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Free tools › Redundancy pay by country

Redundancy pay: Canada vs United States

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

How does redundancy pay compare between Canada and US?

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 States: None. Severance is a matter of contract or company policy; the WARN Act mandates notice, not payment.

Canada vs United States, side by side

CanadaUnited States
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. Severance is a matter of contract or company policy; the WARN Act mandates notice, not payment.
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 lieuFederal statutory severance: None; WARN liability for missed notice: Up to 60 days' back pay and benefits

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 States

The Fair Labor Standards Act has no severance requirement, and the Department of Labor says so in exactly those terms. Severance in the US comes from employment agreements, severance plans (enforceable under ERISA once promised) or collective agreements. WARN's teeth are back pay for missing notice, up to 60 days, not a severance formula.

  • Federal statutory severanceNone
  • WARN liability for missed noticeUp to 60 days' back pay and benefits
  • 'Two weeks per year of service' is common US practice, but it is policy, not law.
  • New Jersey's mini-WARN is the notable state exception, mandating severance for large layoffs.

Source: US Department of Labor (FLSA position, current). 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 (US). 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 StatesUS Department of LaborFLSA position, currentChecked 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 US?

None. Severance is a matter of contract or company policy; the WARN Act mandates notice, not payment. The Fair Labor Standards Act has no severance requirement, and the Department of Labor says so in exactly those terms.

Where can I check the source figures?

The sources section below links the Canada and the US 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, the US Department of Labor or your own adviser. Last reviewed July 2026.