2026 rates

CRA T4032-ON

ESA 2000 s. 57

CPP + EI + income tax

Termination Pay Estimator

Employment Start Date (or enter years below)

Years of Service (completed years)

Pay Frequency

Wage Type

Annual Salary

Optional adjustments

Unused Vacation (dollar amount)

Working Notice Weeks (already provided)

Mass termination (50+ employees terminated in 4-week window)

Results — Estimate Only

Notice entitlement —

Weekly wage —

1. Termination pay (gross) —

2. Vacation pay on termination pay —

3. Unused accrued vacation payout —

Combined gross payout —

Estimated withholding (ESTIMATE) —

Federal income tax —

Ontario income tax —

CPP1 employee contribution —

CPP2 employee contribution —

EI employee premium —

Estimated net payout (ESTIMATE) —

Benefit continuation: Employer must continue benefits for — after termination. Dollar value of benefits is not calculated.

Important disclaimers:

ESA minimum only — actual entitlements may be higher under common law
Common law reasonable notice not included — may be significantly higher
Not legal advice
Withholding is an estimate — use CRA PDOC for exact figures
CPP and EI estimates assume annual maximums not yet reached
Construction employees are exempt from ESA termination rules — this calculator does not apply to them
Mass termination rules require employer verification — calculator cannot confirm trigger
Benefit continuation is not included in dollar outputs
Consult an employment lawyer before accepting any termination package

How Ontario Termination Pay Works

Under the Employment Standards Act, 2000 (ESA), Ontario employers must give termination notice or pay in lieu of notice when ending employment without cause. This calculator estimates your minimum ESA entitlement.

Notice Entitlement (ESA s. 57)

Period of Employment	Notice Weeks
Less than 3 months	0
3 months but less than 1 year	1
1 year but less than 3 years	2
3 years but less than 4 years	3
4 years but less than 5 years	4
5 years but less than 6 years	5
6 years but less than 7 years	6
7 years but less than 8 years	7
8 years or more	8

Completed years only — never round up. Based on ESA 2000, s. 57.

What Counts as Regular Wages

Regular wages include your base salary or hourly rate × regular weekly hours. They exclude overtime pay, vacation pay, public holiday pay, premium pay, and severance pay.

Mass Termination (ESA s. 58)

If 50 or more employees are terminated within a 4-week window, notice periods are overridden:

50–199 employees: 8 weeks
200–499 employees: 12 weeks
500+ employees: 16 weeks

Employer must file Form 1 with the Director of Employment Standards within the prescribed timeline.

Vacation Pay on Termination

When employment ends, vacation pay is owed on termination pay itself — it is not included in the termination pay amount.

Less than 5 years service: 4% of termination pay
5 or more years service: 6% of termination pay

Unused accrued vacation is a separate payout — never merged with termination pay. Both vacation pay on termination and unused vacation are subject to CPP, EI, and income tax withholding.

Withholding on Termination Pay

Wages in lieu of termination notice are employment income, not a retiring allowance. This means CPP and EI both apply, and income tax is calculated using the CRA bonus method (T4032 annualization).

Key distinction

Wages in lieu of notice → employment income → CPP + EI + bonus method tax
Retiring allowance → separate CRA category → no CPP/EI → lump-sum tax rates

This calculator treats all payouts as wages in lieu of notice, per the CRA guidance at Wages in lieu of termination notice.

2026 Payroll Rates

CPP1: 5.95% on earnings $3,500–$74,600 | Max: $4,230.45
CPP2: 4.00% on earnings $74,600–$85,000 | Max: $416.00
EI: 1.63% on earnings up to $68,900 | Max: $1,123.07

What This Calculator Does Not Cover

Common-law reasonable notice — may be significantly higher than ESA minimums. Consult an employment lawyer.
ESA severance pay — a separate entitlement under ESA s. 64 with different eligibility rules. See OntarioSeverancePayCalc.ca.
Retiring allowances — separate CRA category with different tax treatment.
Federally regulated employees — governed by the Canada Labour Code, not the ESA.
Construction employees — exempt from ESA termination provisions.
Wilful misconduct — disqualifies ESA entitlement. This calculator cannot determine if misconduct applies.

Common Questions About Termination Pay

Can my employer give working notice instead of pay?

Yes. Employers can provide either written working notice or pay in lieu of notice — or a combination. This calculator deducts any working notice weeks you've already received from your ESA notice entitlement.

Does my employer have to continue my benefits during the notice period?

Yes. Under ESA s. 60, employers must continue benefit plan contributions for the duration of the notice period. The dollar value of benefits is not included in the termination pay calculation.

What if I was fired for cause?

Wilful misconduct disqualifies ESA termination pay. However, "cause" is narrowly defined. Performance issues, absenteeism, or minor policy violations typically do not qualify. This calculator cannot make this determination — consult an employment lawyer.

Is termination pay the same as severance pay?

No. These are separate ESA entitlements with different eligibility rules. Termination pay is pay in lieu of notice (up to 8 weeks). Severance pay applies to employees with 5+ years at employers with a $2.5M+ payroll or 50+ employees. See OntarioSeverancePayCalc.ca.

Full methodology: Ontario Termination Pay Calculator – Calc-HQ.ca