Last verified: September 22, 2026 · severance eligibility, average-wage calculation, payment deadline and E-9/H-2 Departure Guarantee Insurance rules checked against current Korean law and official EPS guidance.
If you worked continuously for at least one year and your prescribed weekly hours averaged at least 15 hours over four weeks, Korean severance rules will often apply. Your nationality does not create a separate, lower severance formula.
For the ordinary severance-pay system, the statutory floor is generally 30 days of average wage for each year of continuous service. E-9 and H-2 workers have an additional layer: Departure Guarantee Insurance. That insurance does not allow the employer to pay less than the statutory severance amount.
1. Did you complete at least one year of continuous service?
2. Did your prescribed weekly hours average at least 15 hours?
3. What is the correct average wage for the severance calculation?
4. If you are covered by EPS insurance, is the insurance payout lower than the statutory severance amount?
1. The one-year rule has a second condition
Korea's Employee Retirement Benefit Security Act generally requires an employer to establish a retirement-benefit system for employees. Two common exclusions matter here: a worker with less than one year of continuous service, and a worker whose prescribed weekly hours average less than 15 hours over a four-week period.
That is why “I worked there for 13 months” is not always the complete eligibility test. Check the agreed weekly hours as well.
| Your situation | First question | What to keep |
|---|---|---|
| Full-time employee for 18 months | Was the employment continuous? | Contract, payroll, employment dates |
| Part-time employee for 2 years | Did prescribed weekly hours average at least 15? | Contracts and schedules |
| Several short contracts with the same employer | Was there a real break in the employment relationship? | Each contract, payroll history, work records |
| E-9 worker | Do the general severance conditions apply, and what EPS insurance is recorded? | Contract + EPS/insurance records |
If a contract was repeatedly renewed, do not assume each paper renewal automatically reset continuous service. The real employment relationship and any actual break matter.
2. The usual statutory formula starts with average wage
For a standard severance-pay arrangement, the law sets a floor equivalent to at least 30 days of average wage for every year of continuous service.
Average wage is generally based on the wages paid during the three months before the calculation date, divided by the total calendar days in that period. Some periods and payments receive special treatment, so “last monthly salary × years worked” is only a rough orientation.
If the applicable 30-day average-wage amount were ₩2,700,000 and continuous service were exactly 2 years, a rough statutory-floor illustration would be about ₩5,400,000.
This is an illustration, not a substitute for the actual average-wage calculation.
If your final three months included unusual unpaid leave, an industrial accident, maternity-related leave or another exceptional period, check the statutory calculation rather than forcing the ordinary three-month arithmetic onto the case.
3. Severance is normally due within 14 days after retirement
Under the ordinary severance rule, the employer must pay severance within 14 days from the date the payment reason arises. If there are special circumstances, the payment date can be extended by agreement between the parties.
If the company asks to delay payment, keep the proposed date and your agreement—or refusal—in writing.
If the employer says severance was already included in your monthly salary, ask for the legal basis and the actual payment record. A sentence in a contract does not automatically erase the statutory retirement-benefit requirement.
4. E-9 and H-2 workers need to check Departure Guarantee Insurance separately
For covered E-9 and H-2 employment, the employer must enroll in Departure Guarantee Insurance or trust to secure retirement benefits.
This is an employer-side mechanism designed to secure severance for the foreign worker. It is not an ordinary employee deduction that should simply disappear from your paycheck.
1. Statutory severance — calculated under the Employee Retirement Benefit Security Act.
2. Departure Guarantee Insurance payout — the amount payable through the EPS insurance system when the relevant conditions are met.
3. Employer shortfall — if the insurance payout is lower than statutory severance, the employer must pay the difference.
5. Compare the insurance amount with the statutory severance amount
If the Departure Guarantee Insurance amount is lower than the severance amount required under the retirement-benefit rules, the employer must pay the shortfall to the foreign worker.
Statutory severance calculation: ₩6,200,000
Departure Guarantee Insurance payout: ₩5,650,000
Difference to examine with the employer: ₩550,000
These numbers are illustrative. Your actual entitlement depends on your wage and service record.
Do the comparison before closing your Korean bank access or losing easy access to payroll records.
6. Check the EPS insurance record before departure
EPS and the foreign-worker insurance system let workers check insurance information and claim procedures. Do not wait until you are at the airport to discover that an amount or account detail still needs to be confirmed.
The Departure Guarantee Insurance claim right also has a limitation period. Current law provides a three-year limitation period from the payment event.
7. Workplace change does not erase the records from the job you are leaving
An E-9 workplace change has its own procedure and deadlines. For severance purposes, preserve the records from the employer you are leaving: start date, end date, contract, wage records and insurance information.
If you have not completed the qualifying period, the treatment of the insurance amount can differ. Do not describe Departure Guarantee Insurance as a personal savings account; it is a statutory retirement-benefit mechanism with qualification and payment rules.
8. If the employer does not pay the shortfall
Keep the severance calculation, insurer's confirmed amount, contract, wage records and the employer's response.
If ordinary severance or the required shortfall remains unpaid, the issue moves into the wage-arrears route. The Ministry of Employment and Labor's 1350 service and the competent labor office can explain the complaint process.
Related Video: A Foreign Worker Severance Case in Korea
This labor-law case video focuses directly on unpaid severance involving a foreign worker in Korea. It is used as practical background; the statutory rules and EPS sources below control the calculation.
Sources
- Korea Law Information Center — Employee Retirement Benefit Security Act
- Easy Law — foreign workers, severance and Departure Guarantee Insurance
- Korea Law Information Center — Departure Guarantee Insurance
- Employment Permit System — foreign-worker insurance
- HRD Korea — Departure Guarantee Insurance
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