Severance+Pay

=Severance Pay (퇴직금)=

= = 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, which effects all government employees). 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 2+, then your total severance pay will be calculated based on your level 2+ 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 most likely see the money within a month of the end of your contract. 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 (since the money will come from your school, NOT from the DMOE or EPIK).

Your school should receive an official document about 1.5 - 2 months prior to the end of your contract, reminding them that they have to apply for your severance pay. While this process should be fairly simple, it's never a bad idea to give your co-teacher a friendly reminder to make sure that it's been done (this is in the case that you will be completing your contract and not renewing). You will not have to fill out of submit any forms. The deadline for application is usually about one month prior to the end of your contract (before you leave on vacation).

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


 * There are a handful of exceptions that allow for early distribution of severance pay (in the case of renewing NET's). Read on for more information:***