According to the Korean standard labor law, all of employer should pay the Retirement allowance(=severance payment, retirement fund) to their employee(regular, contractor, freelancer, part-timer regardless of the employee status) a month salary for a year-long service.
When calculate this allowance, if an employer didn't buy a retirement fund at the bank, it's as follow formula;
- Last 3 months average salary*service months/12
If an employer buy the retirement fund at a bank under the name of their employee's account, an employer can pay it 8.34% of the monthly salary or yearly salary to the employee's account based on the contract with a bank and employee.
For more details, please visit the below MOEL website;
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