Severance Pay Calculator (Korea) – Statutory Retirement Pay
Estimate the severance pay a Korean employer owes you when you leave after a year or more. Add your bonus and unused-leave pay for a figure closer to your real payout.
3/12 of this amount is added to the 3-month wage total.
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How Korean Severance Pay Is Calculated
Under Article 8 of the Employee Retirement Benefit Security Act, an employer must pay at least 30 days of average wages for every year of continuous service. The formula is: average daily wage × 30 days × (days of service ÷ 365). Because service is counted in days, every extra day you work adds to the total, not only full years.
What Counts as the Average Daily Wage
The average daily wage is the total wages paid in the three calendar months before your retirement date, divided by the number of days in that period (usually 89 to 92). Annual bonuses and the allowance for unused annual leave are added at 3/12 of the yearly amount, which is why entering them can noticeably raise the result.
Who Is Eligible
You qualify if you worked for the same employer for at least one year and averaged 15 or more contracted hours per week. Contract workers, part-timers, and foreign workers are covered under the same rule. Workplaces of every size must pay it, including those with fewer than five employees.
Timing and Taxes
The employer must pay within 14 days of your departure unless you agree to a later date. Severance is taxed as retirement income, which uses a separate, lower-rate schedule than ordinary salary, so the amount deposited will be somewhat lower than the pre-tax estimate shown here. If you are close to the one-year mark, adjusting your last day by even a few days can decide whether you receive anything at all.