closure).
BC: 1 week after 3 months, 2 weeks after 1 year, 3 weeks after 3 years plus 1 week for each extra year, up to 8 weeks. Alberta: 1 week (under 2 years), 2 weeks (2 to 4), 4 weeks (4 to 6), 5 weeks (6 to 8), 6 weeks (8 to 10), 8 weeks (10+).
These are legal minimums. Unless your contract limits you to them, courts often award much more “reasonable notice” (sometimes a month per year), so get advice before signing a release. Severance is taxed as income; a lump sum has 10% to 30% tax withheld. See what your next job pays after tax with the income tax calculator.
Sources: Ontario: termination of employment · Ontario: severance pay
Frequently asked questions
How much severance pay will I get in Ontario?
At least 1 week's pay per year worked, up to 26 weeks, if you worked there 5+ years and your employer's payroll is $2.5 million or more. Termination pay of up to 8 weeks comes on top.
Is severance pay taxable in Canada?
Yes. It's taxed as income for the year you receive it. A lump sum has 10%, 20% or 30% tax withheld, and the rest is settled when you file.
Can I put my severance into an RRSP?
Yes, using your normal RRSP room, which lowers the tax on it. Extra transfer room only exists for years of service before 1996.
Do I get EI if I receive severance?
Usually yes, but EI payments start after the period your severance and termination pay cover.
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