Review inherited employee retirement and unused-leave budgets, separate social-insurance and national-tax exposure limits, and the remaining price available for a negotiated holdback.
Retirement-income tax, unpaid salary, goodwill valuation, VAT, litigation costs, future wage growth and actual collection priority are separate. Obtain evidence for unknown items and recalculate.
A buyer of a Korean restaurant, cafe, academy or salon may inherit exposure associated with employees’ earlier service and the seller’s unpaid social insurance. This calculator separates the employee ledger, statutory insurance groups and national tax before estimating how much of the unpaid purchase balance you might discuss retaining.
The result is a pretax negotiation budget in KRW. It does not establish a debt, a legal right to deduct the amount, or the final retirement benefit payable. Actual retirement pay may change with later wages and service; an acquisition-date estimate is not a ceiling on that future payment.
The factual transfer of an organized business while preserving its identity matters. Supreme Court case 2023Du54914, decided on 2026-01-29, confirms the general succession of employment relationships in a business transfer. An agreement between buyer and seller to exclude selected employees does not, by itself, justify dismissal.
Each insurance decree defines the comprehensive succession of business rights and obligations. National tax adds its own transferee conditions. A selection about employees does not determine insurance treatment; a VAT classification does not establish every requirement covered here either.
A new business registration or a contract headed asset sale does not settle these factual questions. Review facilities, staff, trading relationships and operations actually transferred. Where employee exclusion or employee consent is disputed, resolve the scope with an adviser before treating the displayed sum as a settlement figure.
The evidence confirmation records that you checked the amounts; it does not authenticate a certificate. Use aliases for staff rows and bring only the necessary supporting records to your adviser.
Daily basis = max(includable wages for the preceding three months / actual assessment days, daily ordinary wage)
Severance budget = daily basis × 30 × unsettled service days / 365
Labor Standards Act Article 2 supplies the average-wage definition and ordinary-wage floor. Employee Retirement Benefit Security Act Article 8 provides the 30-day average-wage standard for each year of continuous service. Three months do not always equal 90 days. Short service and excluded periods require the correct wages and actual assessment days, rather than a fixed divisor.
The original joining date tests whether one calendar year of continuous service has been reached. A valid new accrual start affects the unsettled amount only. An employee with more than a year of overall continuous service can still have a nonzero benefit for a post-settlement segment shorter than a year. Do not subtract an old settlement amount again after moving the accrual start.
The acquisition day is excluded; the period ends on the preceding day. The daily basis is not rounded in the middle of the formula, and each employee’s final amount is rounded to whole KRW. Actual breaks, changing part-time schedules and the legal validity of settlements need individual review. A business sale itself is not a statutory reason for an interim settlement.
Calendar qualification and the 365-day monetary divisor serve different purposes. Under this date model, a 2024-01-01 joiner has 365 elapsed days on 2024-12-31 but has not reached the calendar anniversary. For a 2024-02-29 joiner, the tool uses 2025-03-01 as the first qualifying excluded-acquisition date, applying Civil Act Articles 157, 159 and 160 to the month-end expiry. This leap-day treatment is an application of those rules, not a specific official ruling on the example.
The current severance estimate is separated from the conditional budget for past service if continued employment later reaches one year. The conditional figure is not payable merely because the acquisition occurs, assumes unchanged wages, and excludes future additional service.
Retirement-benefit coverage requires at least one year of continuous service and the applicable average of at least 15 scheduled hours per week over four weeks. Statutory annual leave also requires a workplace with at least five regular employees. A smaller workplace can still owe retirement benefits.
A single hours selection cannot reconstruct changing work patterns. Unconfirmed hours remain a review assumption. Contractual leave at smaller workplaces and benefits above the statutory minimum are not automatically included.
max(verified wages for the covered past period / 12 − employer contribution principal paid, 0)
Employee Retirement Benefit Security Act Article 20 requires employer contributions of at least one-twelfth of annual wages. Reconcile the relevant business years, due dates and past-period records. Do not include wages after acquisition.
