Korean severance pay, shutdown allowances and injury compensation are all set as “so many days of average wage”, so they all start from the average wage. Labor Standards Act Article 2(1)6 defines it as the total wages paid in the 3 months before the day the reason arises, divided by the total calendar days in that period. If probation, parental leave or sick leave fall inside those 3 months, pay is low or nil and the average drops sharply. So Article 2 of the Enforcement Decree takes 8 kinds of period out of both the days and the pay, and Article 2(2) of the Act says that if the result is below the ordinary wage, the ordinary wage is used. The calculator below applies the exclusions and shows the daily average wage and the severance floor.
1. Average wage = pay in the previous 3 months ÷ total days in that period (Art. 2(1)6).
2. 8 excluded periods — including probation up to 3 months, parental leave and maternity leave — come out of both days and pay (Decree Art. 2(1)).
3. If the result is below the ordinary wage, the ordinary wage applies (Art. 2(2)). Severance is at least 30 days a year.
Calculator
Updates as you type. The period runs from the same date three months earlier to the day before; if that date doesn’t exist we start on the 1st of the next month (our count). Won fractions are dropped (our method). Severance floor = 30 days × years (Art. 8(1)); the official calculator prorates by days and may differ.
The definitions
| Type | What the source says | Worth noting (ours) |
|---|---|---|
| Labor Standards Act Art. 2(1)6 | “Average wage” means the total wages paid to the worker in the 3 months before the day the reason for calculating it arises, divided by the total number of days in that period. The same applies where the worker has been employed under 3 months. | Calendar days — 89 to 92 |
| Labor Standards Act Art. 2(2) | If the amount so calculated is less than the worker’s ordinary wage, the ordinary wage is the average wage. | There is a floor |
| Retirement Benefit Security Act Art. 8(1) | An employer must set up a scheme paying at least 30 days’ average wage for each year of continuous service as severance. | Where severance uses it |
The 8 excluded periods — Decree Art. 2(1)
| Item | Excluded period (source) | Worth noting (ours) |
|---|---|---|
| 1 | Up to 3 months from the start of probation for a worker on probation under an employment contract | Leaving soon after joining |
| 2 | Shutdown for reasons attributable to the employer under Art. 46 | Shutdown allowance periods |
| 3 | Maternity leave and miscarriage or stillbirth leave under Art. 74(1)–(3) | — |
| 4 | Time off for treatment of a work injury or illness under Art. 78 | Industrial accident care |
| 5 | Parental leave under Art. 19 of the Equal Employment Act | The commonest case (ours) |
| 6 | Industrial action under the Trade Union Act | — |
| 7 | Leave or absence for duties under the Military Service, Reserve Forces or Civil Defence Acts — not excluded if wages were paid | Paid time stays in |
| 8 | Time off with the employer’s approval for a non-work injury or illness or other reasons | Approved sick leave |
Paragraph (2) of the same article leaves out temporary pay and allowances and pay in kind (unless the Minister of Employment and Labor specifies otherwise), and Article 4 says that where none of these methods work, the Minister’s rules apply. If the whole 3 months are excluded, the calculator points to Article 4.
When parental leave falls inside — our example
| Case (our example) | Daily average wage | Worth noting (ours) |
|---|---|---|
| Reason arises 1 Nov 2026; period 1 Aug–31 Oct, 92 days; 3 million won a month, 9 million in all | 97,826 won | 9 million ÷ 92 |
| Same worker on unpaid parental leave for all of October (31 days) — pay 6 million, divided without excluding | 65,217 won | 6 million ÷ 92 — not how the Decree counts |
| Taking those 31 days out of both days and pay | 98,360 won | 6 million ÷ 61 |
| Severance floor for 5 years in the last case | 98,360 × 30 days × 5 = 14,754,000 won | 2,950,800 won a year |
Without the exclusion 30 days come to 1,956,510 won; with it, 2,950,800 won — about a third more for the same worker (our sum). We ran the period from the same date three months earlier (1 August) to the day before (31 October). For leaving, the reason arises on the day after the last day worked — the severance calculator counts the same way, following the labour ministry.
The ordinary wage is the floor
Because of Article 2(2), even after exclusions the average wage cannot fall below the ordinary wage. Enter a daily ordinary wage and the calculator uses whichever is higher. How to work out the daily ordinary wage is outside this page.
Checklist
- ☐ Which dates make up the 3 months before the reason arose
- ☐ Any probation, shutdown, maternity leave, injury care, parental leave, industrial action, military duty or approved leave in them
- ☐ Both the days and the pay for those periods taken out
- ☐ The result not below the ordinary wage
Questions that remain
How do bonuses and annual-leave pay go in?
The provisions read here only set “total wages” and the exclusions. For how bonuses and leave pay are added, see the severance calculator page and the ministry’s guidance.
Is unpaid sick leave excluded?
Item 8 covers time off with the employer’s approval for a non-work injury or illness. Days off without approval fall outside it, on our reading.
What if I have worked under 3 months?
The last sentence of Article 2(1)6 says the same applies. We read that as dividing the pay for that time by its days (our reading).
Sources
- Korean law database (law.go.kr) — Labor Standards Act Art. 2 — source (current text, effective 8 October 2026, Act No. 21533; checked 26 October 2026). Definition of average wage (previous 3 months, total days); the ordinary-wage floor.
- Korean law database — Labor Standards Act Decree Arts. 2–4 — source (current text, effective 23 October 2025, Decree No. 35436; checked 26 October 2026). The 8 excluded periods, temporary and in-kind pay, day workers, special cases.
- Korean law database — Retirement Benefit Security Act Art. 8(1) — source (effective 18 September 2026, Act No. 21475; checked 26 October 2026). At least 30 days a year.
- Not read. The Minister’s exceptions (Decree Art. 2(2) proviso, Art. 4); how bonuses and leave pay are included.
- What we added. The “worth noting” column and the Korean everyday gloss.
Where to check further
- The labour ministry’s severance guidance — bonuses and leave pay.
- Your payroll team — three months of pay records and proof of excluded periods.
Written on 26 October 2026. The content is from the source; the glosses are ours.
