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Severance Pay Calculator

Enter your start date end date and last 3-month salary to calculate estimated severance pay and tax.

1Service Period

2Salary Information

KRW
KRW
KRW
KRW

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What is the Korean Severance Pay Calculator?

Everything employers and employees in Korea need to know about severance pay (퇴직금). This calculator takes your start date, end date, and last 3 months of salary to compute daily average wage, estimated severance, retirement income tax, and net payout down to the won. Under Korea's Labor Standards Act, any worker with 1+ year of continuous employment and 15+ hours per week is eligible regardless of employment type.

3-Step Korean Severance Pay Formula

Severance = Daily Average Wage × 30 × Days Worked ÷ 365

The daily average wage is the total wages earned in the 3 months before retirement including base pay, allowances, bonuses, and annual leave pay divided by the total calendar days in that period, typically 89 to 92 days.

If the average wage is lower than the ordinary wage which is the predetermined fixed pay, the ordinary wage applies to protect the worker under Korean labor law.

Since April 2022, severance in Korea must be paid into an IRP (Individual Retirement Pension) account. Exceptions: employees aged 55+ at retirement or severance amounts of 3M KRW or less may receive payment to a regular account.

Recommended For

  • Before resigning: Check your estimated severance payout in advance
  • Employers: Calculate the legally required severance for departing employees
  • Part-timers & contractors: Verify your severance eligibility
  • IRP setup: Open the required account before your severance is due
  • Labor consultation prep: Use calculation results as reference material

Frequently Asked Questions

Yes. Under Korean law, all employers including those with fewer than 5 employees are required to pay severance. Any contract clause waiving severance pay is legally void under Korea's Labor Standards Act. Violations may result in up to 3 years of imprisonment or a fine of up to 30 million KRW.

Yes. Since April 2022, IRP account deposit is the default. You should open one at a bank or brokerage before retirement. Exceptions: employees aged 55+ at retirement or severance amounts of 3M KRW or less may receive payment to a regular account.

Yes. If you worked continuously for 1+ year with an average of 15+ hours per week over 4 weeks, severance applies regardless of employment type. Contract renewal periods are combined for tenure calculation.

Generally prohibited. Exceptions are allowed only for legally defined reasons such as home purchase, long-term lease deposits, extended medical treatment (6+ months), bankruptcy, or natural disasters. After mid-employment settlement, the tenure clock resets.

Apply for the Substitute Payment (대지급금) program through the Ministry of Employment and Labor or KCOMWEL. The government pays unpaid wages and severance on behalf of the employer. Applications must be filed within 2 years of retirement, covering up to 7M KRW in severance and 10M KRW in unpaid wages.

Payment must be made within 14 days of the retirement date. Without a valid reason, exceeding 14 days incurs 20% annual late interest. The deadline can be extended by mutual written agreement between employer and employee.