Salary Continuance in Ontario: What You Need to Know

If you’ve been let go from your job in Ontario, your employer might offer you severance through salary continuance instead of a lump sum payment. But what does that actually mean — and is it the right choice for you?

In this blog, we explain the meaning of salary continuance, how it compares to lump sum severance, and what non-unionized employees in Ontario should know before accepting it.

What’s in This Guide

What Is Salary Continuance?

Salary continuance (also called salary continuation) is a method of delivering severance pay in Ontario where your employer continues to pay your regular salary for a set period of time after termination, rather than giving you a one-time lump sum.

During this period, your:

• Regular pay schedule continues
• Benefits may remain active
• Deductions (taxes, CPP, EI) are still made
• You may be required to seek new work

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Salary Continuance Meaning (in Simple Terms)

Think of salary continuance as “stay-on-the-payroll” severance. You’re not working, but your employer keeps paying you as if you were — usually until the end of your notice or severance period.

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Salary Continuance vs. Severance: What’s the Difference?

While salary continuance is one way of delivering severance, severance itself refers to any compensation you’re entitled to when your employment ends — whether paid as:

• Lump sum severance (one-time payout)
• Salary continuance (ongoing payments)

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Salary Continuance vs. Lump Sum: Which Is Better?

It depends — but many employees prefer a lump sum for these reasons:

• More flexibility: You can invest or deposit into an RRSP to reduce taxes.
• Fewer restrictions: You’re not typically penalized for finding a new job quickly.
• Clean break: You sever ties with your former employer immediately.

However, salary continuance might be beneficial if:

• Your benefits continue (e.g., health or dental)
• You’re in a high-tax bracket and prefer spreading income out
• You negotiate strong terms with your employer

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Can You Negotiate Salary Continuance?

Yes — non-unionized employees in Ontario have the right to negotiate their severance pay, and the terms of salary continuance, including:

• The total amount offered
• Whether it converts to a lump sum
• Whether benefits continue
• Whether mitigation applies

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Common Questions About Salary Continuance in Ontario

✅ Is Salary Continuance Mandatory in Ontario?

No. Employers aren’t required to offer salary continuance. It’s just one method of delivering severance.

✅ What Happens If I Get a New Job During Salary Continuance?

Your payments may stop — unless your agreement doesn’t include a mitigation clause. This is why it’s critical to review the offer before signing.

✅ Can I Ask for a Lump Sum Instead?

Yes. Many employees negotiate a lump sum severance for more control and peace of mind.

✅ What If My Employer Offers Salary Continuance Instead of Severance?

This is a red flag. Salary continuance is just one form of severance — not a replacement for your legal entitlements. You could be owed more than what’s offered.

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Final Thoughts: Get Legal Advice Before Accepting Salary Continuance

Salary continuance may sound fair — but it’s often designed to save your employer money. You might be entitled to a much larger severance package than what’s being offered.

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When to Speak to an Employment Lawyer

Before accepting salary continuance, make sure the severance package itself is fair. Many non-unionized employees in Ontario are offered far less than what they’re actually owed — especially when the payment is spread out over time.

You are owed up to 24 months’ pay, depending on your age, position, length of service, and how difficult it may be for you to find new work. Some salary continuance offers include mitigation clauses that can cut off payments early — costing you thousands.

At Samfiru Tumarkin LLP, we’ve helped more than 50,000 employees across Ontario and Canada understand their severance rights and maximize what they’re paid — whether as a lump sum or salary continuation. Before you sign anything, let us review your offer and make sure the amount — and the terms — are right.

• 👥 Over 50,000 clients helped across Canada
• 💰 Millions recovered in severance and compensation
• ⚖️ No win, no fee — you don’t pay unless we win*
• ⭐ 2,283 5-star Google reviews across Ontario (4.8 average)
• 🏆 Recognized as one of Canada’s Best Law Firms by The Globe and Mail

* Conditions apply. Not all cases qualify.

Contact us now to find out what you’re owed. Book your consultation or call 1-855-821-5900.