Final Pay in Ontario: Deadlines, Deductions and Rights

In Ontario, an employer generally must pay an employee’s final wages no later than the later of seven days after employment ends or the employee’s next regular payday. Final pay may include unpaid wages and other amounts owed under the Employment Standards Act, 2000 (ESA), such as accrued vacation pay; termination or severance pay may also be due when the ESA’s conditions are met.

What final pay can include

“Final pay” is not a separate, single payment defined by one universal amount. It is the money still owed when employment ends. What belongs in it depends on the employee’s circumstances, the reason employment ended, and the terms of any applicable employment agreement or collective agreement.

Amounts that may be payable include:

• Unpaid wages: Regular earnings for work already performed, including applicable overtime and other wages earned but not yet paid.
• Vacation pay: Any vacation pay earned but not already paid or taken. The ESA generally sets minimum vacation pay at 4% of wages for employees with less than five years of employment and 6% for employees with five or more years, subject to the Act’s rules and exceptions.
• Termination pay: If the employee qualifies under the ESA, pay instead of the required written notice of termination. The ESA minimum is based on length of employment, up to eight weeks.
• Severance pay: A separate ESA entitlement for eligible employees who meet the service and employer-payroll conditions. It is not automatically owed whenever someone is dismissed.
• Other earned compensation: For example, a commission or bonus may be owed if it has been earned under the applicable plan and rules. The answer can depend on the compensation terms and when the entitlement is triggered.

Employers must also pay wages owed when an employee resigns, is dismissed, is laid off, or otherwise stops working. The ending of employment does not, by itself, erase wages already earned.

Ontario’s final-pay deadline

The ESA sets the deadline for wages owing at the end of employment as the later of seven days after employment ends and the employee’s next regular payday. For instance, if employment ends on June 3 and the next regular payday is June 14, the later date is June 14. If the next payday falls earlier than seven days after the end date, the seven-day date applies instead.

This deadline concerns wages owed, including applicable termination pay and severance pay. It does not mean the employer can indefinitely postpone payment until a convenient payroll cycle. If the employer pays by direct deposit, the employee should confirm that the payment arrived; a pay statement should help show how the amount was calculated.

There can be different arrangements for some amounts, such as vacation pay paid on each paycheque or a valid written agreement about when vacation pay is paid. Check the pay statement and the arrangement rather than assuming all vacation pay must appear as a separate final cheque.

How termination and severance pay differ

Termination pay and severance pay are distinct ESA entitlements. Termination pay is pay instead of the written notice an eligible employee would otherwise receive. The ESA minimum notice period depends on continuous employment and ranges from one week to eight weeks. An employee may receive working notice, termination pay instead, or a combination that meets the ESA requirements.

ESA severance pay is generally available only to an employee with at least five years of service when the employer’s payroll is at least $2.5 million, or when the employer permanently discontinues all or part of its business and at least 50 employees lose their jobs within six months as a result. The ESA calculation is generally one week of regular wages per completed year of employment, with a prorated amount for a partial year, to a maximum of 26 weeks. Statutory eligibility and calculation details matter, so do not assume that every employee with five years’ service qualifies.

These are ESA minimum standards, not a complete assessment of every possible contractual or legal claim. A release, employment agreement, collective agreement, or other circumstances may affect what is payable. For advice about a specific dismissal, consult a qualified employment-law professional.

Deductions and pay statements

Final wages are not necessarily the same as take-home pay. Required statutory deductions, such as income tax, Canada Pension Plan contributions, and Employment Insurance premiums where applicable, may be taken from wages. Other deductions are generally restricted: under the ESA, an employer cannot make a deduction simply because it believes the employee owes money. Specific rules apply, including requirements around written authorization and court orders.

Review the final pay statement for the pay period, gross earnings, vacation-pay balance, termination or severance amounts, and deductions. Compare it with time records, earlier pay statements, and any commission or bonus plan. If a deduction or missing amount is unclear, ask the employer for an itemized explanation in writing.

What to do if final pay is missing or short

Start by checking the employment end date and the next regular payday; the statutory deadline is the later of that payday and seven days after the end date. Then gather records that help identify what is owed:

1. Save pay statements, schedules, time sheets, employment documents, and written communications about the end of employment.
2. List unpaid hours, earned vacation pay, and any other amounts you believe are outstanding, showing how you arrived at the figures.
3. Contact the employer or payroll department in writing and request the missing payment or a clear explanation.
4. If the issue is not resolved, review the Ontario Ministry of Labour’s Employment Standards information and the process for making an ESA claim. Time limits and exceptions can apply, so check current official guidance promptly.

Keep copies of what you send and note the dates of conversations. A disagreement about termination or severance eligibility can involve facts beyond the payroll calculation; an ESA claim may not resolve every issue related to a dismissal.

Frequently Asked Questions

When is final pay due in Ontario?
The deadline is generally the later of seven days after employment ends or the employee’s next regular payday.

Does final pay include unused vacation?
Vacation pay earned and still unpaid is generally payable when employment ends. Check whether some vacation pay was already paid on regular paycheques or under another permitted arrangement.

Do I get termination pay if I quit?
ESA termination pay is generally associated with an employer ending employment without providing the required notice. Resigning does not normally create an entitlement to termination pay, though wages and vacation pay already earned remain payable.

Is severance pay the same as termination pay?
No. They are separate ESA entitlements with different eligibility rules. Some employees may qualify for both, one, or neither.

Can my employer deduct money from my last cheque?
Only deductions allowed by law may be made. An employer’s belief that you owe money does not by itself authorize a deduction; ask for the legal basis and supporting details.

What if my final pay is late?
Confirm the applicable deadline, request payment in writing, and keep your records. If the employer does not resolve the issue, check the Ministry of Labour’s current guidance on filing an Employment Standards claim.

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