CalcHub
Free Salary & Tax CalculatorAs of 2024
Enter severance pay information
Total severance pay30 million won
원
1 million100 million250 million500 million
Years of service5 years
년
1 year10 years25 years40 years
The longer the years of service, the larger the retirement income deduction, reducing the tax burden.
Calculation result
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After entering severance pay and years of service
Please press Calculate.
Net severance pay
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—
Total severance pay—
Years of service deduction—
Retirement income tax—
Local income tax—
Total tax—
Net income—
Effective tax rate—
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Retirement Income Tax Calculation Method
Retirement income tax applies a lower rate than general income tax to protect long-term employees. The longer the years of service, the greater the deductions.
Retirement income calculation process
Retirement Income = Severance Pay – Years of Service Deduction
Taxable Income = Retirement Income ÷ Years of Service × 12 (Converted)
Tax Amount = Apply tax rate to converted tax base × Years of service ÷ 12
Taxable Income = Retirement Income ÷ Years of Service × 12 (Converted)
Tax Amount = Apply tax rate to converted tax base × Years of service ÷ 12
This calculator uses a simplified calculation method. The actual retirement income tax may vary depending on the type of retirement benefit (lump sum or pension), and consulting a tax accountant is recommended for the exact tax amount.
Frequently Asked Questions
When do I pay retirement income tax?
Upon retirement, the amount is automatically deducted from your severance pay via withholding tax. There is no need for separate payment, as the company withholds the tax and pays the amount.
Does receiving severance pay as a pension reduce taxes?
Yes, if you transfer your severance pay to an IRP account and receive it as a pension, you can receive a reduction of 30 to 401% in severance income tax.
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