Yes — if you’ve worked in Korea for at least one year and averaged 15 hours a week or more, you’re entitled to severance pay (퇴직금, toejikgeum, literally “departure money”), and your visa type has nothing to do with that first check. What changes by visa is how you actually get paid, whether you’re forced into a pension account you don’t want, and how much of it you can wire home in one shot without a stack of paperwork.
My teammate Mina is finishing her E-7 contract at the end of this month and moving back to Manila, and over lunch two weeks ago she asked me to walk through the whole thing with her — not “am I eligible,” which she’d already Googled, but “what actually happens, in order.” I ended up building a small spreadsheet for her, and out of habit, ran my own numbers too, just to see where I’d land if I quit tomorrow. Here’s what we found, step by step.
Am I Even Eligible for Severance Pay in Korea?
The rule is short: one year of continuous employment at the same employer, with an average of 15 hours or more per week over any four-week stretch. That’s it. Nationality doesn’t appear anywhere in the Labor Standards Act’s severance provisions, and neither does visa type — an E-9 factory worker, an E-7 engineer, and an F-6 spouse-visa holder all clear the same bar. Mina had worked at our company for 14 months, well past the one-year mark, so this part took about thirty seconds to confirm.
The part that trips people up is the word “continuous.” Internal team transfers, promotions, even a short unpaid leave don’t reset the clock — it only resets if you actually quit and get rehired later under a new contract. I got this wrong myself a few years back, telling a junior colleague her one-year count restarted when she moved from marketing to product. It didn’t. Same company, same employment relationship, same clock.
What Happens If My Employer Doesn’t Pay Within 14 Days?
Under Article 36 of the Labor Standards Act, your employer has 14 days from your last working day to pay out your severance, unless both sides agree in writing to extend it for a valid reason. Miss that window without an agreement, and the unpaid balance starts accruing 20% annual default interest from day 15 onward — steep enough that most HR departments treat the deadline as a hard one.
Mina’s last day is set for the 30th, so her 14-day clock runs into the second week of next month. I told her to put the date in writing in an email to HR now, mostly so there’s a paper trail if the payment slips. Not because I expect it to — a paper trail costs nothing, and a missed 14-day window can cost her.
Should I Open an IRP Account — or Can I Skip It?
Since a 2022 amendment to the Employee Retirement Benefit Security Act, severance pay over ₩3,000,000 for anyone under 55 is supposed to land in the worker’s own IRP (개인형퇴직연금, gaeinhyeong toejik-yeongeum, “individual retirement pension”) account by default, not a regular bank account. That’s the rule for a Korean employee changing jobs and staying in the country.
It’s not the rule for someone leaving.
Foreign workers on a work-eligible visa who are exiting Korea for good qualify for an exception — no IRP account required, severance goes straight into a normal bank account. Mina’s payout worked out to roughly ₩3,850,000, based on her last three months’ average wage times her tenure — comfortably over that ₩3,000,000 line, which would have forced the IRP transfer if she were staying. Because she’s leaving, it doesn’t apply.
I ran the same math for myself out of curiosity, since I’ve been here long enough that my own hypothetical payout would clear ₩3,000,000 too. I’m not going anywhere, though, so if I quit tomorrow, mine goes into an IRP whether I like it or not — there’s no exception for people who are just changing jobs within Korea.
E-9 and H-2 Visas: A Completely Different System
If you’re on an E-9 (non-professional employment) or H-2 (working visit) visa, none of the above quite applies the same way. Instead of standard severance pay, you’re covered by exit-completion insurance (출국만기보험, chulguk-mangi boheom, literally “departure-maturity insurance”): your employer deposits 8.3% of your monthly ordinary wage into an insurance policy every month, and when you actually leave the country, the insurer pays out the lump sum directly — not your employer.
