Severance Pay Deadline in Korea: The 14-Day Rule Fully Explained

When Must Severance Pay Be Paid?

One of the most frequently searched questions after leaving a job is: "When will I receive my severance pay (퇴직금)?" The short answer is: severance pay must be paid within 14 days of the date of resignation.

Legal Basis: The 14-Day Payment Rule

Article 9 of the Act on the Guarantee of Workers' Retirement Benefits (근로자퇴직급여 보장법 제9조) explicitly requires employers to pay severance pay within 14 days of an employee's resignation date. This is a mandatory provision — employers cannot unilaterally delay payment.

However, the same article provides that the payment deadline may be extended where the parties agree. Such an agreement is only valid if it is reached after the employee has resigned; any pre-resignation agreement allowing later payment has no legal effect.

The Constitutional Court also confirmed the constitutionality of the 14-day payment rule in case 2002헌바11.

Note for foreign workers: Your employment contract may specify payment terms, but the statutory 14-day deadline is the minimum protection — contractual terms cannot reduce it.

What Happens After 14 Days? 20% Annual Late-Payment Interest

If an employer fails to pay severance pay within 14 days, 20% annual late-payment interest (지연이자) accrues from the day after the deadline passes, under Article 17 of the Enforcement Decree of the Labor Standards Act (근로기준법 시행령 제17조). For example, if your severance pay is KRW 10,000,000 and you receive it 30 days late, you can claim approximately KRW 160,000 in additional late-payment interest.

Late-payment interest does not accrue automatically — the worker must claim it separately, either through a Ministry of Employment and Labor complaint or civil litigation.

Severance Pay Calculation: Key Points to Check

The calculation basis is just as important as the payment deadline. Here are the most common issues:

① The probationary period is included in continuous service

The Supreme Court has ruled that when an employee is formally hired without any gap after the probationary period, the probationary period must be counted as part of the continuous service period (대법원 2021다218083). Severance pay must therefore be calculated from the very first day of probation through to the resignation date.

② Regular bonuses may be included in average wages

Bonuses that were paid on a regular basis must be reflected in the average wage (평균임금) calculation even if they were not actually received during the three months immediately before resignation (Supreme Court 77다1321). The standard method is to prorate the annual bonus and include three months' worth in the average wage.

③ Monthly pre-settlement of severance pay is void

Some workplaces include a portion of severance pay in the monthly salary. Courts treat such arrangements as void (Suwon District Court 2008나21324). Amounts paid this way are reclassified as ordinary wages (통상임금), not severance pay, so the employer must still pay the full severance pay separately upon resignation.

What to Do If You Haven't Received Your Severance Pay

1. Request payment from your employer in writing — it is important to keep a record of the request.
2. File a complaint with the Ministry of Employment and Labor — submit an unpaid-wages complaint (임금체불 진정) to the regional office with jurisdiction over your workplace.
3. Claim late-payment interest at the same time — claim the 20% annual late-payment interest for every day beyond the 14-day deadline.

Failure to pay severance pay is subject to criminal penalties under Article 44 of the Act on the Guarantee of Workers' Retirement Benefits (근로자퇴직급여 보장법 제44조): imprisonment of up to 3 years or a fine of up to KRW 30,000,000.

Calculate Your Severance Pay on Workbear

If you want to verify whether the payment date and amount are correct, use the severance pay calculator at workbear.kr. Simply enter your start date, resignation date, and average wage to instantly check your estimated severance pay and any applicable late-payment interest. An AI-assisted complaint drafting feature is also available if you need to file a complaint.

This article is for informational purposes only and does not constitute legal advice. For specific cases, consult a certified labor attorney (노무사) or lawyer.