South Korea severance pay
Calculate the statutory severance pay in South Korea (퇴직금): 30 days of average wage for each year of service, with the eligibility check and an estimate of the retirement income tax.
South Korea — Employee Retirement Benefit Security Act art. 4 and 8, Labor Standards Act art. 2 (average wage) and Income Tax Act art. 48 and 55 (retirement income tax). Rules in force on 10/24/2026.
Estimate for guidance only: check the official sources or a licensed professional before relying on it.
Frequently asked questions
Who is entitled to severance pay (퇴직금)?
Any employee with at least 1 year of continuous service and an average of 15 or more scheduled hours a week, whatever the reason for leaving, including resignation.
What is the average wage (평균임금)?
All wages paid in the 3 calendar months before the day after your last working day, divided by the number of days in that period. Three twelfths of the bonuses and of the unused-leave allowance of the last year are added.
Why compare with the ordinary wage (통상임금)?
If the average wage is lower than the ordinary wage, for example after unpaid leave, the Labor Standards Act uses the ordinary wage instead.
How is the retirement income tax calculated?
A service-years deduction is subtracted, the rest is converted to a 12-year-equivalent pay, a second deduction is applied, the progressive rates are applied and the result is scaled back by years of service; local income tax adds 10 %.
When must the employer pay?
Within 14 days after you leave, unless both sides agree on a later date.
Related calculators
How the South Korea severance pay is calculated
This calculator estimates the statutory severance pay (퇴직금) due to an employee in South Korea under the Employee Retirement Benefit Security Act, art. 4. The right applies to employees with at least 1 year of continuous service who work an average of 15 or more scheduled hours a week, whatever the reason for leaving. Enter the hire date, the last working day, the scheduled hours and working days per week, the wages of the last 3 months, the bonuses and the unused-leave allowance paid in the last 12 months and, optionally, the monthly ordinary wage (통상임금). The page shows the eligibility check, the gross severance pay, the average daily wage in detail and, if you wish, the estimated retirement income tax (퇴직소득세) and the amount left after it.
The average daily wage (평균임금) is the sum of the wages of the 3 months before the day after the last working day, plus 3/12 of the bonuses and 3/12 of the unused-leave allowance paid in the last 12 months, divided by the number of calendar days of that period (Labor Standards Act art. 2(1)6). When the ordinary daily wage is higher, the law uses it instead (art. 2(2)). Severance is the daily wage × 30 × days of service ÷ 365 (Employee Retirement Benefit Security Act art. 8), truncated to the won. The retirement income tax follows Income Tax Act art. 48 and 55 with the tables in force since 2023: a service-years deduction, conversion to a yearly pay, a second deduction, the progressive rates and scaling back by the years of service, plus 10 % local income tax.
Example: hired on 2 March 2021, last working day 30 September 2026, wages of ₩ 4,000,000 a month, ₩ 6,000,000 of bonuses and ₩ 1,200,000 of unused-leave allowance. The average daily wage is ₩ 13,800,000 ÷ 92 days = ₩ 150,000.00; with 2,039 days of service the severance is ₩ 25,138,356. The estimated retirement income tax is ₩ 339,320 plus ₩ 33,930 of local income tax, leaving ₩ 24,765,106. Limitations: the result is the statutory minimum only. Company DB or DC pension plans, the deferral of tax through an IRP account, interim settlements and wage items that the law excludes from the average wage are not modelled; confirm the figures with the Ministry of Employment and Labor or a licensed labor attorney.