That 8.3% isn’t an arbitrary number. It works out to roughly the same monthly-equivalent rate that standard severance math produces, so E-9 and H-2 workers aren’t shortchanged by the swap in mechanism. If the insurance payout somehow comes in under what standard severance law would have required, the employer still has to cover the difference directly.
Everyone else — E-7, the F-2/F-4/F-5/F-6 family of visas, D-10 job-seeker status, and so on — follows the same regular severance path as Korean employees: employer pays directly, IRP rules apply as above, no separate insurance layer involved.
| Visa type | Route | Who pays, and when |
|---|---|---|
| E-9, H-2 | Exit-completion insurance (출국만기보험) | Insurer pays a lump sum when you actually exit Korea |
| E-7, F-2/F-4/F-5/F-6, D-10, others | Standard severance pay | Employer pays within 14 days of your last day (IRP rules apply unless you’re leaving Korea) |
How Much of That Money Can I Actually Send Home?
This is the part nobody’s severance guide mentions.
Foreign residents can wire up to $50,000 a year out of Korea without submitting income documentation, but any single transfer over $5,000 requires proof — an employment certificate, a payslip, something showing where the money came from. I wrote about this exact threshold back in July, when Korea bumped the no-documentation cap for its own citizens to $100,000; foreign residents didn’t get that increase, and the $50,000-a-year, $5,000-per-transfer split is still what applies to us.
Mina’s severance alone, around ₩3,850,000, converts to roughly $2,900 — under the $5,000 per-transfer line, so that piece alone would have gone through without extra paperwork. But she also had a small pension refund to collect on her way out, and combining the two pushed one planned wire to just over $6,800. That crossed the per-transfer threshold, so her bank asked for a copy of her employment contract and a bank statement showing the deposit before releasing the transfer.
My wife, who talks through every big financial decision out loud before she’ll commit to it, wanted to know why Mina couldn’t just split the amount into two smaller wires under $5,000 each instead. You can, technically, and some people do — but banks watch for exactly that pattern, and structuring transfers to dodge a documentation threshold is its own problem if a bank’s compliance team flags it. Simpler to just have the paperwork ready.
The Order I’d Actually Follow, Start to Finish
Between Mina’s case and my own hypothetical numbers, here’s the sequence that actually matters, in the order it comes up — not the order most guides list it in.
| Step | What to check or do | Number to remember |
|---|---|---|
| 1. Confirm eligibility | One year of continuous work, 15+ hrs/week average — visa type doesn’t matter here | 1 year / 15 hrs |
| 2. Watch the clock | Employer must pay within 14 days of your last day, or interest starts | 14 days / 20% annual |
| 3. Check the IRP question | Payout over ₩3,000,000 and under 55 normally forces an IRP transfer — unless you’re exiting Korea | ₩3,000,000 / age 55 |
| 4. Know your visa’s route | E-9/H-2 → exit-completion insurance from the insurer; other visas → standard severance from the employer | 8.3% monthly accrual |
| 5. Plan the wire home | Under $5,000 per transfer, no paperwork; over that, bring proof of income | $50,000/yr, $5,000/transfer |
| 6. Keep documents ready before you leave | Employment certificate, recent payslips, bank statement — ask HR for these before your last day, not after | — |
One thing worth knowing even though it didn’t end up mattering for Mina: severance income in Korea is taxed separately from your regular salary, under its own bracket with a career-length deduction and a converted-wage deduction built in. Take it as a pension-style payout instead of a lump sum, and the tax bill can drop by as much as 40%. That mostly matters for people who stay in Korea and roll the money into an actual pension product rather than cashing out on their way to the airport — never really Mina’s situation, but worth a five-minute look if your payout is large and you’re not in a rush to leave.
Mina’s flight is booked for next month. Her spreadsheet has six rows and a checkbox next to each one, and as of last week, four of them were already checked off. If I ever actually leave this job — which, for the record, I have no plans to — I now know exactly which box I’d be stuck on longest: the IRP one, because I’m staying in Korea, so I don’t get her shortcut.