Severance Pay Calculator

Severance pay = Daily average wage × 30 days × years of service. The daily average wage is the total salary paid in the 3 months before retirement divided by the total number of days in that period.

Severance pay is paid to workers who have worked for 1 year or more when they leave the company. It applies to all workers (regular, contract, part-time) working 15 hours or more per week.

Yes, retirement income tax applies. The longer your years of service, the larger the deduction and the lower the effective tax rate. The actual tax is calculated using the retirement income tax formula.

Severance pay is received as a lump sum upon retirement, while retirement pensions (DB/DC/IRP) are accumulated during employment and received as a pension or lump sum. Retirement pensions are protected even if the company goes bankrupt.

Yes, all compensation normally paid during the 3 months before retirement is included: base salary, fixed allowances, bonuses (annual bonus × 3/12), and annual leave pay.

Yes, if you have worked for 1 year or more and worked 15 hours or more per week, you are entitled to severance pay regardless of employment type. This applies to contract workers, part-timers, and daily workers.

Yes, transferring severance pay to an IRP account reduces retirement income tax by 30%. If you withdraw it as a pension after age 55, only pension income tax (3.3–5.5%) applies, significantly reducing your tax burden.