Severance Pay (퇴직금) Calculator
✓ 2026 statutory formula + retirement income tax · Korea Insider ProEstimate your statutory severance (퇴직금) and what lands in your account after retirement income tax. For employees with 1+ year of service.
Gross monthly pay (base + fixed allowances). Use your last 3 months' average.
Statutory severance (before tax)
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| 1-day average wage (평균임금) | — |
| Severance = avg wage × 30 × (days/365) | — |
| Retirement income tax base (과세표준) | — |
| Retirement income tax (퇴직소득세) | — |
| Local income tax (지방소득세 10%) | — |
| Net severance (after tax) | — |
| Effective tax rate | — |
- Statutory minimum. If your ordinary wage (통상임금) per day is higher than the average wage, the law uses the higher figure — your actual payout may be larger.
- DB plan / direct payout: tax is withheld as shown. DC plan or IRP transfer: tax is deferred — rolling into an IRP postpones (and, if taken later as a pension, reduces by 30–40%) the retirement income tax.
- Severance applies to employees with ≥1 year of continuous service working ≥15 hours/week, regardless of nationality. It must be paid within 14 days of leaving.
Sources (primary)
Employee Retirement Benefit Security Act (근로자퇴직급여 보장법) §8; National Tax Service — retirement income tax method (근속연수공제·환산급여공제, 소득세법 §48, §55): nts.go.kr · moel.go.kr · Full guide: Korea severance pay rules
Employee Retirement Benefit Security Act (근로자퇴직급여 보장법) §8; National Tax Service — retirement income tax method (근속연수공제·환산급여공제, 소득세법 §48, §55): nts.go.kr · moel.go.kr · Full guide: Korea severance pay rules
Korea's tax tables change every year.
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