Calculators

Korea Severance Pay Calculator

100% local v1.0.0

Statutory severance pay from your last three months of wages, and the tax on taking it as a lump sum.

Employment

days

Wages before tax

KRW
KRW
KRW
KRW
days
KRW

Severance pay

Estimated severance pay —

—Days of service
—Daily average wage
—Days in the 3 months
Averaging period—
Last working day—

Severance pay = daily average wage × 30 × days of service ÷ 365, the Ministry of Employment and Labor formula. Your employer's payroll records decide the actual amount.

Tax on a lump sum

Years of service for tax—
Retirement income tax—
Local income tax—
Severance pay after tax —

Since July 2026 severance pay normally goes into an individual retirement pension (IRP) account, where this tax is deferred until you withdraw the money. The figure here is the tax on a lump-sum withdrawal, with no non-taxable part, executive cap, earlier interim settlement or foreign tax credit.

Formula and sources
  • Eligible: at least one year of continuous service and 15 hours a week or more on a four-week average (Employee Retirement Benefit Security Act, Article 4).
  • Daily average wage = (wages of the last 3 months + yearly bonuses × 3/12 + annual-leave pay × 3/12) ÷ days in those 3 months; the daily ordinary wage replaces it when larger (Labor Standards Act, Article 2).
  • Years of service for tax count every started month and round up to whole years.
  • Tax: service-years deduction, then the pay converted to a 12-year basis, its own deduction, the basic income tax rates of 6% to 45%, and back to the actual years (Income Tax Act, Articles 48 and 55). Local income tax adds 10%.
  • Amounts under 1 KRW are dropped from the severance pay and the tax base, under 10 KRW from each tax.

Sources: Ministry of Employment and Labor calculator, Employee Retirement Benefit Security Act, Labor Standards Act and Income Tax Act (law.go.kr).