Severance pay and departure guarantee insurance: what to check before leaving
If you worked one year or more, you can generally get severance pay. How it differs from E-9 departure insurance and the pension lump-sum.
When you leave a job in Korea, check your severance pay (퇴직금). If you are an E-9 worker, also check your departure guarantee insurance (출국만기보험). Both are different from the National Pension lump-sum refund, which you claim from NPS.
Severance pay (퇴직금)
- Who: you worked for the same employer for 1 year or more without a break, on average 15 hours or more per week.
- How much: at least 30 days of average wage for each year of service (the legal minimum). Average wage is generally based on your wages in the last 3 months.
- When: it must generally be paid within 14 days after you leave, unless you and your employer both agree to extend the date.
- Tax: retirement income tax is withheld from it. Thanks to deductions the tax is often small, but it depends on your pay and years of service.
E-9 workers: departure guarantee insurance
Employers of E-9 workers must subscribe to departure guarantee insurance (출국만기보험) and pay monthly premiums. The money is saved up for your severance pay. In general, it is paid to you after you leave Korea. Procedures can change, so check the insurer’s or EPS (Employment Permit System) notice for the current steps. If the insurance amount is less than your legal severance pay, your employer must pay the difference.
There are also insurances that you subscribe to yourself as an E-9 worker: return-cost insurance (귀국비용보험), which helps with costs when you go home, and accident insurance (상해보험). Check your policy documents for what they cover and how to claim.
Severance, departure insurance and pension: the differences
| Item | Severance pay | Departure guarantee insurance (E-9) | National Pension lump-sum |
|---|---|---|---|
| Who pays in | Employer | Employer (monthly premiums) | You and your employer |
| Who can get it | Workers with 1 year+ of service and 15+ hours a week | Generally E-9 workers with 1 year+ of service (it counts toward severance pay) | Depends on visa and nationality |
| When | Generally within 14 days after leaving | Generally after you leave Korea | Generally after departure is confirmed |
| Where to ask | Your employer; Ministry of Employment and Labor | The insurer; EPS notices | National Pension Service (NPS) |
Before you leave: checklist
- 1
Check your contract dates
Confirm your start date and last working day. They decide whether you reach 1 year and how many years count.
- 2
Request a wage statement
Ask for your payslips or a wage statement, especially for the last 3 months.
- 3
Confirm your bank account
Decide which account will receive the money. Tell your employer and the insurer before you leave.
- 4
Contact the insurer (E-9)
Check when and how departure insurance and return-cost insurance are paid.
- 5
Keep your papers
Keep payslips, your contract and bank records until everything is paid.
Before you act
Official sources
Written by KOVIA 편집팀
