Leave on day 364 and you are owed nothing. Stay one more day and your employer owes you roughly a month's wages for that year — and another month for every year after it.
Nothing about your nationality changes that. The Labor Standards Act forbids discriminatory treatment in terms and conditions of employment on the ground of nationality, and the retirement benefit law carries no exemption for foreign employees. The two things that do change it are tests most people never check until they are already out the door.
And once you have left, the clock is short: 14 days, not "whenever payroll gets to it".
The two tests that decide whether you are owed anything
Article 4(1) of the Act on the Guarantee of Employees' Retirement Benefits requires every employer to establish at least one retirement benefit scheme — with two exceptions written into the same sentence:
- employees whose continuous service period is less than one year, and
- employees whose average weekly working hours over a four-week period is less than 15 hours.
Both are objective. Neither depends on what your contract calls you, on your visa type, or on whether your employer meant to owe you anything.
The one-year line is the one that catches people. A twelve-month contract that ends on its last day usually clears it; a contract that quietly ends a week early does not. If you are close to the line and the end date is negotiable, that week is worth more than it looks.
How much — 30 days' average wages for each year
Article 8(1) sets the floor: a retirement allowance system must "pay a retiring employee a prorated amount equivalent to average wages earned for 30 days for each year of his or her continuous service."
Two words there matter. Prorated means a partial year counts proportionally once you are past the first year — three and a half years is three and a half times the annual figure, not three. And floor means exactly that: an employer may pay more under its own rules, never less.
"Average wages" is not your monthly salary
This is where estimates go wrong. The Labor Standards Act defines average wages as:
the amount calculated by dividing the total amount of wages paid to a relevant employee during three calendar months immediately before the day grounds for calculating his or her average wages occurred by the total number of calendar days during the three months.
So it is a daily figure, built from the last three calendar months, divided by calendar days — not working days. Thirty of those days is your annual entitlement.
Because it is the total amount of wages, it is wider than base pay. Regular allowances and bonuses that count as wages go in. Because it is divided by calendar days, a three-month window containing 92 days produces a slightly lower daily figure than one containing 90.
Why your last three months matter more than you think
Your entire severance figure is built from one quarter of your employment — whichever quarter happens to come last.
A quarter with heavy overtime pushes it up. A quarter with unpaid leave, reduced hours, or a long stretch of no bonus pushes it down. Two people with identical five-year histories can walk away with noticeably different numbers because of what their final three months looked like.
If you have any say in timing — and resigning employees often do — this is worth a minute with a calculator before you name a date.
The 14-day rule
Article 9(1) of the retirement benefits act: where an employee retires, the employer "shall pay such employee a retirement allowance within 14 days from the date when the grounds for payment occurs." The same 14 days appears in Article 36 of the Labor Standards Act for wages and other money owed on retirement or death.
Both provisions allow the deadline to be extended by agreement between the parties. An agreement is not an announcement. "We process severance at the end of the following month" is a statement of their habit, not an extension you consented to.
What happens if they miss it
Article 37 of the Labor Standards Act makes a late employer liable for interest from the day after the due date. The Act sets a ceiling of 40% per year and leaves the actual rate to the Presidential Decree; Article 17 of the Enforcement Decree fixes it at 20/100 per annum.
Twenty percent a year on a figure that is often several months' pay is not a rounding error, and it is the number to have in mind if you are being asked to "wait a little". The Enforcement Decree also lists grounds that exclude the interest, so it is not automatic in every case.
Nationality is written out of the question
Article 6 of the Labor Standards Act: an employer "shall neither discriminate against employees on the basis of gender, nor take discriminatory treatment in relation to terms and conditions of employment on the ground of nationality, religion, or social status."
Severance is a term of employment. There is no foreign-employee carve-out in the retirement benefits act, and no clause making it conditional on visa status. An employment contract that says otherwise does not override the statute — statutory minimums are not waivable by agreement.
If you are leaving the country
Timing is the practical problem. Fourteen days from your last working day can fall after your flight, and a Korean bank account closed on the way out is a bank account the money cannot reach.
Two things are worth sorting before you go: keep the account open until the payment lands, and have the calculation in writing — the three-month wage total, the day count, and the service period they used. Chasing a number from abroad is harder than questioning it while you are still here.
Severance is also separate from the national pension lump-sum refund, which runs on its own rules and its own timeline. Getting one does not affect the other.
Retirement allowance or retirement pension
The Act covers more than one kind of scheme. Many employers now run a retirement pension (DB or DC) rather than paying a lump sum directly, which means the money sits with a financial institution and is claimed through them.
The entitlement is the same; the route is different, and the paperwork is different. If your payslips show a monthly contribution to a retirement pension account, ask which type it is — it changes who you file the claim with and how long it takes.
Tax
Severance is taxed as retirement income, under its own schedule rather than as ordinary salary. The amount withheld is normally handled by the employer or the pension provider at payment.
If you elected the flat tax rate on your employment income, that election concerns employment income and does not make retirement income disappear — the two sit in different boxes. The employment-income side is covered here: Korea's Flat Tax for Foreign Workers 2026: 19% Now, 21% Proposed From 2027.
What I could not confirm
Three things are deliberately left open. The exact composition of "wages" for the three-month total turns on which allowances in your payslip qualify, and that is a payslip-by-payslip question. The grounds that exclude late-payment interest are set in the Enforcement Decree and depend on circumstances such as insolvency proceedings. And the retirement income tax calculation involves service-length deductions that no blog post can run for your numbers. For all three, the Ministry of Employment and Labor's counselling line and a labour attorney are the right stop.
The short version
One year of continuous service and 15 hours a week averaged over four weeks are the two tests. Clear them and you are owed at least 30 days' average wages for each year of service, where average wages means the last three calendar months' total wages divided by the calendar days in those months. Payment is due within 14 days of leaving unless you agreed otherwise, and late payment carries 20% annual interest under the Enforcement Decree. Nationality is explicitly not a permitted ground for different treatment.
Two things sit next to this one if you are working in Korea. What you are owed when a job ends for other reasons is in Unemployment Benefits in Korea for Foreign Workers 2026, and the contributions coming out of your pay — and what comes back when you leave — are in National Pension in Korea for Foreign Workers 2026.
Sources
- Act on the Guarantee of Employees' Retirement Benefits, Articles 4, 8 and 9 — the one-year and 15-hour tests, the 30-days-per-year floor, and the 14-day payment deadline.
- Labor Standards Act, Article 2(1)6 (definition of average wages), Article 6 (equal treatment, including nationality), Article 36 (settlement of payments within 14 days) and Article 37 (interest for delayed payment, 40% annual ceiling).
- Enforcement Decree of the Labor Standards Act, Article 17 — the late-payment interest rate of 20/100 per annum — and Article 18, which lists the grounds for exclusion.
All four read in the official English translations at the Korea Law Information Center on 8 October 2026. English translations are provided for reference and the Korean text governs. This is general information, not legal advice; for a specific case, contact the Ministry of Employment and Labor or a certified labour attorney.
