Who gets severance pay
- You worked for the same employer for at least 1 year, and
- you worked 15 hours a week or more on average.
Nationality, visa type and full-time or part-time do not matter. Your employer must pay within 14 days of your last day, unless you both agree to a later date.
How it is calculated
Severance pay = average daily wage × 30 days × (days worked ÷ 365).
The average daily wage is everything you were paid in the 3 months before you left, divided by the number of days in those 3 months. Bonuses and pay for unused annual leave from the past year are added in proportionally (3/12). If the result is lower than your ordinary daily wage, the ordinary wage is used instead.
Workers on E-9 and H-2 visas
Employers of E-9 and H-2 workers pay into a departure guarantee insurance (출국만기보험) that you claim when you leave Korea. If it is less than your full severance, the employer must pay the difference.
Severance is taxed separately as retirement income, at a much lower rate than salary. For a few years of service the tax is usually small. The amount above is before that tax.
Unpaid severance? The Ministry of Employment and Labor helps for free: call 1350.