Korean severance pay calculator
Statutory severance from daily average wage — 30 days per year of service, with bonus and leave pay included.
Article 8 of the Employee Retirement Benefit Security Act requires at least 30 days of average wage per year of continuous service. Average wage is the last three months' pay divided by the number of calendar days in that period, which is why it can be 89 days or 92. Annual bonus and the previous year's leave allowance enter at three twelfths of the yearly figure — omitting them is the most common error.
Service and pay
What you enter is saved in this browser, so it is still here next time
Calendar days from start to leaving date; a year is 365.
It varies by month — 89 to 92 days.
Enter the yearly figure; three twelfths enters the average.
Enter the yearly figure; three twelfths enters the average.
Used when it exceeds the average wage (Labor Standards Act Article 2(2)).
Severance
Severance due
₩11,739,130
Daily average wage
₩130,435
Daily wage used
₩130,435
Three-month total including additions
₩12,000,000
Years equivalent
3
Severance = daily average wage × 30 × (days ÷ 365). Omitting bonus and leave allowance is the most common error.
Models the statutory severance system. DC pension schemes are determined by contributions and investment results, not by this formula.
Daily average wage × 30 × days of service ÷ 365
With 1,095 days of service, 12,000,000 paid in the last three months and 92 days in that period, the daily average wage is 12,000,000 ÷ 92 = 130,434.78. Multiply by 30 days and by 3 years of service and severance is 11,739,130, fractions of a won dropped. Days of service are divided by 365 as they are, so two years and a day counts as 2.003 years. The three-month period has 92, 91, 90 or 89 days depending on the months, and must be counted from the calendar — that one division moves the result by 1–3%.
Bonus and leave pay enter at 3/12 of the yearly figure
The annual bonus and last year's leave allowance are added to the three months' pay not as what was actually received in those months but as the yearly total × 3 ÷ 12. A bonus of 4,000,000 and leave pay of 800,000 add 1,200,000, taking the daily wage to 143,478.26 and severance to 12,913,043 — a difference of 1,173,913. It stops severance swinging on whether a bonus happened to fall in the last three months, and leaving it out is the most common error.
If ordinary wage is higher, it is used instead
Enter a daily ordinary wage and the higher of it and the average wage becomes the base. With an average of 130,434 and an ordinary wage of 150,000, severance is 150,000 × 30 × 3 = 13,500,000, and the page notes that ordinary wage was used. The rule exists for people whose average was dragged down by unpaid leave or absence in the final three months. Leave the field at 0 and no comparison is made.
Under a year is 0, and what is left out
With fewer than 365 days of service the statutory severance is 0 and the page says so: 364 days gives 0, 365 gives a year's worth. Retirement income tax, the balance of a DC pension, interim settlements, works rules that pay more, and whether leave periods are excluded from service days are not handled. What goes into the three-month total is also yours to decide — it is pre-tax, and reimbursement-type payments are usually excluded.
Common questions
QReally nothing under one year?
No statutory severance: Article 8 conditions it on a year of continuous service. A works rule or contract offering better terms still applies. It also does not apply to anyone averaging under 15 hours a week over four weeks.
QAverage wage or ordinary wage?
Average wage in principle, but Article 2(2) of the Labor Standards Act treats ordinary wage as the average when the average comes out lower. Absence or unpaid leave in the final three months is what triggers it — this calculator takes the higher of the two automatically.
QWhat about DB and DC pension schemes?
This models the statutory severance system. DB schemes are generally designed to land near this figure, but DC is determined by the contributions the employer paid each year and how they were invested, which this formula says nothing about. Check which scheme applies first.
QWhat is severance on 4,000,000 a month after two years?
Three months' pay of 12,000,000 over 92 days is 130,434 a day; times 30 and times 2 years is 7,826,086. It is close to the usual "a month per year", but because of the division by 92 it is not exactly two months' salary (8,000,000). A bonus adds a further 3/12.
QHow do I count the days in the three-month period?
Calendar days over the three months ending the day before departure. Leaving on 4 September, the period is 4 June to 3 September, 92 days; leaving on 1 March, it is 1 December to 28 February, 90 days. The page takes that number as an input, and since the average divides by it, a short month in the period makes it slightly larger.