Severance Pay Calculator

The formula is: Severance Pay = Average Daily Wage × 30 × (Total Service Days / 365). The average daily wage is calculated as: (3-month base salary + prorated annual bonus + prorated unused leave pay) / number of calendar days in those 3 months. This ensures that bonuses and leave pay earned throughout the year are properly reflected in the severance calculation.

Any employee who has worked continuously for at least one year (365 days) at a workplace with five or more employees is entitled to statutory severance pay upon separation, regardless of the reason for leaving (voluntary resignation, dismissal, or retirement). Contract workers who meet the same criteria are also eligible.

Yes. Under Korean Labor Standards Act Article 2, the average wage used to calculate severance includes regular wages plus all amounts paid in the three months before separation. Annual bonuses are prorated on a 3/12 basis and added to the three-month wage base. This calculator handles the proration automatically when you enter your annual bonus amount.

Yes. If you have unused annual leave for which you received monetary compensation (연차수당), this amount is also prorated and included in the average wage calculation for severance purposes. Enter the annual leave pay amount you received or expect to receive and the calculator will include the 3-month prorated portion.

Under Korean labor law, employees who work less than one year (less than 365 continuous days) are not entitled to the statutory old-age severance pension. However, you may be entitled to a prorated refund of any retirement pension contributions if your employer operates a defined-contribution (DC) or individual retirement account (IRP) scheme. Check with your employer's HR department.

Since 2012, Korean employers can fulfill their severance pay obligation by establishing a company-managed defined-benefit (DB) pension or a defined-contribution (DC) plan instead of paying lump-sum severance. If your employer uses a DC plan or IRP, funds accumulate in your individual account during employment. The calculator estimates the traditional lump-sum equivalent, which is the legal minimum.

The three-month window is the calendar period ending on your last day of employment. The calculator takes your end date, subtracts exactly three months to find the start of the window, and counts the actual calendar days in that specific three-month period (which may be 89, 90, 91, or 92 days depending on which months are included). Using actual calendar days rather than 90 days fixed is required for legal accuracy.

Yes, with some conditions. Fixed-term (계약직) and part-time workers (단시간 근로자) who have worked continuously for at least one year are eligible for severance pay proportional to their working hours. For part-time workers, severance is calculated based on actual hours worked relative to a full-time schedule, then scaled proportionally.