๐ฆ Korea Severance Pay Calculator
Estimate your statutory severance pay (ํด์ง๊ธ, toejikgeum) from your start date, last working day and the last three months of wages. You qualify after one year of work at 15+ hours a week.
Estimated severance pay (before tax)
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How to use it
- Enter your start date and your last working day. The legal separation date is the day after your last working day, and the calculator handles that for you.
- Type your monthly gross salary โ it fills in the 3-month total automatically โ or enter the exact 3-month total from your payslips if your pay varied (overtime, night shifts).
- Add any bonuses and annual leave pay received over the past year; only 3/12 of each is counted.
The severance pay formula
Korean statutory severance (Employee Retirement Benefit Security Act) is:
Severance = average daily wage ร 30 days ร (days of service รท 365)
- Average daily wage (ํ๊ท ์๊ธ) = total wages paid in the 3 calendar months before separation รท the number of days in that period (89โ92 days).
- Bonuses and annual leave pay are added at 3/12 of the yearly amount.
- If the average wage comes out lower than your ordinary wage (ํต์์๊ธ), the ordinary wage is used instead.
In plain terms, you receive roughly one month of average pay for every year worked, pro-rated by day after the first year.
Who is eligible
- At least one year of continuous employment with the same employer.
- An average of 15 hours or more per week over each 4-week period.
- Full-time, contract and part-time workers all qualify, and so do foreign workers on any visa โ nationality doesn't matter.
Example
| Item | Value |
|---|---|
| Monthly salary | โฉ3,000,000 (โฉ9,000,000 over 3 months) |
| Days in 3-month period | 92 |
| Average daily wage | โฉ97,826 |
| Service | 3 years (1,096 days) |
| Severance | about โฉ8.8 million |
Tips for foreign workers
- E-9 / H-2 workers โ your employer pays into departure guarantee insurance (์ถ๊ตญ๋ง๊ธฐ๋ณดํ). You claim it when leaving Korea; if it is less than the statutory severance, the employer owes the difference.
- Payment deadline โ severance must be paid within 14 days of leaving unless both sides agree in writing to extend it. Unpaid severance can be reported to the Ministry of Employment and Labor (call 1350, multilingual support available).
- Retirement pension (ํด์ง์ฐ๊ธ) โ if your company runs a DB plan the amount is similar to this formula; under a DC plan it depends on contributions and investment returns.
- IRP account โ severance is usually paid into an Individual Retirement Pension account. You can cancel the IRP and withdraw the money, with retirement income tax withheld.
Estimate for reference only. Retirement income tax (ํด์ง์๋์ธ) is withheld from the actual payment. For an official figure use the Ministry of Employment and Labor calculator or ask HR.
FAQ
Do I get severance pay if I worked less than a year?
No. Statutory severance requires at least one full year (365 days) of continuous employment and an average of 15 hours or more per week.
Are foreigners entitled to severance pay in Korea?
Yes. Severance applies to every worker who meets the one-year, 15-hours-a-week conditions, regardless of nationality or visa type. E-9 and H-2 workers usually receive most of it through departure guarantee insurance.
When must my employer pay severance?
Within 14 days of your separation date. The deadline can only be extended by mutual agreement; late payment incurs 20% annual delay interest.
Is severance pay taxed?
Yes, retirement income tax is withheld, but it is taxed separately from your salary and long service lowers the rate significantly. Receiving it into an IRP defers the tax.
Does overtime count toward severance?
Yes. Overtime, night and holiday pay received in the last three months are part of the average wage. Enter the actual 3-month total from your payslips for an accurate result.