How is severance (Toeijikgeum) calculated in South Korea?

Under the Employee Retirement Benefit Security Act, statutory severance is 30 days of average wage for each year of continuous service. The average wage is your total pay over the final three months — including regular bonuses and allowances — divided by the number of calendar days in that period, giving an average daily wage that is then multiplied by 30 and by your years of service.

Who qualifies for severance pay?

Any employee who has worked continuously for the same employer for at least one year and averages 15 or more working hours a week is entitled to severance on leaving, regardless of whether they resign or are dismissed. Workers with less than one year of continuous service do not have a statutory severance entitlement.

What counts toward the average wage?

The average wage uses total remuneration in the last three months: base salary plus regular allowances and the pro-rated portion of bonuses and other periodic payments. One-off, irregular payments are generally excluded. Because the divisor is calendar days, the resulting daily figure is lower than dividing only by working days.

How are partial years counted?

Service beyond a whole year is counted proportionally. Eight years and six months of service, for example, earns 8.5 years' worth of the 30-day allowance. The tool converts your years and months into a fractional figure so the partial period is paid pro rata.

Is severance the same as a company pension?

It overlaps. Many employers now run the statutory entitlement through a Defined Benefit or Defined Contribution retirement pension plan rather than paying a lump sum directly, but the floor is the same 30-days-per-year benefit. This tool estimates the statutory lump-sum equivalent; your actual payout follows your plan.

South Korea Gratuity / End-of-Service Calculator

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This South Korea severance calculator estimates your statutory retirement allowance (Toeijikgeum) — the lump sum an employer must pay on departure under Korean labour law — based on 30 days of average wage for each year of continuous service.

How it works

The law sets the benefit as:

average daily wage = total wages in last 3 months / calendar days in that period
severance          = average daily wage × 30 × years of service

The average wage uses your final three months’ total pay (base salary plus regular allowances and the relevant share of bonuses), divided by the number of calendar days in that window. That daily figure is multiplied by 30 to get one year’s allowance, then by your total years — with partial years counted pro rata.

You qualify if you worked at least one continuous year and averaged 15 or more hours a week. Below one year there is no statutory entitlement.

Example

An employee leaving after 8 years and 6 months, whose last three months totalled 13,200,000 won over 92 calendar days, has an average daily wage of about 143,500 won. Thirty days of that is roughly 4,304,000 won per year, and 8.5 years gives a statutory severance of around 36,600,000 won.

Notes

The average wage uses calendar days, not working days, which lowers the daily rate. Many employers now route this through a DB or DC retirement pension plan, so your actual payout follows your plan rules. One-off irregular payments are excluded. Estimate only — confirm with your employer or a labour adviser.