How severance pay is calculated in Korea
Under the Employee Retirement Benefit Security Act, anyone who works at least one year and at least 15 hours a week for the same employer is entitled to severance pay, whatever their nationality or visa.
Severance = average daily wage × 30 × (days employed ÷ 365)
The average daily wage is your total pay for the last three months (plus 3/12 of bonuses paid in the last year) divided by the number of days in those three months. So severance is roughly one month of salary for every year worked, and it is pro-rated after the first year: 18 months of work gives about 1.5 months of pay.
Things foreign workers should know
- Deadline: the employer must pay within 14 days after your last day, unless you agree in writing to a later date.
- One day short counts: if your contract ends one day before the one-year mark, you get nothing. Check your end date carefully.
- Tax: severance is taxed separately at a low rate; for one or two years of work, the retirement income tax is usually small or zero.
- Unpaid severance: you can file a complaint with the local Labor Office (call 1350, English available) even after leaving Korea.
- E-9 workers: part of severance is paid through Departure Guarantee Insurance when you leave Korea.
Frequently asked questions
Do English teachers in Korea get severance?
Yes. Hagwon and public school teachers on E-2 visas who complete one year of full-time work are entitled to severance by law, even if the contract says otherwise.
Is the meal allowance included?
Regular, fixed allowances paid every month are part of wages and are included. One-off payments are not.
Is the airfare reimbursement part of severance?
No. Flight allowances in teaching contracts are separate benefits and do not change the severance amount.