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Korean Severance Pay Calculator
Enter your start date and your last working day, and the calculator works out your days of service and the correct averaging period for you. It counts 3/12 of your bonuses and annual leave pay, and if your average wage (평균임금) comes out lower than your ordinary wage (통상임금), it switches to the ordinary wage the way the law requires.
Enter the last day you actually worked, not your separation date (the day after). The averaging period for your average wage is calculated from this date.
| Period | Days | Base pay | Other allowances |
|---|---|---|---|
| Total | 0 | 0 won | |
Use gross figures, before tax and the four insurances. The total payable line on your payslip is what you want. Fixed allowances like meal and transport money go under other allowances. If you are not sure how your pay splits up, put the whole month's amount in the base pay box — the result comes out the same.
Every bonus and incentive payment you received in the 12 months before you left, added together. Only 3/12 of it goes into the average wage.
Pay you received for leave that accrued the previous year and went unused. Only 3/12 of this counts too. Do not include the leave settlement paid out when you leave.
Your base pay plus the allowances that arrive every month at a fixed amount, such as meal money or a position allowance. On a 40-hour week, contractual monthly hours come to 209. Leave out anything that moves with performance.
Estimated severance pay (before tax)
See the full calculation
Who gets severance pay
Article 4 of the Employee Retirement Benefit Security Act (근로자퇴직급여 보장법) sets two conditions, and you have to meet both. You need at least one year of continuous service, and your contractual hours must average 15 hours a week or more over any four-week period. Miss either one and no severance pay (퇴직금) arises.
The part people usually get wrong is that workplaces with fewer than five employees owe severance pay too. Annual leave and overtime premiums do not apply at businesses that small, but severance sits in the Employee Retirement Benefit Security Act rather than the Labor Standards Act (근로기준법), so the size of the company makes no difference. Part-timers, fixed-term staff and hourly workers are all covered on the same two conditions.
How severance pay is calculated
The statutory floor is 30 days' average wage for each year of continuous service. Written as a formula, that is:
Severance pay = daily average wage × 30 days × (days of service ÷ 365)
So everything hangs on what your daily average wage is taken to be. That is also where most people quietly lose money.
The average wage is divided by real days, not by 90
Your average wage is the total pay you received in the three months before the date you left, divided by the total number of days in that period. Total days here means calendar days, not days worked. So it is never a flat 90 — depending on which months you catch, it lands somewhere between 89 and 92. That is why someone whose period includes February ends up with a slightly different average wage from someone who leaves in the summer. This calculator reads your dates and uses the real day count.
Leaving out bonuses and annual leave pay costs you money
Plenty of people enter three months of salary and stop there, but bonuses and annual leave pay belong in the average wage as well. Not the full amount, though — only 3/12 of it, meaning the share that corresponds to three months.
For bonuses, add up everything you received in the 12 months before you left and take 3/12 of that. Even if no bonus landed in your final three months, it still counts as long as it fell within the year. For annual leave, the figure is 3/12 of what you were paid for leave that accrued the previous year and went unused. The leave settlement you get on the way out is different — it only comes into being because you are leaving, so it stays out of the average wage.
If your average wage is lower than your ordinary wage, the ordinary wage is used
This is the safety net in Article 2(2) of the Labor Standards Act. If you took unpaid leave in your last few months, missed a lot of days, or your allowances happened to be unusually thin, your average wage comes out below normal. When that happens the ordinary wage acts as the floor and the calculation has to use it instead.
It is worth turning the ordinary wage comparison on. The calculator then works out both figures, applies whichever is higher, and tells you in the results which one it used.
How to work out your ordinary wage
Your ordinary wage is the pay agreed for your contractual work, paid regularly and uniformly. In most cases that means your base pay plus the fixed monthly allowances such as meal money or a position allowance. Performance bonuses that move with results, and overtime pay that depends on hours actually worked, are not part of it.
The hourly ordinary wage is your monthly ordinary wage divided by your contractual monthly hours. For a 40-hour week that is 209 hours. Here is where 209 comes from: an average month holds 365 ÷ 12 ÷ 7 = 4.345 weeks, and a paid week is 40 contractual hours plus 8 hours of weekly holiday allowance, so 48 × 4.345 = 208.6 hours, rounded up to 209. The 2026 minimum wage converts to 2,156,880 won a month for the same reason — 10,320 won × 209 hours.
One development worth knowing about. A Supreme Court en banc decision on 19 December 2024 changed how ordinary wage is judged. Regular bonuses used to fall outside the ordinary wage if they came with a condition like "paid only to people still employed on the payment date"; now such a condition no longer matters, as long as the bonus is paid regularly and uniformly. If you receive a regular bonus, it is worth checking whether your company has updated its figures. The decision applies to work performed from 19 December 2024 onwards.
What foreign workers in Korea should know
Severance pay is a legal entitlement, not something your employer chooses to give you. If you worked for the same employer for a year or more and averaged 15 hours a week or more, you are owed it, and your nationality and visa status make no difference — E-9, E-7, D-10, F-2, F-4, F-6, the rule is the same. The money must be paid within 14 days of your last day, unless you and your employer agree to extend that deadline.
If your employer stalls or refuses, the usual route is a complaint to the regional Employment and Labor Office (고용노동부 지방고용노동관서) covering the district where you worked. The Ministry of Employment and Labor also runs a counselling line on 1350, dialled without an area code, and interpretation is available in several languages, though the hours and the languages on offer vary. It helps to have your contract, your payslips and anything that shows your start and end dates ready before you call.
Two other things are worth checking. Some employers run a retirement pension (퇴직연금) scheme, either defined benefit (DB) or defined contribution (DC), instead of paying a lump sum themselves; in that case the money comes from the pension provider rather than the company, so find out which scheme you are in and who to contact. And leaving the country does not forfeit what you are owed — the entitlement survives your departure, so it is worth sorting out a bank account you can still reach from abroad. Separately from severance, if you are a national of a country that has a social security agreement with Korea or extends the same treatment to Koreans, you may be able to claim a lump-sum refund of your National Pension (국민연금) contributions when you leave, which is worth confirming directly with the National Pension Service. All of this is general information rather than legal advice, and your own contract and circumstances can change the answer.
Common problems
My figure does not match what the company paid
The most common reason is that bonuses and annual leave pay were left out. The next is that no ordinary wage comparison was done. If you have entered both and the gap is still large, you can take your payslips to the company and ask for a written breakdown of how they calculated it.
I fell a few days short of a year
Under a year of continuous service means no severance pay arises. That said, a probation period counts towards continuous service, and a short break followed by a return can sometimes be treated as continuous depending on the circumstances. If you are only a few days off, it is worth asking a labour attorney or the Ministry of Employment and Labor counselling line on 1350.
I am enrolled in a DC retirement pension
Under a defined contribution (DC) plan the company pays in at least 1/12 of your annual wage each year and the final amount depends on how those contributions performed, so it will differ from what you see here. This calculator covers the lump-sum severance system and the statutory minimum for a defined benefit (DB) plan.
How much tax comes off
Retirement income tax runs on its own system, with a length-of-service deduction and a converted-income deduction, so it does not work like tax on your salary. The rate drops sharply the longer you stayed, so long-serving employees often pay less than they expect. This calculator shows the pre-tax amount.
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