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Free tools › Redundancy pay by country

Redundancy pay: Canada vs New Zealand

Statutory redundancy pay in Canada and New Zealand, side by side, with the primary source for every figure.

How does redundancy pay compare between Canada and New Zealand?

Canada: Ontario severance pay is 1 week per year capped at 26 weeks, but only for employees with 5+ years at employers with a global payroll of C$2.5 million or more, and it stacks on top of termination notice. New Zealand: None by statute. Redundancy compensation exists only if the employment agreement provides it.

Canada vs New Zealand, side by side

CanadaNew Zealand
The ruleOntario severance pay is 1 week per year capped at 26 weeks, but only for employees with 5+ years at employers with a global payroll of C$2.5 million or more, and it stacks on top of termination notice.None by statute. Redundancy compensation exists only if the employment agreement provides it.
At 1 yearNil (severance needs 5+ years)No statutory scale
At 5 years5 weeks' wages, where the C$2.5M payroll test is metNo statutory scale
At 10 years10 weeks' wages, where the C$2.5M payroll test is metNo statutory scale
Key numbersOntario formula: 1 week per year (pro-rated), cap 26 weeks; Dual test: 5+ years' service AND C$2.5M+ global payroll; Stacking: Paid on top of termination notice or pay in lieuStatutory redundancy pay: None; What is required: Genuine reason, consultation, notice per the agreement

Canada

Ontario runs two separate ESA entitlements that people constantly merge: termination pay (the notice entitlement above) and severance pay. Severance is one week's wages per year of service, pro-rated for part years and capped at 26 weeks, owed only where the employee has 5 or more years and the employer's global payroll reaches C$2.5 million. Both can be owed on the same dismissal. The federal version is far smaller: the greater of 2 days' wages per year or 5 days.

  • Ontario formula1 week per year (pro-rated), cap 26 weeks
  • Dual test5+ years' service AND C$2.5M+ global payroll
  • StackingPaid on top of termination notice or pay in lieu
  • FederalGreater of 2 days per year or 5 days' wages
Length of serviceEntitlement
Under 5 yearsNil
5 years or more (payroll test met)1 week per year + 1/12 per extra month, cap 26 weeks
  • The C$2.5M test is global payroll, not Ontario payroll, settled by Hawkes v. Max Aicher (2021).
  • Common-law reasonable notice can dwarf both ESA amounts; we state the statutory floor only.

Source: Ontario ESA guide (Global-payroll reading per 2021 caselaw). Checked July 2026.

New Zealand

New Zealand mandates process, not payment: a genuine business reason, good-faith consultation, redeployment considered, and contractual notice. If the agreement has no redundancy clause, no compensation is owed. A flawed process can still ground an unjustified dismissal claim even though no redundancy payment applies.

  • Statutory redundancy payNone
  • What is requiredGenuine reason, consultation, notice per the agreement
  • Final pay must still include unused annual holidays and other accrued entitlements.

Source: Employment New Zealand (Employment Relations Act 2000). Checked July 2026.

Hiring in both markets?

Put a full number on each side with the true-cost calculators: True cost of an employee (Canada) and True cost of an employee (New Zealand). The complete six-market picture is on the Redundancy pay by country page.

Sources

Every figure on this page comes from the government source for its market.

MarketSourceRule / effectiveVerified
CanadaOntario ESA guideGlobal-payroll reading per 2021 caselawChecked July 2026
New ZealandEmployment New ZealandEmployment Relations Act 2000Checked July 2026
Where Compono fits

Comparing entitlements is the easy half of hiring across markets. The hard half is whether the person you hire in Sydney, Singapore or Seattle will actually work out, and that risk looks the same in every jurisdiction. Compono matches candidates on how they work, not just what the CV claims, so the hires behind these numbers hold up wherever you make them.

See how it works

Common questions

What is the rule on redundancy pay in Canada?

Ontario severance pay is 1 week per year capped at 26 weeks, but only for employees with 5+ years at employers with a global payroll of C$2.5 million or more, and it stacks on top of termination notice. Ontario runs two separate ESA entitlements that people constantly merge: termination pay (the notice entitlement above) and severance pay.

What is the rule on redundancy pay in New Zealand?

None by statute. Redundancy compensation exists only if the employment agreement provides it. New Zealand mandates process, not payment: a genuine business reason, good-faith consultation, redeployment considered, and contractual notice.

Where can I check the source figures?

The sources section below links the Canada and New Zealand government pages every figure on this page was verified against in July 2026.

This page is general information, not legal advice. We check figures annually and update them on a best-efforts basis, but employment rules change and we cannot promise everything here is current or complete. Before you act on it, confirm the detail with your provincial employment standards office, Employment New Zealand or your own adviser. Last reviewed July 2026.