Severance Pay Calculator
Calculate your severance pay based on employment period and salary.
About This Tool
The Severance Pay Calculator estimates your legally mandated retirement allowance under Korean labor law. By entering your employment start/end dates and average monthly salary, you can calculate the severance pay you are entitled to upon leaving your job after at least one year of continuous service.
How to Use
- Enter your employment start date.
- Enter your last working day (end date).
- Enter your average monthly wage for the last 3 months before leaving.
- Click Calculate to see your severance pay amount.
Frequently Asked Questions
Who is eligible for severance pay?
Under Korean labor law, any employee who has worked for at least 1 year with an average of 15 or more hours per week is entitled to severance pay. This applies to all types of employment contracts.
How is severance pay calculated?
Severance Pay = Daily Average Wage × 30 × (Total Working Days ÷ 365). Daily Average Wage = Total Wages for Last 3 Months ÷ 90 days.
What is included in the average wage calculation?
The average wage includes base salary, fixed allowances, and regular bonuses. It excludes one-time bonuses, severance pay itself, and non-regular payments.
Is severance pay taxable?
Yes, severance pay is subject to retirement income tax. However, the tax rate is generally lower than regular income tax due to special deductions based on years of service.
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How It's Calculated
Under Korean Labor Standards Act, severance pay is calculated as:
Severance Pay = Average Daily Wage × 30 days × (Total Service Days / 365)
Average Daily Wage = Total wages for the last 3 months ÷ Total calendar days in those 3 months.
Total wages include base salary, fixed allowances, and regular bonuses (annual bonus ÷ 12 × 3). Overtime pay and irregular bonuses may also be included depending on regularity. The calculator computes the gross severance and estimates the retirement income tax using the simplified formula based on years of service.
⚠️ Disclaimer
Severance pay calculations depend on what constitutes 'average wages' under labor law, which can be complex. Bonuses, overtime, and allowances may or may not be included. For disputes or exact amounts, consult a labor attorney or the Ministry of Employment and Labor.
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