Liquidation Calculator 2026 - South Korea
Calculate Korean settlement: $1/month average salary per year of service. Minimum requirement 1 year. Includes pro-rated calculation for partial period, estimated tax on settlement and net amount.
Workplace Data
Liquidation calculation
Come utilizzare Calcolatore Liquidazione 2026 - Corea del Sud
Insert average monthly salary for the last 3 months
The Korean liquidation is based on the average daily wage of the last 3 months. Insert the average monthly salary (including benefits, excluding extraordinary bonuses unless otherwise indicated).
Insert years and months of service
Insert whole years worked and additional months. A minimum of one year of service is required, along with a minimum of 15 hours per week to qualify for settlement.
Configure Bonus Inclusion
If annual bonuses must be included in the settlement calculation (1/12 of the annual bonus is added to the daily salary base), activate this option and enter the annual bonus amount.
Verify settlement and estimated tax
Check the settlement for full years, pro-rated amount for partial year, total settlement, estimated settlement tax and net amount.
Suggerimenti
- Transfer settlement to an IRP account to defer taxes: only paid at withdrawal time, often with a lower rate in retirement.
- Minimum required by law (30 days/year) applies to regular employees. Some companies offer enhanced severance packages in employment contracts.
- If your salary has varied significantly over the last 3 months, the settlement may be higher or lower than 1 month of current salary: use the real average of the last 3 months.
- Save documentation for all salary components: disputes over pay calculations are common and require detailed payroll stubs.
Domande frequenti
What is Korean severance pay?
Korean severance pay (exit bonus) is a mandatory lump sum payment under the Labor Standards Act. It equals 30 days of average wages for each year of service. All employees working 1+ year with 15+ hours/week average are entitled. It is paid upon any termination: resignation, dismissal, retirement, or contract end.
How is the average daily wage calculated?
Average daily wage = (Total wages in the last 3 months) ÷ (Total calendar days in those 3 months), including base salary, allowances, and pro-rated bonuses.
What is the difference between severance pay and Individual Retirement Plan?
Traditional Severance (DB/DC Pension) is paid as a lump sum or accrued in a corporate account. Since 2022, companies with 10+ employees must use a retirement pension scheme (Individual Retirement Pension). The IRP transfers severance to an individual retirement account with tax-deferred benefits.
How is severance pay taxed?
Severance pay receives preferential tax treatment as retirement income. The tax is calculated by deducting service duration deduction, annualizing the remaining amount, applying progressive income tax rates, and then de-annualizing it back. The effective rate is significantly lower than equivalent salary income.
Does severance pay apply to part-time employees?
Part-time workers with less than 15 hours of work per week on average are not eligible for mandatory severance pay. Part-time workers who work 15 hours or more per week on average are eligible for severance pay under the same terms as full-time employees.