Legal & Regulatory · Employment
Working notice or pay in lieu?
An employer can give notice and keep you working, or pay you instead. This calculator shows the cash and the dates for both under Ontario’s Employment Standards Act rules, and what each route means for your tax and your job search.
Pay in lieu is due the later of 7 days after termination or your next regular pay date, and includes vacation pay and continued benefit contributions.
Inputs
Both routes
Enter weekly wages and weeks of notice, then press Calculate.
What the Ontario guide says
Working notice. During the statutory notice period the employer must not reduce your wage rate or change other terms and conditions, must keep making the contributions needed to maintain your benefit plans, must pay regular wages for a regular work week each week, and may not schedule your vacation in that period unless you agree after receiving written notice.
Pay in lieu (termination pay). If the employer gives no notice or too little, it must pay a lump sum equal to the regular wages you would have earned during the required notice period. Vacation pay is added, and benefit contributions must continue for the notice period. Termination pay is due seven days after termination or on the next regular pay date, whichever is later.
Tax and common law
CRA treats wages in lieu of termination notice as ordinary employment income, not a retiring allowance, so normal payroll deductions apply. The statutory notice period is a floor. If your common-law reasonable notice is longer, pay in lieu of the statutory minimum does not settle the balance.
Frequently asked questions
When must pay in lieu of notice be paid in Ontario?
Seven days after termination or on the next regular pay date, whichever is later, according to the Ontario Employment Standards Act guide.
What does the employer have to continue during working notice?
The same wage rate and terms, benefit plan contributions, and regular wages for a regular work week. Vacation cannot be scheduled in the notice period unless you agree after receiving written notice.
Is pay in lieu of notice taxed like severance?
No. CRA’s guide excludes wages in lieu of termination notice from the retiring allowance definition, so it is treated as ordinary employment income. Severance in the retiring-allowance sense is taxed at the lump-sum rates.
Do other provinces work the same way?
Not exactly. Notice periods, pay-in-lieu rules and payment deadlines differ. This tool follows Ontario’s guide; use the notice-of-termination hub for each province’s own figures.
Does working notice end any common-law claim?
Not automatically. Statutory notice is a minimum, and your contract and the Bardal factors may point to more.
Sources
Verified 16 October 2026. Every rate, rule and case cited here was read on the official page or court decision listed below.
Not legal or tax advice
Dates assume the employer pays the earliest lawful day; your contract or a settlement may change them. Employment law differs by province and by contract, and outcomes depend on evidence. If a lot of money or a signed release is involved, speak to an employment lawyer (many offer short free consultations) before you sign or send anything.