The company must pay severance pay if the worker has worked for a certain period of time (15 hours per week) for more than a year. Since severance pay is a great help to the stability of workers’ lives, in Korea,
it is a principle to pay severance pay not only to regular workers but also to freelancers and daily workers if they work as regular workers. These days, there are many cases where they are not sure whether they paid properly even if they received severance pay. Therefore, in order to protect money like blood, it seems necessary to take an active attitude to find out about severance pay on your own.
<What is severance pay?>
Retirement allowance refers to money paid by the company when a worker retires after working for a certain period of time.
Retirement payment criteria
The criteria for severance pay are as follows.
– If a worker has worked 15 hours a week for more than a year, he or she must pay severance pay.(Including regular workers as well as freelancers and daily workers)
*These days, there are companies that inflate their salaries by including severance pay at 1/13, which is wrong.
Because severance pay is a separate concept from earned income, you should not include severance pay in the contract.
However, there are cases where severance pay is not paid. If an employee is in a family relationship with a company made up of representatives and family members of a private workplace, he or she cannot receive severance pay.
And I told you above that freelancers or workers can receive severance pay if they work 15 hours a week or more than a year. In order not to pay severance pay, there are many companies that finish their projects in 10 or 11 months when they first leave them. Therefore, if a freelancer is put into a long-term project, it is much more advantageous for workers to fill up to 12 months and receive severance pay.
the due date
The severance pay must be paid within 14 days after the employee leaves the company. But most of the time, companies usually pay within a month.
How to calculate severance pay
The retirement allowance calculation method is added to the salary by dividing the final three months’ salary and the bonus and annual allowance for one year by three months. And it’s calculated by dividing it by the number of days.
(After dividing the three-month salary by the number of three-month days, calculate the average daily wage by x30 to obtain the average monthly wage (retirement).
Interim retirement allowance settlement
The interim settlement of severance pay refers to the settlement of severance pay before retirement. However, in order for workers to receive interim settlement of severance pay, the employer must approve the application. If a worker applies for interim settlement, the severance pay will be calculated and paid based on the date of application for interim settlement.
*If a worker requests interim settlement of severance pay for the following reasons, the employer must approve it.
1. When an employee who is a homeless person requests interim settlement of severance pay to purchase a house
2. In the case where an employee who is a homeless person requests interim settlement due to a lease or monthly rent deposit
3. Where the worker himself or his/her family needs medical expenses due to illness or injury
4. In the case of inevitable request for interim settlement of severance pay due to rehabilitation procedures
Disadvantages of interim settlement of severance pay
If you get an interim retirement allowance, you have to pay income tax. The longer the working period, the smaller the income tax. That’s why you have to pay a lot of tax if you get your severance pay settled in the middle. Unless you’re buying for real estate profits, you’d better not touch the severance pay. These days, I invest my severance pay in IRP and prepare for my retirement in the form of a pension, so I think it will be of great help in the future if I invest properly.
