Severance package
lastmod 2025-07-21created 2025-07-211 edits
A severance package (退職金, Korean: toejikgeum) is pay that a workplace gives to a worker who is retiring.
Severance pay that a corporation pays to employees and officers is paid when the employee or officer actually retires. However, severance pay that a corporation pays to an officer who is not a shareholder or investor is treated (included) as a deductible expense for tax accounting only within the following limits: ① if the articles of incorporation specify the amount to be paid as severance pay (retirement allowance, etc.), the amount specified in the articles; ② if the articles have no such provision, an amount equal to one-tenth of the total salary paid to that officer during the one year counted back from the officer's retirement date, multiplied by the number of years of service.
See also
- Retirement pension
- Defined benefit (DB type)
- Defined contribution (DC type)
- Korean: 개인형 퇴직연금 (IRP)
- Individual savings account (ISA; Korean: 개인종합자산관리계좌)
- Severance package (Korean: 퇴직금)
- Pension (Korean: 연금)