Korea Severance Pay Calculator for Foreign Workers

Yes, if you meet the same two conditions as anyone else: one year of continuous work (the calculator counts 365 days or more) and an average of at least 15 scheduled hours a week (Retirement Benefits Act Art. 4(1), our translation). The Act applies to every workplace that employs workers, and its text does not mention nationality or visa (Art. 3). The Labor Standards Act also bars unequal working conditions because of nationality (Art. 6, our translation). The point about nationality is our reading of the text; we found no one-line official English statement. Household employment and workplaces with only live-in relatives are outside the Act (Art. 3).

The Act does not require severance pay for under one year of continuous work: an employer does not have to set up a severance system for such a worker (Retirement Benefits Act Art. 4(1), our translation). A contract or the work rules can promise more, and this calculator does not cover that. The calculator counts days from your first to your last day of work. 365 days or more qualifies, as in the Ministry of Employment and Labor's own calculator, and 364 days does not. The law does not say how the two ends of one year are counted, so within one day of the line, check with MOEL. For E-9 and H-2 workers with under one year, the insurance lump sum goes to the employer (Enforcement Decree of the Act on the Employment of Foreign Workers Art. 21(2), our translation).

In most E-9 and H-2 jobs your employer must join the Departure Guarantee Insurance (or a trust) for you and pay into it every month, to cover severance pay when you leave Korea (Act on the Employment of Foreign Workers Art. 13(1), our translation). Once the employer joins, the law treats it as having set up a severance pay system (Art. 13(2)). So the insurance takes the place of paying severance pay directly, apart from the difference described in the next answer. E-9 and H-2 are not on the Decree's list of visas outside this system (Decree Art. 2). A worker with a year or more of continuous work can claim the lump sum from the insurer after leaving Korea (a temporary trip does not count), or on death or a change of visa status (Decree Art. 21(2)). The Decree leaves out some employers: those at construction-industry workplaces under the special-employment confirmation (Act Art. 12(1) item 1 and Decree Art. 21(1), our translation), and employers of workers with less than a year left on their work permit. If that is you, we cannot say how your severance pay is paid; ask MOEL. We found no English claim guide, so ask your employer or the insurer how to apply.

When your job ends or your visa status changes, and the lump sum is less than the severance pay under the Retirement Benefits Act Art. 8(1), your employer must pay you the difference (Decree Art. 21(3), our translation). Enter the amount on your insurer's written confirmation, and the calculator shows both amounts and the difference. You or your employer can ask the insurer to confirm the amount in writing (Decree Art. 21(4)). The Decree gives no deadline for paying the difference, so we show no date for it. Our severance figure is the legal minimum formula, and your contract may promise more.

Severance pay is due within 14 days of the day the right arises, and the calculator shows your last work day plus 14 days (Retirement Benefits Act Art. 9(1), our translation). The employer and worker can agree to a later date in special cases. After the due date, late interest of 20% a year can apply (Labor Standards Act Art. 37 and its Enforcement Decree Art. 17, our translation). There are exceptions (Art. 37(3) and Decree Art. 18), and we found no statement on whether an agreed later date moves the start of the interest. The insurance must be paid within 14 days of your departure from Korea, or within 14 days of the day you apply if you apply after leaving or because of a visa change or death (Act on the Employment of Foreign Workers Art. 13(3)). The right to claim ends after 3 years: for insurance from the day the right arises (Art. 13(4)), and for severance pay under the Retirement Benefits Act Art. 10. We found no statement on whether a due date on a weekend or holiday moves.

It can be. Retirement income tax applies to tax residents whatever their nationality (Income Tax Act Art. 4 and 22, our translation), and the payer withholds it (Art. 127). The calculator shows a rough figure only if you say you are sure you are a tax resident; a tax resident has a home in Korea or has stayed 183 days or more (Art. 1-2). The 19% flat tax in our salary calculator is for employment income. Our reading of the Restriction of Special Taxation Act Art. 18-2 (our translation) is that it does not cover retirement income, and we found no tax office interpretation. We could not confirm the rules for non-residents, the year you leave Korea, tax treaties, or how an insurance lump sum is taxed. Check your withholding receipt.

They are two separate systems. Severance pay comes from the Retirement Benefits Act and is paid by your employer or the insurer. The pension refund comes from the National Pension Act and is paid by the National Pension Service. Whether you qualify for each is decided separately. Use our National Pension Refund Calculator for the refund.

Unpaid severance pay that is not paid within 14 days of leaving counts as wage arrears, according to the Ministry of Employment and Labor Labor Portal. You can file a complaint online on the Labor Portal, or visit the regional labor office that covers your workplace. We could not confirm whether the portal can be used in English. Do not wait too long, because the right to claim ends after 3 years (Retirement Benefits Act Art. 10, our translation). If you are an E-9 or H-2 worker, you can also ask the insurer for a written confirmation of the insurance amount (Decree Art. 21(4)).