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Retirement calculator
Calculate severance pay from your hire date, leave date and last 3 months of wages, and compare retirement income tax and the tax savings from receiving it as an IRP pension.
Employment period
Enter the day after your last day of work.
Pre-departure wages (pre-tax)
Average monthly amount you received over the 3 months before leaving
If you know the total from your pay slips, enter it directly. If left blank, monthly pay × 3 is used.
Bonuses received in the 12 months before leaving
Pay received for annual leave you could not use in the year before leaving
If the daily average wage is lower than the daily ordinary wage, the ordinary wage is used (based on a 40-hour week and 209 hours a month).
Compare payout methods
Enter your values and press Calculate severance pay
Estimated severance pay (pre-tax)
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Daily average wage
Retirement income tax (including local tax)
Lump-sum take-home amount
Tax comparison: lump sum vs pension payout
How to use
Severance pay is calculated from the average wage, and retirement income tax gets lighter the longer you have worked. If you move it to an IRP and take it as a pension, you can cut the tax further.
Enter your hire date and leave date (the day after your last day of work), and it calculates days employed and years of service.
Enter your last 3 months of wages and a year's worth of bonuses and annual leave pay. Only 3/12 of bonuses and annual leave pay are counted.
Check the tax difference between taking a lump sum and receiving the money in installments as a pension from an IRP.
Severance pay is available to employees who have a continuous service period of at least 1 year and work an average of 15 hours or more a week over 4 weeks (Articles 4 and 8 of the Act on the Guarantee of Employees' Retirement Benefits). If the daily average wage is lower than the daily ordinary wage, the ordinary wage is treated as the average wage (Article 2, Paragraph 2 of the Labor Standards Act). Years of service are counted with any fraction under one year rounded up to a year. Local income tax is 10% of retirement income tax.
If you move your severance pay to a pension account such as an IRP, you do not pay retirement income tax right away (tax deferral), and pay it in installments as you receive the pension. Through pension year 10 you pay 70% of the original tax, in years 11 to 20 you pay 60%, and from 2026, from year 21 onward you pay only 50%. This calculator assumes the principal is received in equal installments over the payout period and does not include investment returns.
Assumes the three months before leaving paid three times the monthly salary, no bonus or leave pay, and a lump-sum payout. Amounts are in Korean won.
US dollar figures are rough conversions at an illustrative rate of 1,400 won per dollar and are not live exchange rates. Service-year and converted-pay deductions keep the tax small compared with the payout; the calculator also compares paying out through an IRP pension.
Under Article 8 of the Employee Retirement Benefit Security Act, severance is at least 30 days of average wages for each year of continuous service. Average wages are the total pay for the three months before leaving (plus 3/12 of bonuses and leave pay) divided by the number of days in that period. Retirement income tax applies the service-year deduction, converted-pay deduction and basic tax rates of the Income Tax Act, plus 10% local income tax. Reference date: 2026, checked October 9, 2026.
The Korean severance rules apply to foreign employees in the same way: if you worked at least one year and at least 15 hours a week on average, you are owed at least 30 days of average wages for each year of service, payable within 14 days of leaving.
Workers on E-9 and H-2 visas usually receive this through the departure guarantee insurance (출국만기보험) the employer must buy; if it pays less than the legal severance, the employer owes the difference.
Rules as of November 2026. Check with your employer, the National Tax Service or NPS for your own case.
Statutory severance pay requires a continuous service period of at least 1 year. If your company's rules or employment contract offer better terms, those apply.
Under the Ministry of Employment and Labor's calculation method, the leave date is the day after your last day of work. For example, if you worked through Sept 30, your leave date is Oct 1.
The average wage is calculated from wages in the 3 months before leaving, so for bonuses and annual leave pay received once a year, only 3 months' worth (3/12) is added.
When you transfer it to an IRP, you do not pay retirement income tax at that point, and when you receive it as a pension after age 55, you pay only 70% of the original tax (pension year 10 or less), 60% (years 11 to 20) or 50% (year 21 onward), depending on the pension year. If you withdraw it as a lump sum midway, there is no tax reduction.
The actual amount can differ depending on company rules, excluded periods (such as parental leave), the type of retirement pension (DB or DC) and how wage items are interpreted. For the exact amount, check with your company's HR team or the Ministry of Employment and Labor helpline (1350).
Results are estimates based on your inputs and simplified assumptions, and are for reference only, not a basis for investment decisions.
Last updated: November 2, 2026
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