Severance pay (퇴직금)

Work a year, you're owed it — how severance works and how to claim what's yours.

In short

Severance pay (퇴직금) is a legal right, not a bonus. Work 1+ year continuously and you're owed it when you leave — no matter the reason (you quit, contract ended, even fired).
Roughly 1 month's average wage per year worked. It's based on average wage (평균임금) — including fixed allowances and bonuses — not just base salary.
Your visa and nationality don't matter. Employers who say "you resigned" or "your visa doesn't qualify" are wrong.
Must be paid within 14 days of your last day. Late = 20% annual interest. You have 3 years to claim before the right expires.

Severance is one of the most valuable rights foreign workers have — and one of the most commonly cheated. Employers sometimes bank on departing foreigners (especially those leaving the country) not following up. Know the rules and the money is yours.

Who's eligible

Under the Guarantee of Workers' Retirement Benefits Act, you qualify if you:

Worked continuously for 1 year or more at the same employer
Averaged 15+ hours/week (roughly 60+ hours/month)
Are classified as an employee (근로자) — working under the employer's direction (not a genuine independent contractor)

This applies whether you quit, were let go, your contract ended, or you left by mutual agreement. Courts have repeatedly confirmed foreign teachers, factory workers and office staff are all covered. Nationality is irrelevant — even undocumented workers have been found eligible.

"You resigned, so no severance" is false. Voluntary resignation after 1+ year still qualifies. So does being fired — even termination for cause almost always keeps your severance (forfeiture is rare and hard to justify).

How it's calculated

The legal minimum is 30 days of average wage for each year of continuous service. The key is average wage (평균임금), based on your total pay over the last 3 months before leaving — which includes fixed monthly allowances, regular bonuses (a portion of annual bonuses is added in) and unused annual-leave pay, not just your base salary (기본급).

Rough example: if your average monthly wage works out to ₩3,500,000 and you worked 2 years, you're owed about ₩3,500,000 × 2 = ₩7,000,000 (partial years are prorated). Use the official MOEL 퇴직금 계산기 (severance calculator at moel.go.kr) to get an exact figure — and save the printout as evidence.

Watch the "base salary only" trick. A common tactic against foreigners is calculating severance on base pay alone, leaving out allowances and bonuses — which lowballs you significantly. Always calculate on average wage.

When you get paid

Your employer must pay severance (and any final wages/unused leave) within 14 days of your last working day. The only legal way to delay is a written agreement you sign — don't sign one if you're leaving Korea soon. If they pay late without your consent, they owe 20% annual delay interest on the unpaid amount.

If your employer won't pay

Calculate the exact amount

Run the MOEL severance calculator yourself and save/print it — don't rely on your employer's math.

Gather evidence

Passport + ARC, your employment contract, 12+ months of bank statements showing salary, final 3 months' payslips, and any messages where you asked for payment and they refused or delayed.

File at the Labor Office

You can't use a regular city hall or police station — file a complaint at the Ministry of Employment and Labor (call 1350, press for English). It's free and open to foreign workers. See our unpaid-wages guide.

Act within 3 years

The statute of limitations is 3 years from your last day. Miss it by a day and the right is permanently gone — so don't wait, especially if leaving Korea.

Things employers can't legally do

Deduct "training fees," visa costs or airfare from severance as a penalty for leaving early — penalty clauses are illegal (Labor Standards Act Art. 20), even if you signed them.
Bundle severance into your monthly salary — illegal unless it's a certified retirement-pension plan (퇴직연금).
Pay below the legal minimum — any agreement to less is unenforceable.

Don't sign extra paperwork when leaving. If something looks off — deductions, waivers, "housing cost" claims against your severance — pause and call 1350 (press for English) before signing anything.

Common questions

I resigned voluntarily — do I still get it?

Yes, as long as you worked 1+ year. The reason for leaving doesn't affect your right to severance.

What if I worked 11 months?

Under 1 year of continuous service means no statutory severance. Even a few days short of a year matters — time your departure if you're close.

Is severance taxed?

Yes, but retirement income is taxed under a separate, generally favorable schedule — not lumped with your salary. Your employer withholds it.

What if I already left Korea?

You can still claim within 3 years — keep all evidence. But it's far easier to resolve while you're still here, so sort it before you go.

Sources: Guarantee of Workers' Retirement Benefits Act, Labor Standards Act (Arts. 20, 34), Ministry of Employment and Labor (moel.go.kr) severance calculator. 14-day payment and 3-year limitation per 2026 law.

Last verified: July 2026. Calculation details vary with your pay structure — use the official MOEL calculator and call 1350 for your case. General information, not legal advice.

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