Korea Retirement Income Tax Calculator
Enter your severance and service dates to get Korea’s retirement income tax plus local tax, with each step — deductions, converted pay and tax base — shown in a table.
Retirement income tax (incl. local tax)-
| Years of service (part-year counts as 1) | - |
| ① Service-years deduction | - |
| ② Converted pay = (severance − ①) × 12 ÷ years | - |
| ③ Converted-pay deduction | - |
| ④ Tax base = ② − ③ | - |
| ⑤ Income tax = rate(④) ÷ 12 × years | - |
| ⑥ Local income tax = ⑤ × 10% | - |
| Severance after tax | - |
How Korea taxes severance
- Service-years deduction: ₩1M × years up to 5; ₩5M + ₩2M per year to 10; ₩15M + ₩2.5M per year to 20; ₩40M + ₩3M per year beyond.
- Converted pay: (severance − deduction) × 12 ÷ years, so it is taxed like one year’s income.
- Converted-pay deduction: all up to ₩8M, then ₩8M + 60% to ₩70M, ₩45.2M + 55% to ₩100M, ₩61.7M + 45% to ₩300M, ₩151.7M + 35% above.
- Tax: basic rates (6–45%) on the base, ÷ 12 × years, plus 10% local tax.
Ways to pay less
- Take it as an IRP pension: you pay only 70% of the tax (60% after 10 years of payments).
- Longer service lowers the rate sharply because of the deduction and the ÷12×years structure.
FAQ
How much tax on ₩30M severance after 10 years?
About ₩220,000 in total: ₩200,000 retirement income tax plus ₩20,000 local tax (≈0.73% effective).
How is it calculated?
Subtract the service-years deduction, multiply by 12 and divide by years of service, subtract the converted-pay deduction, apply the basic rates, then divide by 12 and multiply by years. Add 10% local tax.
Can I lower it?
Keeping severance in an IRP and drawing it as a pension cuts the tax to 70% (60% after 10 years of payments).