A DC account valuation can contain employee top-ups and investment gains or losses. It is not the employer’s contribution principal. Do not deduct that balance from an average-wage severance calculation. This tool does not calculate DC default interest, mixed arrangements or scheme conversions; verify those separately.
For DB, enter the verified net shortfall after checking the scheme rules and pension provider’s records. Do not divide a workplace-wide fund arbitrarily among employees or assume that funding automatically extinguishes the employer’s payment obligation. An unverified zero is not evidence of full funding.
The leave budget equals daily ordinary wage multiplied by the verified unpaid eligible days. Labor Standards Act Article 60(5) allows ordinary or average wages as specified in workplace rules. This calculator assumes ordinary wages; do not finalize payment from it if the applicable rules use average wages.
Remaining leave that can still be taken and a cash compensation obligation are different. Exclude days already paid, days with no compensation obligation following lawful Article 61 leave-use promotion, and disputed or expired items pending review. The calculator does not generate leave entitlements from joining dates or declare every remaining day immediately payable.
The usual cap is the amount paid or payable, P. Where that consideration is absent or unclear, use N: assets less liabilities assessed under the relevant statutory valuation method. Market value M and assessed net assets N are distinct inputs.
If |P − M| is at least KRW 300,000,000 or at least 30% of market value M, the cap is max(P, N). The denominator is market value. Equality triggers the rule.
For P = KRW 70,000,000, M = KRW 100,000,000 and N = KRW 90,000,000, the difference is exactly 30%, so the cap is KRW 90,000,000. Increasing P to KRW 70,000,001 puts the difference below both thresholds, leaving the usual consideration-based cap.
Book values and online asking prices are not automatically the applicable statutory valuation. Check the transferred property, assumed liabilities and assessment basis with the collecting authority. A cap is a limit on the relevant scenario, not an instruction to pay that amount.
National Health Insurance Act Article 77-2(2), National Pension Act Article 90-2(2), and Employment and Industrial Accident Compensation Insurance Premium Collection Act Article 22-5(2) address secondary payment obligations of business transferees. Use business-related pre-transfer assessments and the shortfall after the seller’s property is applied, subject to the relevant comprehensive-succession and property-cap conditions.
Shortfalls are floored at zero. Their sum is a conservative exposure scenario; it does not establish actual collection priorities or the authority’s combined distribution decision.
If each of the three groups has a KRW 150,000,000 shortfall and the property cap is KRW 100,000,000, each group produces KRW 100,000,000 and the scenario sums to KRW 300,000,000. Do not cap all insurance together once at KRW 100,000,000. Employment and industrial accident are combined under the same collection statute.
Allocated health, pension, employment/industrial-accident and national-tax recoveries cannot exceed the seller’s remaining assets in total. The tool does not invent priorities or multiply one available asset across several debts. Use assessed arrears and payment records, including the confirmed scope of late charges and collection expenses. No current payroll percentage is used to manufacture historical arrears. An unrelated third-party purchase does not automatically eliminate insurance exposure.
Framework Act on National Taxes Article 41 and Enforcement Decree Articles 22 and 23 require the relevant comprehensive business succession plus either the related-party condition or acquisition for the seller’s tax-avoidance purpose. When both additional conditions are confirmed no, this national-tax scenario is excluded. Either confirmed yes can bring the relevant shortfall into the capped scenario; unresolved conditions remain conditional.
