Why compare departure insurance with statutory severance?
Paying departure-insurance premiums every month does not by itself complete a foreign worker severance settlement.
The insurance prepares funding for severance, and the employer must pay a shortfall when the actual lump sum is lower than statutory severance.
This calculator separates insurance, the full employer gap, amounts already paid and the remaining balance so that the next payment and its timing can be checked.
This tool applies South Korean rules for 2026, checked on 2026-10-07.
It is designed for a standard one-employer service period, with gross KRW amounts and verified coverage and wage assumptions.
Individual policy documents, payroll records and qualifying claim events must be checked before settlement.
Check the balance
Separate statutory severance, worker insurance, the employer gap and the remaining balance after prior gap payments.
Avoid counting insurance twice or treating the insurer amount as an additional employer payment.
Compare the budget
Review the minimum monthly contribution budget at 8.3% of the permit wage and the principal actually paid.
Use the insurer gross statement amount when available.
Take the next action
Obtain a written insurer amount, reconcile payroll and save a gap-payment reminder.
Keep the calculation report and confirm the actual transfer yourself.
Coverage, the one-year boundary and weekly hours
The model covers one worker starting in 2013 or later, continuously employed by one employer and retiring in 2026.
An E-9 or H-2 visa label alone does not establish insurance coverage; confirm the actual scope and special exceptions with the employment center and insurer.
Do not assume that agriculture or a small workplace removes the duty to reconcile the gap.
First service anniversary
Article 4(1) of the Employee Retirement Benefit Security Act distinguishes service shorter than one year.
The start date is included and retirement is entered as the first day no longer employed, excluded from service days.
The tool checks the first anniversary instead of assuming that 365 days always completes a calendar year, while retaining 365 as the payment-formula denominator.
15 hours per week
For the verified standard case, contractual hours averaged over four weeks below 15 per week produce zero statutory severance.
Exactly 15 hours meets the hours threshold, subject to the other conditions.
If the service period includes changing weekly-hour conditions, uncheck standard service and review those periods separately.
If coverage, standard service or the wage basis is unconfirmed, main settlement amounts are pending review.
Pending review does not mean zero entitlement.
Service shorter than one year is separated as an employer-refund verification case under Decree Article 21(2)(2); low weekly hours alone do not automatically imply an employer refund.
Inputs that affect the average wage
Reconcile eligible gross base pay, allowances and overtime in the last three months.
The wage divisor is calendar days, not attended workdays, and an ordinary three-month period is not always 90 days.
Compare the automatically displayed period with the payroll period before entering its total.
Annual bonus and leave pay
Separately entered eligible annual bonus and eligible annual unused-leave pay each contribute 3/12 to the average-wage numerator.
Enter zero in those fields when the same amounts are already included in the base wage total.
Unused-leave pay first arising because of retirement is distinct from eligible pay arising earlier and is excluded from this addition.
Excluded periods and the wage floor
For qualifying excluded periods such as maternity leave or eligible suspension, adjust both the days and their wages under Labor Standards Act Enforcement Decree Article 2.
When verified daily ordinary wage exceeds the average, use that higher statutory floor.
Do not substitute the permit monthly wage divided by 30 for the verified current daily ordinary wage.
Severance and employer-balance formulas
Eligible total = three-month wages + (eligible annual bonus + leave pay) × 3/12
Daily average wage = eligible total ÷ wage-period days
Daily benefit wage = max(daily average wage, daily ordinary wage)
Statutory severance = daily benefit wage × 30 × service days / 365
Full employer gap = max(statutory severance − worker insurance, 0)
Remaining gap = max(full employer gap − gap already paid, 0)
Article 8(1) of the Employee Retirement Benefit Security Act requires at least 30 days of average wage for each service year.
The tool retains intermediate daily-wage precision and rounds only final severance upward to a whole KRW for budgeting.
This conservative display convention does not establish an insurer rounding rule or calculate contractual benefits above the statutory amount.
If insurance exceeds statutory severance, the employer gap is zero.
The insurance excess is not classified as an employer refund, and insurance plus the full gap represents a total receipt scenario for this service period.
The gap already paid is not added again, so total receipts and the remaining future transfer are different figures.
The 8.3% premium budget and actual payout
Ministry of Employment and Labor Notice 2011-33 sets the monthly contribution at no less than 83/1000 of monthly ordinary wage in the employment permit.
The model applies the rate used from 2013 onward and rounds the whole-KRW minimum budget upward.
This employer contribution is not calculated as a deduction from worker wages.
Count actual paid months from the insurance statement, rather than assuming that every service month was paid.
Enter the insurer amount
Enter the full gross lump sum for the current employer service period.
Compare gross insurance with gross severance, rather than comparing a net deposit with a gross legal amount.
