Severance Pay Calculator
Enter your monthly average wage and tenure (years/months/days) to estimate the statutory pre-tax Korean severance pay.
Average gross monthly pay over the 3 months before separation, including bonuses and accrued leave. Use ordinary wage if it is higher.
Estimated severance (pre-tax)
15,000,000KRW
- Daily average wage
- 100,000KRW
- Total tenure days
- 1825 days
- Eligibility
- Eligible (1+ year)
- Calculated using 1825 total tenure days
What is Korean severance pay?
Severance pay is a lump-sum benefit paid under the Employee Retirement Benefit Security Act when an employee with 1+ year of continuous service separates. It is computed as the daily average wage × 30 × tenure-days / 365. Workers with less than 1 year of tenure are not entitled by law. If the employer participates in a DC retirement pension plan, the actual benefit is the employer's annual contributions plus investment returns, not this formula.
Formula
Frequently asked questions
- Does less than 1 year really mean no severance?
- Statutory severance only applies to employees with at least 1 year of continuous service AND at least 15 weekly working hours. Employers can voluntarily pay severance or a goodwill amount to short-tenure employees, but they are not legally required to.
- How exactly is the daily average wage computed?
- By dividing total wages paid in the 3 months before separation by the actual day count of that period. This calculator simplifies it to monthly average wage ÷ 30. If the ordinary wage exceeds the average wage, the ordinary wage is used instead.
- How much will retirement income tax take?
- Retirement income tax in Korea uses lower effective rates than ordinary income tax thanks to a tenure-based deduction and a converted-income deduction. This calculator outputs the pre-tax amount only. Use Hometax (NTS) or your HR team for an after-tax estimate.
- How does a DC pension differ from this calculation?
- DB (defined benefit) plans match this formula. DC (defined contribution) plans accrue at least 1/12 of annual wages each year plus investment returns. DB favors employees whose wages rise faster than the plan's investment return; DC favors the opposite.
For reference only. Daily wage is simplified to monthly wage ÷ 30; the legal definition uses the 3-month wage total ÷ actual day count, and the higher of average wage or ordinary wage applies. Retirement income tax and DC plan investment returns are not modeled. Confirm exact amounts with your payroll team or a labor attorney.