Who is eligible?
Every employee in Korea who worked 1 year or more continuously with an average of 15 hours or more per week, at a workplace of any size, including foreign workers. It must be paid within 14 days of leaving unless both sides agree to extend.
Formula
Average daily wage = (pay for the last 3 months + bonuses × 3/12 + annual leave pay × 3/12) ÷ number of calendar days in those 3 months.
Severance pay = average daily wage × 30 × (days employed ÷ 365).
Example: worked 3 years (1,096 days), 3,000,000 won a month, last 3 months = 92 days → average daily wage 97,826 won → 97,826 × 30 × 1,096 ÷ 365 ≈ 8.81 million won.
FAQ
Is severance pay taxed?
Yes, retirement income tax is withheld, but it is much lower than regular income tax. This calculator shows the amount before tax.
I am an E-9 worker. Is my severance different?
Your employer pays into Departure Guarantee Insurance (출국만기보험), which you claim when you leave Korea. If it is less than your legal severance, the employer must pay the difference.
What if my average wage is very low in the last 3 months?
If the average daily wage is lower than your ordinary daily wage (for example after unpaid leave), the higher ordinary wage is used instead.