Shutdown Pay Calculator
Calculate shutdown/layoff pay based on average wage and shutdown days.
Overview
The Shutdown Pay Calculator computes the shutdown allowance required under Article 46 of Korea's Labor Standards Act. When a business shuts down due to causes attributable to the employer, workers must receive at least 70% of their average wage for the shutdown period. If 70% of the average wage exceeds the ordinary wage, the employer may pay the ordinary wage as shutdown pay instead. This tool helps accurately calculate shutdown pay obligations.
Formula
Shutdown Pay = Daily Average Wage × 70% × Shutdown Days (If 70% of average wage exceeds ordinary wage → Ordinary Wage × Shutdown Days) • Daily Average Wage = Total wages for last 3 months ÷ Total calendar days in that period • Daily Ordinary Wage = Monthly Ordinary Wage ÷ Monthly Prescribed Working Days Example: Daily average wage KRW 100,000, 20 shutdown days Shutdown Pay = 100,000 × 0.7 × 20 = KRW 1,400,000 Example: If 70% of average wage (KRW 70,000) is less than ordinary wage (KRW 80,000) Shutdown Pay = 70,000 × 20 = KRW 1,400,000 (70% of average wage applies)
How to Use
- 1Enter the total wages for the last 3 months to calculate the daily average wage.
- 2Enter the total number of shutdown days.
- 3Select the shutdown reason (employer fault / business reasons / other).
- 4Enter the monthly ordinary wage.
- 5Click calculate to see the shutdown pay amount and applicable criteria.
Tips
- ✔Shutdown pay is only obligatory when the shutdown is attributable to the employer, such as business downturn, material shortages, or equipment failure.
- ✔Compare 70% of the average wage with the ordinary wage — if 70% of the average wage exceeds the ordinary wage, the employer may pay the ordinary wage instead.
- ✔Employers can separately apply for Employment Retention Subsidies from the Ministry of Employment and Labor to receive government support for a portion of shutdown pay costs.
FAQ
Q. When is shutdown pay required?
Shutdown pay is required when workers cannot work due to causes attributable to the employer, such as business downturn, material/raw material shortages, facility breakdowns, or order declines. There is no payment obligation for shutdowns caused by the employee or by force majeure.
Q. Is shutdown pay required for natural disasters or force majeure?
No. Shutdowns caused by force majeure events such as natural disasters, wars, or emergencies are not attributable to the employer, so there is no shutdown pay obligation. However, separate government support programs may be available and should be checked.
Q. How are shutdowns due to infectious diseases (e.g., COVID-19) handled?
Shutdowns following administrative orders due to infectious diseases may be considered force majeure, but this depends on the specific circumstances. Voluntary shutdowns by employers not mandated by government quarantine orders may be considered employer-attributable. Utilizing government support programs such as Employment Retention Subsidies is recommended.
Q. How is shutdown pay calculated?
At least 70% of the daily average wage is paid for each shutdown day. If 70% of the average wage exceeds the ordinary wage, the ordinary wage may be paid instead. The average wage is calculated by dividing total wages for the last 3 months by the total calendar days in that period.
Related Articles
Related Calculators
Take-Home Pay Calculator
Calculate net salary after social insurance and income tax deductions.
Severance Pay Calculator
Calculate severance pay based on employment period and salary.
Hourly Wage Calculator
Convert between monthly/annual salary and hourly wage.
Overtime Pay Calculator
Calculate overtime, night and holiday work pay.
Minimum Wage Calculator
Calculate monthly and annual pay based on minimum wage.
National Pension Calculator
Calculate national pension contributions and estimated benefits.