The calculator does not determine tax avoidance or reduce a related-party test to a family relationship alone. Enter only qualifying business national taxes finalized before transfer and relevant collection expenses. Do not add local taxes, every unrelated tax debt, or fresh post-transfer assessments. A zero national-tax scenario says nothing about separate employee or insurance exposure.
| Input or calculation | Fictional value |
|---|---|
| Joining date → acquisition (excluded) | 2025-11-07 → 2026-11-07 / 365 days |
| Includable wages / actual assessment days | KRW 9,000,000 / 90 = KRW 100,000 |
| Daily ordinary wage | KRW 90,000 |
| Severance budget | 100,000 × 30 × 365 / 365 = KRW 3,000,000 |
| Five unused eligible leave days | 90,000 × 5 = KRW 450,000 |
| Employee budget total | KRW 3,450,000 |
This example assumes at least 15 scheduled weekly hours, at least five regular employees, employment succession and ordinary-wage leave compensation. If insurance and national-tax exposure are verified zero and only KRW 2,000,000 remains unpaid, the reference retention is KRW 2,000,000 and the exposure beyond that balance is KRW 1,450,000. Discuss additional security or settlement terms where the balance cannot cover the budget.
In a separate DC example, covered-period wages of KRW 36,000,000 and employer contribution principal of KRW 2,000,000 produce an unpaid-contribution budget of KRW 1,000,000: 36,000,000 / 12 − 2,000,000. Do not add that DC amount to severance for the same employee and period. Select the actual arrangement.
The succession scenario retains the past-service employee budget and the insurance/national-tax scenarios. The alternative considers a reduction only under the assumption that genuine voluntary retirement, lawful settlement and actual payments or contributions have been verified. A dropdown selection or signature alone does not interrupt continuous service.
Supreme Court case 91Da12806, decided on 1991-11-12, distinguishes genuine agreement to end employment from merely formal resignation and re-entry. Formal paperwork and receipt of a purported retirement payment do not automatically prove a break. A business transfer does not create a statutory interim-settlement ground.
Before verification, the alternative’s apparent reduction is not confirmed savings. Even valid employee settlement does not remove independent insurance and tax conditions. Nor does it automatically reset the future rights of employees with less than one year of service. Agree on payers, evidence deadlines, handling newly discovered arrears and conditions for releasing retained money.
Both comparison figures include the conditional under-one-year budget. The verified-settlement alternative removes only the current employee budget and retains the conditional past-service amount, so the difference between the two figures equals that current employee budget.
Registration alone does not establish a break in employment. Review the actual transfer and preserve each original joining date.
Yes, where the retirement-benefit service and hours conditions are met. The five-employee statutory annual-leave threshold is a separate rule.
Distinguish current retirement-benefit qualification from the conditional past-service budget if succession later reaches a year. Check leave and contractual payments separately.
No such deduction is made here. Account valuations can contain personal top-ups and investment results. Reconcile DC obligations against employer contribution principal instead.
Check its business scope, date and later assessments or payments. Unverified amounts must not be treated as confirmed zero; retain the unconfirmed-evidence state.
The conservative scenario sums separate statutory caps. Confirm actual collection and property-allocation treatment with the relevant collecting authorities.
No. The comparison requires verified genuine voluntary retirement and valid settlement or contribution payments. Formal resignation does not automatically extinguish prior rights.
The calculation does not grant a deduction right. Agree on settlement and retention terms, verify responsibility and payment evidence, and obtain contract advice.
Current statutes, decrees and the two cited cases were verified directly through the National Law Information OPEN API on 2026-11-07. This is a Korea-specific tool, and the Korean originals govern. Latest-version effective dates below identify the checked texts; individual articles can have earlier effective dates.
Recheck subsequent amendments, factual transfer scope, assessments and asset valuation, staff scheme rules, wage exclusions, valid settlements, annual-leave expiry and lawful leave-use promotion. Local taxes, wage arrears, default interest, retirement income tax, VAT, litigation expenses and future wage changes are outside the displayed total.
Download the TXT record or print the employee amounts and unconfirmed items. Request payroll, contribution and clearance evidence from the seller, then distinguish the reference budget from amounts actually paid. Where the unpaid price is insufficient, discuss additional security and release conditions with your adviser.