Home › Working and studying in Korea at a glance
Severance pay in Korea: who gets it, the 30-days-per-year formula, the 14-day deadline and a calculator for foreign workers
Numbers checked against the official source on 2026-10-19
Under the Employee Retirement Benefit Security Act, an employer must pay severance to a worker who leaves after at least one year of continuous service, and the standard amount is 30 days of average wages for every year of service. Workers whose continuous service is under 1 year, or whose scheduled hours average under 15 hours a week over 4 weeks, are carved out of the employer's duty to set up a severance system. The employer must pay within 14 days of the day the right arises, unless both sides agree to extend. The Act speaks of "workers" under the Labor Standards Act and does not mention nationality; the government's Easy Law pages say that employers of foreign workers satisfy it through a departure guarantee insurance. The calculator below uses only that formula.
Law text: Employee Retirement Benefit Security Act (근로자퇴직급여 보장법), shown on the National Law Information Center as "[시행 2026. 7. 1.] [법률 제21475호, 2026. 3. 17., 일부개정]" (in force 2026-07-01); Labor Standards Act Article 2 shown as in force 2026-10-08. Read on 2026-10-19.
The rule in four lines
- Who is covered. Article 4 requires the employer to set up a retirement benefit system for departing workers, but not for a worker whose continuous service is under 1 year or whose scheduled weekly hours, averaged over 4 weeks, are under 15.
- How much. Article 8(1): at least "30일분 이상의 평균임금" (30 days or more of average wages) for each 1 year of continuous service.
- What "average wage" means. Labor Standards Act Article 2(1) item 6: the total wages paid to the worker in the 3 months before the day the reason for calculating it arose, divided by the total number of days in that period. If the worker has been employed under 3 months, the same method applies. If that figure is lower than the worker's ordinary wage, the ordinary wage is used instead (Article 2(2)).
- When it must be paid. Article 9(1): within 14 days of the day the payment reason arose (normally the day you leave); the parties may agree to extend it for special circumstances. Article 9(2) says severance is to be paid by transfer into the worker's designated personal retirement pension (IRP) account, with exceptions set by decree such as a worker retiring at 55 or older.
Severance calculator
Enter figures from your payslips. The calculator does exactly this: average daily wage = total wages in the last 3 months / days in those 3 months; severance = average daily wage x 30 x years of continuous service. It handles whole years only, because the Act states the amount "for each 1 year" and does not say how partial years are counted. It does not compute ordinary wages; if you know your ordinary daily wage, enter it and the calculator uses the higher figure as Article 2(2) requires.
This is the statutory formula only. It does not include pension-plan payouts (defined-benefit or defined-contribution), tax on retirement income, or how a partial year is counted. Which items count as "wages" is a question for the Ministry of Employment and Labor.
Foreign workers
- The Employee Retirement Benefit Security Act defines "worker" by reference to the Labor Standards Act, whose definition is anyone who provides work to a business for wages "regardless of the type of occupation" ("직업의 종류와 관계없이"). It contains no nationality condition.
- The government's Easy Law page on foreign workers' labour protection says the Act applies to any business or workplace employing workers, except businesses employing only family members living together and employment in a household (Article 3).
- The Labor Standards Act bars discrimination on grounds of nationality (Article 6), as the same page summarises.
- E-9 and H-2 workers: Easy Law says employers of foreign workers must take out a departure guarantee insurance or trust to secure severance, and doing so counts as setting up the severance system under the Act. A foreign worker who has worked continuously for 1 year or more can claim the insurance when returning home. If the insurance payout is lower than the severance owed under the Act, the employer must pay the difference.
- The same page puts the right to claim severance to prescription after three years if unused ("3 years" extinctive prescription).
Where the pages differ
| Item | Law (in force 2026-07-01) | Easy Law English page | What we show |
|---|---|---|---|
| Who is covered | Duty to set up a system excludes workers with under 1 year of service or under 15 weekly hours (4-week average) | "after at least one year of continued service"; does not mention the 15-hour carve-out; page title carries the label "(구)" (old) | The dated law is the headline. The English page is consistent on the 1 year rule. |
| 30 days of average wage per year | Article 8(1) | Same | Agree. |
| 14 days to pay | Article 9(1) | Same | Agree. |
The Ministry of Employment and Labor's English FAQ page we tried returned an error, so it is not used. See also Minimum wage in Korea 2026 and year-end tax settlement. If your employer does not pay, ask the labour office (the Ministry's contact details are on its site). This page is a summary, not legal advice.
Checked 2026-10-19.
Official sources
- National Law Information Center — Employee Retirement Benefit Security Act, Article 4 — 1 year and 15-hour carve-outs; in force 2026-07-01 (checked 2026-10-19)
- National Law Information Center — Employee Retirement Benefit Security Act, Article 8 — 30 days of average wage per year of continuous service (checked 2026-10-19)
- National Law Information Center — Employee Retirement Benefit Security Act, Article 9 — payment within 14 days; transfer to an IRP account (checked 2026-10-19)
- National Law Information Center — Employee Retirement Benefit Security Act, Article 2 — definitions: worker, average wage by reference to the Labor Standards Act (checked 2026-10-19)
- National Law Information Center — Labor Standards Act, Article 2 — average wage = 3-month wages / total days; ordinary wage floor; in force 2026-10-08 (checked 2026-10-19)
- Easy to Find, Practical Law (Ministry of Government Legislation) — Foreign Workers' Employment: protection under labor laws — English summary: Act applies to workers, nationality non-discrimination, departure insurance, 14 days, 30 days; labelled (구); no revision date printed (read on 2026-10-19) (checked 2026-10-19)
- Easy to Find, Practical Law — Employment of Foreign Workers — English: Departure Guarantee Insurance after 1 year, employer pays any shortfall; no revision date printed (read on 2026-10-19) (checked 2026-10-19)
Prices change. If an official page shows a different number from this page, the official page wins — and please tell us so we can fix it.