What You Need to Know About Severance Pay in Canada

If you are a non-unionized employee in Canada who has been terminated or let go without cause, you are likely entitled to severance pay. This applies whether your job ended due to restructuring, cost-cutting, downsizing, or other business reasons.

Severance pay in Canada is compensation an employer must provide when a non-unionized employee is terminated without cause. It’s meant to replace income and support you financially while you search for new work.

In most cases, severance pay includes:

• Pay in lieu of notice (compensation instead of working through a notice period)
• Continued benefits for a period of time
• Bonuses, commissions, or other forms of compensation

What many employees don’t realize is that severance pay in Canada is not limited to the minimum amounts set out in employment standards legislation. In fact, your legal entitlement is often much higher.

Under Canadian common law, severance pay can reach up to 24 months’ pay, depending on your situation.

At Samfiru Tumarkin LLP, Canada’s most positively reviewed employment law firm, we’ve helped over 50,000 individuals secure proper severance pay. Our team understands how to calculate severance under the law — and how to push back when employers fall short.

Common Law Severance vs. Statutory Severance in Canada

One of the most common (and costly) misunderstandings about severance pay is the difference between statutory severance and common law severance.

Statutory Severance (Minimum Standards)

Employment standards legislation sets out minimum notice or termination pay, usually based mainly on length of service. These are the bare minimum amounts employers must provide.

Many employers base their severance offers entirely on these minimums.

Common Law Severance (Your True Legal Entitlement)

Under common law severance in Canada, severance pay is based on a broader set of factors, including:

• Your age
• Your position and level of responsibility
• Your length of service
• Your ability to find comparable employment

Because of this, common law severance is often far greater than statutory minimums — even when an employer technically complies with employment standards legislation.

This is why employees who rely only on government guidelines or employer explanations often accept significantly less severance than they’re legally owed.

What Is a Typical Severance Package in Canada?

There is no fixed formula for severance pay in Canada. Courts look at the full circumstances of your employment, not just how long you worked for the company.

That said:

• Short-service employees may still be entitled to several months of severance
• Long-service or senior employees may be owed a year or more of compensation
• Older employees often receive higher severance, especially if finding new work is difficult

Every situation is different. The only way to know whether your severance offer is fair is to assess all legal factors together.

Don’t Sign Just Because There’s a Deadline

Many employers try to pressure employees into accepting severance offers by setting short deadlines — 24, 48, or 72 hours — and suggesting the offer will disappear.

This is not true.

You do not lose your severance rights just because your employer imposed a deadline. These time limits are pressure tactics, not legal requirements.

Before signing anything, take the time to understand what you’re actually owed under the law.

What to Do if You Receive a Severance Package

Being let go from your job is difficult enough. Figuring out whether your severance package is fair can be even more confusing.

Most employees don’t realize that the severance offer they receive is often far below what the law requires. Employers may:

• Use complex legal language
• Claim the offer is “final”
• Suggest severance is non-negotiable

These tactics are designed to limit what they have to pay.

At Samfiru Tumarkin LLP, our severance pay lawyers review your entire situation — including your role, age, length of service, compensation, and re-employment prospects — to determine what you’re truly owed under common law.

Key Things to Remember:

• You do not have to sign right away
• You are not required to accept a lowball offer
• Severance packages are negotiable, especially with legal advice

When a Severance Dispute Becomes a Wrongful Dismissal Claim

In Canadian employment law, wrongful dismissal usually isn’t about why you were fired — it’s about whether you were paid properly when it happened.

If your employer failed to provide full severance pay under common law, your termination may qualify as wrongful dismissal, even if:

• You were let go “without cause”
• Minimum employment standards were met
• No misconduct was alleged

Wrongful dismissal claims are extremely common — and most are resolved without ever going to court, once the employer understands their legal exposure.

How Our Severance Lawyers Help You Get What You’re Owed

Once we review your severance offer and identify any shortfalls, our team gets to work.

1️⃣ We Compare the Offer to Your Legal Entitlement

Most clients are owed significantly more than what was first offered.

2️⃣ We Explain Your Options Clearly

You’ll understand whether it makes sense to accept, negotiate, or pursue a claim — with no pressure.

3️⃣ We Push for a Better Result, Fast

Most severance disputes are resolved through negotiation, often within weeks.

⚖️ For most severance matters, you don’t pay unless we succeed.

Find Province-Specific Severance Pay Information

While severance pay is guided by common law across Canada, provincial rules can still affect your rights. We’ve created dedicated pages that explain severance entitlements in your province:

• Severance Pay Ontario
• Severance Pay Alberta
• Severance Pay British Columbia

Questions About Severance Pay in Canada

These answers apply to non-unionized employees across Canada. For province-specific advice, use the selector above.