Under Decree Article 21(4), the employer and worker may request written confirmation of the lump sum.
Estimate principal only
Principal equals uniform monthly premium × months actually paid, assuming zero interest, returns and costs.
It is not a guaranteed insurer payout; switch to the written insurer amount when available.
Changing premiums, policy loans and partial payouts require a separate reconciliation.
The monthly premium shortfall compares the entered permit-wage budget with the entered monthly payment.
It does not establish historical arrears when permit wages changed, and it is not added to the severance gap.
Use premium invoices and payment statements to confirm missed or corrected contributions.
Keep employer and insurance payment dates separate
Employer gap: retirement event
Following Retirement Benefit Act Article 9(1) and settlement rules, the tool displays retirement plus 14 days as a reference date.
For the example retirement on 2026-10-07, the employer balance reference is 2026-10-21.
A later insurer payout does not itself move the employer gap schedule to after departure.
Insurance: departure or application
Foreign Workers Act Article 13(3) uses 14 days from departure, but an application after departure or a qualifying status-change application uses 14 days from application.
Departure on 2026-10-31 with a claim on 2026-10-07 gives 2026-11-14; claiming after departure on 2026-11-03 gives 2026-11-17.
A qualifying status-change claim on 2026-10-09 gives 2026-10-23.
Workplace change or unknown dates
Changing employers while staying in Korea does not generate an immediate insurance-payout schedule.
Check the former employer gap separately and review insurance when a qualifying event occurs.
If the departure or claim date is unknown, the insurance date remains pending instead of being replaced with an invented date.
Reference dates add 14 days with the starting day excluded, before holiday, period-counting and specially agreed-extension adjustments.
Planned departure and claim dates assume that the events occur and a valid claim is received.
Confirm holidays, receipt, payment method and the actual due dates with the responsible parties; verify actual deposits yourself.
How to use the calculator
- Prepare the employment permit and policy, and confirm coverage for this service period.
Keep different employers separate and verify continuous service.
- Enter employment start and retirement as the first day no longer employed.
Check weekly hours, interim settlement, service exclusions, policy loans and partial payouts.
- Enter eligible gross wages, actual wage-period days, annual bonus and leave pay, and verified daily ordinary wage.
Uncheck wage verification if included items or exclusions are unresolved.
- Enter the insurer gross lump sum, or use a principal-only estimate until the statement is available.
Enter only gap payments already made for this settlement to find the remaining balance.
- Select departure, workplace change or qualifying status change, with the relevant dates.
Save the report and calendar reminder, then verify the insurer statement, payroll and actual gap payment yourself.
Worked example: 1,095 service days
The illustrative service period runs from 2023-10-08 to retirement on 2026-10-07, giving 1,095 days.
Assume 40 contractual hours weekly, three-month gross wages of 9,000,000 KRW over 92 days, and verified daily ordinary wage of 82,560 KRW.
Annual additions are zero, and insurance interest, returns and costs are also assumed to be zero.
Illustrative statutory severance, insurance principal and employer gap| Item | Calculation | Amount |
|---|
| Daily average wage | 9,000,000 ÷ 92 (displayed to two decimals only) | 97,826.09 KRW |
| Statutory severance | 9,000,000 / 92 × 30 × 1,095 / 365 | 8,804,348 KRW |
| Minimum monthly budget | 2,156,880 × 83 / 1000 = 179,021.04 → round upward | 179,022 KRW |
| Contribution principal | 179,022 × 36 | 6,444,792 KRW |
| Full employer gap | 8,804,348 − 6,444,792 | 2,359,556 KRW |
Changing the assumptions
- If 1,000,000 KRW of the gap was already paid, the balance is 1,359,556 KRW.
- An insurer gross lump sum of 6,600,000 KRW gives a gap of 2,204,348 KRW.
- A higher daily ordinary wage of 110,000 KRW gives severance of 9,900,000 KRW and a principal-based gap of 3,455,208 KRW.
- Separately adding eligible annual bonus of 4,000,000 KRW and leave pay of 1,200,000 KRW adds 1,300,000 KRW at 3/12, giving severance of 10,076,087 KRW and a gap of 3,631,295 KRW.
Practical scenarios for employers, workers and payroll staff
Prepare employer cash
If wages or overtime rose before retirement, budget for the gap as well as insurance.
After verifying the insurer statement and actual due date, plan the remaining transfer and keep payment proof.
Review worker settlement
Separate the insurer amount from the gap owed by the employer.
Reconcile payslips, service and claim records, and check whether the gap has been delayed simply because insurance is paid later.
Explain the report
The TXT records service dates, wage and insurance inputs, reference dates and verification assumptions.
Korean and English screens share the same pure calculation function, so changing language does not change the formulas.
