Severance pay is one of the first numbers that comes to mind when considering resignation. It can serve as living expenses before finding a next job, or as funds for loan repayment or a fresh start. However, those who assume it is simply "monthly salary multiplied by years of service" may find a gap between their estimate and the actual settlement amount. The key to calculating severance pay is not how quickly you use a calculator, but which dates and amounts you enter. If you only enter the net amount deposited into your account or record the retirement date differently, the estimate will change from the start.

■ Are You Eligible for Severance Pay? Criteria: 1 Year of Service and 15 Hours per Week

First, you must confirm whether you are eligible. According to guidance from the Ministry of Employment and Labor, statutory severance pay accrues for workers with a continuous employment period of one year or more and whose average scheduled working hours per week, averaged over four weeks, are 15 hours or more. If working hours were irregular, alternating above and below the threshold, the periods included in the severance calculation must be examined separately.

■ Severance Pay Formula: 'Daily Average Wage × 30 Days × Days of Service ÷ 365'

The basic formula is "daily average wage × 30 days × continuous days of service ÷ 365." The average wage is, in principle, calculated by dividing the total wages earned during the three months prior to the date the cause of retirement occurred by the total number of days in that period. This differs from a method based on the final month's salary.

The salary to be entered should be based on pre-tax wages, not the net amount after deductions such as taxes and social insurance premiums. It is also necessary to check whether allowances beyond base pay, bonuses, and unused annual leave compensation are reflected in the average wage. However, avoid adding all performance bonuses or annual leave payouts received at retirement in a lump sum; the nature of the payment and the calculation period must be distinguished.

■ How to Use Naver and Ministry of Employment and Labor Severance Calculators

You can check the estimated amount by searching "severance pay calculator" on Naver. Simply enter the required information such as the hire date, retirement date, and salary to gauge the approximate scale. Rather than treating the result as the final payment amount, it is best used as a reference for comparison with the company's settlement details.

The Ministry of Employment and Labor website also offers a severance pay calculator. It includes calculation examples reflecting pre-tax wages and additional amounts such as bonuses and unused annual leave compensation, helping users verify the input criteria. Notably, the ministry's calculator advises that if the daily ordinary wage exceeds the calculated daily average wage, the calculation should be based on the ordinary wage.

■ Enter 'the Day After the Last Working Day' as the Retirement Date

Date entry is also easy to miss. The Ministry of Employment and Labor calculator instructs users to enter the day after the last working day as the retirement date. For example, if the last working day is October 31, November 1 should be entered as the retirement date in the calculator. Users should first read each calculator's on-screen date guidance and confirm it matches the continuous employment period calculated by the company.

■ DC-Type Retirement Pension Subscribers Should Be Cautious About Calculator Results

Retirement pension subscribers also need to check the plan type. In particular, the defined contribution (DC) type is structured so that the company contributes at least one-twelfth of the annual total wages as contributions. Because investment performance of the accumulated funds is reflected, the results of a general average-wage-based severance calculator cannot be taken as the actual amount to be received.

■ Payment in Principle Within 14 Days

The payment timing also ties into living expense planning. Statutory severance pay must, in principle, be paid within 14 days from the date the cause for payment arises. However, in special circumstances, the payment deadline may be extended by agreement between the parties.

Before starting the severance calculation, it is advisable to organize the hire date, last working day, recent pay stubs, bonus and annual leave compensation details, and retirement pension type. If the estimated amount differs from the company's settlement, comparing the periods and wage items used in the calculation, rather than just the total, makes it easier to find the cause of the discrepancy.