How does severance pay (퇴직금) work in Korea for foreign employees?

Severance pay (퇴직금) is a legal right for all employees in Korea including foreigners on E-series, F-series, or any work visa, as long as you've worked at least 1 year continuously at the same company for 15+ hours per week. Calculation is straightforward: roughly your last 3 months' average monthly wage multiplied by total years of service. So if you earned 4 million won on average and worked 3 years, you'd receive about 12 million won.

It must be paid within 14 days of your last working day, deposited into your designated retirement pension account (퇴직연금) or transferred directly to your bank account. Most companies after 2019 use the retirement pension scheme (DC or DB type), which means money was set aside during employment and you can withdraw at termination. Foreigners can withdraw the full amount when leaving Korea by submitting your departure ticket and ARC cancellation to the pension provider, with about 6 percent tax withheld for non-residents (versus higher rates for Koreans). If your employer refuses or delays, file a complaint at the Ministry of Employment and Labor (1350, English available) within 3 years. They'll investigate and can impose criminal penalties of up to 3 years jail or 30 million won fines on the employer. The Korea Legal Aid Corporation provides free legal support if you need to pursue it in court.