How Much Severance Am I Actually Owed in Ontario?
Your employer's offer is rarely the real number. Here is how Ontario actually calculates severance, why the minimums are just a floor, and what pushes the figure higher.
Key takeaways
- Your employer's first offer is usually the ESA minimum, which is the floor, not the ceiling.
- Most non-unionized Ontario employees are owed common law severance, which can reach up to 24 months of pay.
- Your real number depends on your age, your position, your length of service, and how hard it will be to find similar work.
- You do not have to accept an offer right away. Signing the release too early can cost you tens of thousands of dollars.
- A severance review is free, and it tells you what you are actually owed before you sign anything.
In this article
If you have just been let go, the offer in front of you almost certainly understates what you are owed. In Ontario, most non-unionized employees are entitled to common law severance, which is usually far more than the minimums your employer is required to quote. This guide explains how the number is actually built, and what makes it go up.
What is severance pay in Ontario?
Severance pay is the compensation you are owed when your employer ends your job without cause. There are two separate systems. The first is the statutory minimum under the Employment Standards Act (ESA). The second is common law reasonable notice, which comes from decades of court decisions and is almost always the larger figure. Your employer only has to tell you about the first one.
ESA minimums vs. common law severance
The ESA sets a hard floor. Common law sets your real entitlement. The gap between the two is where most of the money sits.
| ESA minimum | Common law severance | |
|---|---|---|
| Where it comes from | The statute | Court decisions |
| How it is measured | Roughly 1 week per year (plus severance pay if eligible) | Months of pay based on your full situation |
| Typical ceiling | 8 weeks notice + 26 weeks severance | Up to 24 months |
| Does your employer mention it? | Usually yes | Usually no |
⚠️Before you sign. Do not sign the release until you know your common law number. Once you sign, you almost never get a second chance to reopen it.
How is common law severance calculated?
There is no fixed formula. Courts weigh a set of factors known as the Bardal factors, named after the case that established them. The longer it will likely take you to find comparable work, the more notice you are owed.
- Length of service — how long you worked there.
- Age — older employees generally get more, because re-employment tends to take longer.
- Character of employment — senior and specialized roles usually attract longer notice.
- Availability of similar work — a thin job market in your field increases the figure.
Real Ontario awards show how service length feeds into the number:
- Rasanen v. Lisle-Metrix (2004 CanLII 16321): about 9 years of service, roughly 6 months of notice.
- Kotecha v. Affinia Canada (2014 ONCA 411): 20 years of service, 18 months.
- Freudenberg v. DiGiammarino (2012 ONSC 5725): around 21 years of service, 24 months, at the ceiling.
Individual cases only tell you so much. Here is what Ontario courts have actually awarded across hundreds of decisions, grouped by length of service:
See your own severance range
The table above is the median across hundreds of cases. Your number turns on your age, role, and industry. Our free, case-law-calibrated calculator estimates your personal range in about two minutes.
What can push your severance higher?
Beyond the core factors, several things commonly increase the number: being recruited away from a secure job, a written promise about job security, bad-faith conduct in how you were dismissed, and a contract clause that does not hold up. A severance offer is also more than salary. The full package should account for your bonus, commissions, benefits, pension, and stock or RSUs over the notice period.
Can your employment contract limit your severance?
Sometimes, but far less often than employers think. A termination clause can cap your entitlement at the ESA minimum, but only if it is drafted correctly. Ontario courts strike down these clauses regularly, often over a single defective sentence. If your clause is unenforceable, your full common law entitlement comes back. This is worth having a lawyer check before you accept anything.
What should you do after you get a severance offer?
- 1.Do not sign anything on the spot, even if there is a deadline.
- 2.Keep working copies of your contract, offer letter, and pay records.
- 3.Do not say anything that sounds like you accept or resign.
- 4.Get the offer reviewed before the deadline. The review is free.
- 5.Let your lawyer respond. Most cases settle without going to court.
How long do you have to make a claim?
In Ontario you generally have two years from the date of termination to start a wrongful dismissal claim. That sounds like a long time, but evidence and leverage are strongest early, and many offers have short acceptance windows. The sooner you get advice, the more room you have to negotiate.
Frequently asked questions
Is severance pay taxable in Ontario?
Yes. Severance is taxable income. How it is paid out, as a lump sum or as salary continuance, and whether any of it is transferred to an RRSP, can change how much tax you pay. This is worth planning before you accept.
Do I get severance if I quit?
Usually not. But if your employer forced you out by cutting your pay, demoting you, or making your job intolerable, that can be a constructive dismissal, and you may be owed the same severance as if you had been fired.
Do I get severance if I was fired for cause?
Employers claim cause far more often than the law allows. True just cause requires serious misconduct and is very hard to prove. If the claim does not hold up, you are owed full severance.
How much does it cost to have my severance reviewed?
Nothing upfront. The first review is free, and most severance and wrongful dismissal cases are handled on a contingency basis, so you pay only if we recover for you.
Amir Mirza
Founder & Employment Lawyer, Mirza Law
Amir Mirza is the founder of Mirza Law and an Ontario employment lawyer acting for employees. He is licensed by the Law Society of Ontario and is a member of the Ontario Trial Lawyers Association. He writes about severance, wrongful dismissal, and the rights Ontario employees have when their job ends.
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