Checks and limits before settlement
- Employer succession, lawful interim settlement, excluded service and mixed sub-15-hour periods require a verified service calculation first.
Uncheck standard service and review the individual periods.
- Do not mix other employers, policy loans or previous insurance payments with this lump sum.
The tool reconciles one employer service period without those adjustments.
- A difference between gross severance and a net deposit is not automatically an insurance shortfall.
Review retirement-income tax and other payment costs separately.
- A calendar file is a planning reminder and does not submit a claim or pay money.
Completion checkboxes are personal notes and do not replace legal evidence.
- The hours and tenure exclusions apply to verified standard conditions.
Contractual additional benefits, actual insurer refunds and individual legal rights need separate review.
Frequently asked questions
Does enrolling in departure insurance settle all severance obligations?
No.
If the insurer lump sum is below statutory severance, the employer must pay the difference.
Enrollment and completed settlement are separate facts.
The employment-permit wage and final average wage can differ, especially when overtime and eligible bonuses are substantial.
Who receives insurance when service is shorter than one year?
Article 21(2)(2) of the Foreign Workers Act Enforcement Decree specifies employer ownership of the lump sum for service shorter than one year.
The tool shows zero worker insurance and severance, with a separate employer refund candidate.
Verify the actual amount, policy returns and required documents with the insurer.
Does changing workplaces immediately release insurance and the gap?
When the employment relationship ends, review the former employer severance gap.
A workplace change alone is not a departure event releasing the insurance.
The tool separates the gap reference date from insurance-event verification and does not combine service with different employers.
Which date starts the 14-day period for a claim after departure?
Article 13(3) of the Foreign Workers Act uses the application date for a claim made after departure.
A qualifying status-change claim also uses its application date.
A valid claim before departure uses departure as the reference.
Temporary travel is excluded from the modeled departure event.
Can the gap be negative when insurance exceeds severance?
The employer additional gap is floored at zero.
Excess worker insurance is not converted into an employer refund.
If the employer has already paid more than the calculated gap, the difference is only a reconciliation figure, not an automatic recovery right.
How should annual bonus and unused-leave pay be entered?
Add 3/12 of eligible annual amounts.
If they are already included in the basic three-month wage total, leave the separate annual fields at zero.
Distinguish eligible unused-leave pay arising before retirement from unused-leave pay first triggered by retirement; the latter is excluded from this average-wage addition.
Why can a gap remain after paying the correct monthly premium?
Contributions use the monthly ordinary wage in the employment permit.
Severance uses the final average wage, the higher daily ordinary-wage floor when applicable, and actual service days.
Wage increases, overtime, eligible bonuses, paid months and missing payments affect the comparison.
Obtain the insurer written lump-sum confirmation.
Are tax, late-payment interest and return-cost insurance included?
All amounts are gross.
Retirement-income tax, late-payment interest, return-cost insurance, casualty insurance and remittance fees are excluded.
Agreed extensions and holiday or period-counting adjustments are not applied automatically.
For payment-method or individual dispute questions, take the actual contracts and payment records to the responsible institution.
Official sources and update basis
Checked on 2026-10-07 through the National Law Information OPEN API, current statutes and the contribution notice.
The sources have different effective dates, so they are recorded individually rather than described as one 2026 amendment.
- Foreign Workers Act Article 13: MST 276857, effective 2025-10-01, insurance and the 14-day departure/application rules.
- Enforcement Decree Article 21: MST 244037, relevant text 2022-08-02, certain other provisions 2023-02-03, coverage, short-service ownership, gap and written confirmation.
- MOEL Notice 2011-33: ID 2000000016711, effective 2011-08-01, at least 83/1000 of permit monthly ordinary wage from 2013.
- Retirement Benefit Act Article 8 and Article 9: MST 284455, these provisions effective 2026-07-01, certain penalty provisions 2026-09-18, 30-day basis and payment timing.
- Labor Standards Act Article 2: MST 290781, effective 2026-10-02, average wage and the ordinary-wage floor. Decree Article 2: MST 270551, effective 2025-10-23, excluded days and wages.
- MOEL severance example, 1350 unused-leave guidance and EPS insurance guidance cross-check date entry, 3/12 additions and the permit-wage basis.
Recheck qualifying events, due dates, coverage and the contribution fraction when statutes or the notice change.
Individual insurance principal and returns, rounding, included wages, extensions and payment methods must be reconciled with written records from the insurer and responsible staff.
Recalculate using the insurer written amount
Save the current report, obtain a written gross lump sum for this service period and replace the estimate.
Manage the verified payment amount and confirmed due date, then retain the actual transfer evidence.
General severance calculator · Ordinary wage calculator · Retirement-income tax calculator