Foreign employees in Korea generally qualify for statutory severance pay after at least one continuous year with the same employer, provided their scheduled hours average 15 or more per week over each four-week period. The legal minimum is 30 days of average wages for each year of continuous service, and payment is normally due within 14 days after leaving unless both sides agree to extend the deadline. E-9 and certain H-2 workers may receive some or all of this through departure guarantee insurance, but the employer still owes any shortfall.
Leaving a job in Korea can produce two separate final payments: unpaid salary and statutory severance pay, called toejikgeum (퇴직금). The eligibility rules are simpler than many employment contracts make them sound, but the final amount can be harder to check because it uses average wages rather than basic monthly salary alone.
This guide covers the statutory minimum for employees. Freelancers, genuine independent contractors, public officials, and people covered by a separate occupational pension can fall under different rules.
Do foreign workers qualify for Korean severance pay?
Yes. Nationality alone does not remove an employee from Korea’s retirement-benefit rules. A foreign employee who meets the service and working-hours tests can qualify whether the job was full-time, part-time, fixed-term, or hourly paid.
The important question is whether you were legally an employee under the employer’s direction and control, not the label printed on the contract. A contract that calls someone a “freelancer” does not settle the issue if the company actually set the hours, place, duties, and working method.
What are the one-year and 15-hour rules?
The usual eligibility test has two parts:
1. You completed at least one continuous year with the same employer.
2. Your scheduled working time averaged 15 hours or more per week over a four-week period.
Continuous service normally runs from the first day of employment through the last day. Contract renewals do not automatically restart the clock when the employment relationship continued without a real break.
If your weekly schedule moved above and below 15 hours, do not rely on a single busy or quiet week. The law uses four-week averages, and periods below the threshold can complicate the service calculation. Keep contracts, schedules, attendance records, and payslips so the covered periods can be reconstructed.
How is the severance amount calculated?
The statutory formula is:
Severance pay = one-day average wage × 30 × total continuous-service days ÷ 365
The one-day average wage normally starts with the wages paid for the three calendar months immediately before the reason for calculation arose, divided by the total calendar days in that period. Certain bonuses, allowances, or excluded periods can change the calculation, so multiplying the final basic monthly salary by the number of years is only a rough check.
As a practical estimate, someone with stable monthly wages and no unusual bonuses will often see about one month of wages per year worked. Use that only as a warning check: the statutory calculation is based on average wages and exact service days, not rounded years.
Before leaving, save copies of:
- The employment contract and every renewal
- Payslips for at least the final three months
- Annual or quarterly bonus records
- Attendance and work-schedule records
- The resignation acceptance or contract-end notice
- Any retirement-pension or departure-insurance statements
When must the employer pay?
The employer normally must pay severance within 14 calendar days after the employment ends. The deadline can be extended when the employer and worker agree, but a company cannot simply announce a later payment date on its own.
Ask for a written breakdown showing the service period, average-wage calculation, deductions, and payment date. Keep the bank record after payment; a line marked “final salary” does not prove that severance was included.
What changes for E-9 and some H-2 workers?
Workers employed through Korea’s Employment Permit System may have departure guarantee insurance (*chulguk-mangi boheom*, 출국만기보험). It is designed to fund the employer’s severance obligation, but it does not reduce the legal minimum.
For covered workers, check both amounts:
- The insurance lump sum available to you
- The statutory severance amount calculated under the retirement-benefit law
If the insurance payment is lower than the statutory severance amount, the employer must pay the difference. The timing and application route for the insurance payment can depend on departure, a change of status, death, or an application made after departure, so verify the current procedure through the Employment Permit System or the Foreign Workers Counseling Center before your final travel date.
What should you do if the payment is missing or too low?
First, send the employer a written request that states your employment dates, the amount received, the amount you believe is missing, and a reasonable response date. Attach copies, not originals, of the contract, payslips, schedules, and bank records.
If the issue is not resolved, contact:
- Ministry of Employment and Labor: dial 1350 in Korea for labor-law guidance
- Foreign Workers Counseling Center: call 1577-0071 for multilingual counseling and help connecting to a complaint process
- Your local labor office for a wage-and-severance complaint
Misclassification, irregular hours, unpaid bonuses, maternity or medical leave, and a transfer between related companies can affect the calculation. For a disputed case, get individualized advice rather than accepting a simple “monthly salary × years” figure.
Estimate take-home pay before comparing your final payment
[Salary Calculator]— Estimate your regular Korean take-home pay first, then compare it with your final salary and the separate severance calculation.
Frequently asked questions
Do I lose severance pay if I resign instead of being fired?
No. The basic entitlement depends on employee status, continuous service, and working hours, not on whether you resigned or the employer ended the job. A separate dispute about damages or notice does not automatically erase statutory severance.
Do part-time workers receive severance pay in Korea?
They can. A part-time employee generally qualifies after at least one continuous year when scheduled hours average 15 or more per week over a four-week period.
Is severance pay included in my monthly salary?
Usually, statutory severance is paid when employment ends, not silently absorbed into ordinary monthly wages. If a contract says severance is included each month, have the arrangement checked because the label does not necessarily satisfy the legal payment obligation.
Is Korean severance pay taxed?
Yes, retirement income can be subject to Korean retirement-income tax, so the net deposit may be lower than the gross statutory amount. The withholding calculation depends on service length and retirement income; request the retirement-income withholding receipt from the payer.
What if I worked for 11 months and 29 days?
The statutory one-year threshold is strict. If your continuous service did not reach one full year, the standard severance entitlement generally does not arise, but check the actual start and end dates and whether an employer-created break or renewed contract changed the service calculation.