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Free tools › Redundancy pay by country

Redundancy pay: Canada vs United Kingdom

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

How does redundancy pay compare between Canada and UK?

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. United Kingdom: 0.5 to 1.5 weeks' pay per year of service by age band, after 2 years, with weekly pay capped at £751 and the total at £22,530. At five years' service that means 5 weeks' wages, where the C$2.5M payroll test is met in Canada and 5 weeks' pay (aged 22-40 throughout, capped at £751/week) in the UK.

Canada vs United Kingdom, side by side

CanadaUnited Kingdom
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.0.5 to 1.5 weeks' pay per year of service by age band, after 2 years, with weekly pay capped at £751 and the total at £22,530.
At 1 yearNil (severance needs 5+ years)Nil (under the 2-year qualifying line)
At 5 years5 weeks' wages, where the C$2.5M payroll test is met5 weeks' pay (aged 22-40 throughout, capped at £751/week)
At 10 years10 weeks' wages, where the C$2.5M payroll test is met10 weeks' pay (aged 22-40 throughout, capped at £751/week)
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 lieuFormula: 0.5 / 1 / 1.5 weeks per year by age band; Weekly pay cap: £751 (2026-27); Maximum: £22,530

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.

United Kingdom

Statutory redundancy pay uses three age bands: half a week per year under 22, one week per year from 22 to 40, and one and a half weeks per year at 41 plus. Service counts up to 20 years, weekly pay is capped at £751 for 2026-27, and the ceiling works out at £22,530. Two years' service is the qualifying line, unchanged by the Employment Rights Act 2025.

  • Formula0.5 / 1 / 1.5 weeks per year by age band
  • Weekly pay cap£751 (2026-27)
  • Maximum£22,530
  • Qualifying service2 years
Length of serviceEntitlement
Years worked under age 220.5 week's pay per year
Years worked aged 22 to 401 week's pay per year
Years worked aged 41 plus1.5 weeks' pay per year
  • ERA 2025 doubled the collective-consultation protective award to 180 days' pay, so process failures now cost far more than the redundancy pay itself.
  • Redundancy pay is tax-free up to £30,000.

Source: GOV.UK (Caps from 6 Apr 2026). 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 (UK). 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
United KingdomGOV.UKCaps from 6 Apr 2026Checked 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 the UK?

0.5 to 1.5 weeks' pay per year of service by age band, after 2 years, with weekly pay capped at £751 and the total at £22,530. Statutory redundancy pay uses three age bands: half a week per year under 22, one week per year from 22 to 40, and one and a half weeks per year at 41 plus.

Where can I check the source figures?

The sources section below links the Canada and the UK 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, GOV.UK or your own adviser. Last reviewed July 2026.