Retirement Fund(퇴직연금)


According to the Korean standard labor law, an employer need to pay the retirement allowance to an employee(free lancer, independent contractor or part-timer who's qualified in a certain working hours) who leave after 1 year-long service, it's around one month salary per a year-service.


There're options to meet this law in 2 ways for an employer, the one is to buy a fund in a bank and pay 8.34% of monthly payroll, and the other is just pay a lump-sum allowance when an employee leave the company.

For the later option, an smaller employer used to not recognize the liability at the every year-end since it's not tax deductible, so when a M&A situation is coming, this part should be considered carefully if it's not recognized at all.


Please send me an email to for more details, gooday!






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Joseph SY Zoh

CPA, California, a member of AICPA  |  Jz Associates/Tax Accounting Firm Hae-An

F:+82-31-273-5078  |  Skype: joezoh  |  Email:

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Korean Tax Blog

since 1981-
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