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  • emjcee
  • Newgookin

    • 1

    • January 31, 2020, 09:16:06 am
    • Cheonan, South Korea
Severance deductions?
« on: February 13, 2020, 09:52:20 am »
I'm finishing up my contract with a hagwon soon, and I'm trying to calculate my severance pay. Is there any official information out there as to what gets deducted from severance? From my understanding, the regular tax deductions still apply, but pension and healthcare do not get deducted. Is this correct?

Much thanks!

Re: Severance deductions?
« Reply #1 on: February 17, 2020, 12:45:44 pm »
Severance Calculations are some what complex.
You need to calculate your Ordinary Wage which is based upon the work hours and salary stated in the contract, then determine the total number of days in the last three calendar months of your employment, followed by determining any unpaid overtime (if any) and then number of annual leave days you have not used.  During the year you can use 15, but on the last day of Employment you are granted an additional 12 for a total of 27.

Most employment contracts will state ".... your entitled to 10 days of annual leave..." and there may be consideration for "red days", but usually most people have not used 17 days of annual leave.  25% of that amount is added to the Severance (the Daily Average Wage plus unpaid wages x the number of days in the last three calendar months /3)

Severance tends to be 6 weeks of Salary if you have used all your Annual Leave, if not then it will be between 8 to 10 weeks  of your regular Salary.

Please note, when calculating Severance Pension, Health Insurance Premiums and Income Tax deductions (about 15% of "monthly salary) are not deducted or used in the calculations.

I have spreadsheets from the Labor Law Firm, if you message me I can help you conduct your self audit so you know what you should get paid.

« Last Edit: February 17, 2020, 12:47:31 pm by get_me_dog »