Severance Pay (퇴직금)

*This is just a general explanation of severance pay for you to get an idea of how the payment is processed, for the specific breakdown and explanation of your severance pay you will need to inquire your question over to your school's financial administrator.

You are entitled to severance pay after the completion of your first year (52 weeks) of work, equaling approximately one month's worth of salary (based on the previous, recently completed contract). If you only stay with the DMOE for only one year, you may collect this at the end of your contract period.

If you decide to renew, your severance pay will be held and paid as a lump sum until the completion of your contracts with the DMOE (as according to the "Employee Retirement Benefit Security Act," enacted by the Korean Ministry of Employment and Labor). Your severance pay will then be calculated according to the current pay level at the time of completion. So for instance, if you finish 3 years and your last pay level is 1, then your total severance pay will be calculated based on your level 1 pay (even though you spent 2 years at lower pay levels).

The payment cannot be processed until after the completion of your contract, so you will see the money shortly after the end of your contract. Please keep in mind that it may take roughly two to three weeks after your last day of work to receive your severance pay as your school needs to make all the necessary deductions after processing your year end tax settlement, health insurance payment, etc. For those of you finishing your contract, you should work out with your administrative office whether you would like it sent to a bank account back home (the money will come from your school, NOT from the DMOE or EPIK) if you plan to leave right after the last day of the contract or before the payment is made. Please communicate with your school's financial administrator on roughly when you can expect your severance pay.

Severance pay is subject to taxation, regardless of your current tax exempt status.