Severance pay after 5 years (2026): the Ontario threshold and the rest of Canada

Five completed years is the single most important length of service in Canadian employment standards, because it is the door to Ontario's statutory severance pay. Clear it and, if your employer meets the payroll or shutdown test, Ontario owes you severance on top of 5 weeks of notice, at the rate of 1 week of regular wages per completed year. Five years is also where most vacation minimums step up to a third week, and where the federal severance calculation has clearly overtaken its floor. Everywhere else in Canada, five years buys you a longer notice period and nothing called severance. This page is part of the severance pay hub.

Updated September 6, 2026 · Figures verified against the statutes of each jurisdiction · see all figures and their sources

What five completed years gives you, jurisdiction by jurisdiction

The table runs each Act's schedules at exactly five completed years: the notice band, the statutory severance where one exists, and the vacation minimum with the percentage that goes with it.

Statutory severance is only owed where the statute's own conditions are met. Ontario: You are owed severance pay if the employer severed the employment relationship, you had been employed there five years or more, and either the employer's payroll is $2.5 million or more, or the severance was caused by a permanent discontinuance of all or part of the business at an establishment and you are one of 50 or more employees whose employment was severed within six months as a result. Federally regulated workplaces: You are owed severance pay if your employer ends your employment and you have completed twelve consecutive months of continuous employment. The only exception in the section is a dismissal for just cause. A lay-off counts as a termination for this purpose unless the regulation says otherwise.

Two patterns are worth naming. Manitoba and Saskatchewan give the most notice at this length of service, 6 weeks. Newfoundland and Labrador gives the least, 3 weeks, and New Brunswick has already reached its ceiling of 4 weeks, which is the shortest notice ladder in the country and does not rise again however long you stay.

Ontario: what the five-year door actually opens

Ontario is the only province with a separate statutory severance pay, and it is not automatic at five years. Section 64 of the ESA sets a two-part test, and you have to pass both halves.

• Your service. You must have been employed by that employer for 5 years or more. All of your time in that employer's employ counts toward it, continuous or not, active or not.
• Your employer. Either its payroll is $2,500,000.00 or more, or the severance was caused by a permanent shutdown of all or part of the business at an establishment that severed 50 employees or more inside the window the section sets.

The word "part" in that second branch does real work: one plant or one office closing inside a much larger company can trigger it. Source: ESA s. 64. The conditions and the formula are set out side by side below.

Why the leftover months count, and how

Notice is banded and ignores your leftover months. Ontario severance is the opposite: ESA s. 65 multiplies your regular wages for a regular work week by your completed years plus your leftover completed months expressed as twelfths of a year, up to a ceiling of 26 weeks of regular wages.

Say your regular wages are $1,000 for a regular work week and you finish five years and six months. The multiplier is five plus six twelfths, so the severance is $5,500.00. Another six months and it would be six times your weekly wage. Nothing is rounded down to the year, which is the detail most severance calculations on the internet get wrong.

Two more points people trip on. The wage that goes into the formula is your regular work week, not a week with overtime in it. And severance pay is separate from termination pay: if you got no notice, you are owed both, one for the notice you did not get and one for the years you put in. The vocabulary is untangled in termination pay versus severance pay.

Federally regulated jobs at five years

If your employer is a bank, an airline, a railway, an interprovincial trucking firm, a telecom or broadcaster, a port or most Crown corporations, the Canada Labour Code applies instead of your province's Act. Severance pay there started back at 12 months of continuous employment and is the greater of 2 days of wages for each completed year and a floor of 5 days of wages (CLC s. 235).

At five completed years the per-year branch is well clear of the floor. If your regular rate works out to $200 a day, the severance is $2,000.00, and it is paid on top of the 5 weeks of notice or wages in lieu that CLC s. 230 requires. The Code sets no ceiling on severance pay, so unlike Ontario it simply keeps adding.

The third week of vacation

Five years is also the common step for vacation. In Ontario, British Columbia, Alberta, Manitoba, Prince Edward Island, the Northwest Territories, Nunavut and federally regulated jobs, the minimum moves up at five completed years, from 2 weeks at 4% of wages to 3 weeks at 6%.

The rest do not line up with that. Quebec moved its third week earlier and you already have it. Nova Scotia and New Brunswick make you wait longer, and Newfoundland and Labrador much longer. Saskatchewan starts everyone at 3 weeks at 5.77%, so nothing changes for you at five. Yukon holds every employee at 2 weeks at 4% forever. Federally there is a further step later, to 4 weeks at 8%, which no other jurisdiction matches.

What matters when the job ends is the percentage, not the weeks: your employer owes the accrued vacation pay on your final pay whether or not you ever took the time. That is covered in vacation pay when your job ends.

A worked example: five years and eight months in Ontario

Ravi earns $1,400 for a regular work week. His employer, whose Ontario payroll is well over the threshold, ends his job with no working notice on the day he reaches five years and eight months. Since his last vacation pay was paid out he has earned $36,400 in gross wages and has taken no vacation.

• Termination pay. The notice band at his length of service is 5 weeks. The leftover months add nothing here, because the schedule is banded. Pay in lieu: $7,000.00.
• Statutory severance. Here the months do count. His multiplier is five plus eight twelfths, so the severance is $7,933.33, well under the ceiling of 26 weeks.
• Vacation pay. At his length of service the rate is 6% of gross wages, so $2,184.00.
• Statutory floor: $17,117.33, plus his unpaid regular wages and any public holiday that falls in the notice period.

Move Ravi to British Columbia, same job and same pay, and the severance line disappears: $9,184.00 is the whole floor, because British Columbia has no separate statutory severance pay. The wage and the dates are invented; every week and percentage comes from the section named in the tables.

What this floor does not include

These are statutory minimums. Outside Quebec, courts award reasonable notice at common law that is often well above the schedule, and this site does not estimate it; a contract or a collective agreement can promise more than either. Signing a release usually gives up whatever sits above the minimum, which is the reason to have an employment lawyer read an offer before you sign. See common law notice versus statutory minimums.