Your pay dropped in the last 3 months before you quit? Your severance pay is still at least based on your ordinary wage

When does this apply?

• Your work changed from 2 shifts to 3 shifts, and your overtime and night pay went down
• Orders went down, and there is no more overtime or extra-day work
• The company said there is no work, and cut your work days or made you stay home
• Your pay went down a few months before you quit

You get severance pay if you worked continuously for 1 year or more, and your contracted working hours were 15 hours or more a week on a 4-week average (Article 4). It also applies to workplaces with 4 or fewer regular workers (full amount for work done from January 1, 2013). The basics of severance pay are in How to calculate and get severance pay.

How to calculate the average wage, step by step

1. Find the 3-month period. Your leaving date is the day after your last work day. The 3 months before that is the calculation period. Example: if you worked until October 31, your leaving date is November 1, and the period is August 1 to October 31 (92 days).
2. Add up all wages in that period. This includes basic pay, overtime/night/holiday pay, and other allowances. For bonuses, add 3/12 of the amount you got in 1 year. For annual leave pay, add 3/12 of the pay you got for leave days that came in the year before last and that you could not use in the last year before leaving. For other annual leave pay, check with 1350 whether it is included.
3. Divide by the number of calendar days. Not the number of days you worked, but the number of days on the calendar (usually 89 to 92 days). This is your daily average wage.
4. Compare it with your daily ordinary wage. Daily ordinary wage = hourly ordinary wage × contracted working hours per day (Enforcement Decree of the Labor Standards Act Article 6). If you are paid monthly, divide your monthly ordinary wage by the monthly standard hours (usually 209 hours for a 40-hour week) to get the hourly wage. Use the bigger of the two amounts.
5. Severance pay = daily average wage × 30 days × (days worked ÷ 365)

The ordinary wage is pay that is set to be given regularly and equally, like basic pay. Money that changes with the hours you work, like overtime and night pay, is not included.

Example: pay went down after a shift change

The numbers below are an example to help you understand. Calculate your real amount with your own 급여명세서 (payslip).

• Basic pay: 2026 minimum wage, 2,156,880원 a month (10,320원 an hour, 8 hours a day)
• Monthly pay with 2 shifts: 3,000,000원 (basic pay + overtime and night pay)
• Monthly pay after changing to 3 shifts: 2,400,000원
• Work period: exactly 8 years, to make the math simple (30 days × 8 = 240 days of pay).
• Calendar days in 3 months: 92 days. No bonus or annual leave pay.

Case	Daily amount	Severance pay (240 days)
Quit while getting 2-shift pay	9,000,000원 ÷ 92 = 97,826원	about 23.48 million 원
3-shift pay, before comparing with ordinary wage	7,200,000원 ÷ 92 = 78,261원	about 18.78 million 원
3-shift pay, ordinary wage used	10,320원 × 8 hours = 82,560원	about 19.81 million 원

With 3 shifts, the daily average wage (78,261원) is lower than the daily ordinary wage (82,560원). So 82,560원 is used. Because of this rule, severance pay goes down about 1.03 million 원 less. If the average wage is higher than the ordinary wage, the average wage is used as it is.

Periods taken out of the 3 months

If any of the periods below are inside the last 3 months, those days and the wages paid during them are all taken out of the calculation (Enforcement Decree of the Labor Standards Act Article 2(1)).

1. A probation period within 3 months from the day probation started
2. A shutdown period caused by the company (shutdown under Labor Standards Act Article 46)
3. Maternity leave, or leave for miscarriage or stillbirth
4. Time off for treatment of a work injury or work-related illness
5. Parental leave
6. Strikes and other labor dispute actions
7. Time off because of legal duties such as military service (not taken out if you were paid during that time)
8. Time off with company approval because of an injury or illness not related to work, etc.

If the time off is longer than 3 months and there is no period left to calculate, 고용노동부 (Ministry of Employment and Labor) says to use the 3 months before the first day of the time off.

Less overtime by itself is not a period that is taken out. Lower pay you got while coming to work normally is included in the calculation as it is. But days when the company sent you home because there was no work may be a shutdown. If your workplace has 5 or more regular workers, you may get a shutdown allowance for those days. See Shutdown allowance 70%. If your workplace has fewer than 5 workers, check with 1350.

E-9: departure guarantee insurance and the difference

• Every month, the employer pays 8.3% of your monthly ordinary wage as the departure guarantee insurance premium. So even if your overtime pay goes down in the last 3 months, the amount already saved does not go down.
• If the insurance lump sum is less than your legal severance pay, the employer pays the difference (Enforcement Decree of the Act on the Employment of Foreign Workers Article 21(3)). You can ask the insurance company for written confirmation of the lump sum amount (same Article, para. 4).
• The insurance money is paid within 14 days from when you leave Korea. If you apply after leaving Korea, or apply because of a change of visa status etc., it is within 14 days from the application date (Act on the Employment of Foreign Workers Article 13(3)). If you change workplace and stay in Korea, the insurance money is not paid within 14 days after you quit.

Example: if your monthly ordinary wage is 2,156,880원, the premium is about 179,021원 a month, or about 2,148,252원 a year (without interest). For the same person, the legal severance pay is 2,476,800원 a year even with only the ordinary wage (82,560원 × 30 days). The difference is about 330,000원 a year. So be sure to calculate your legal severance pay before you leave Korea. The application steps are in How to get departure guarantee insurance.

Steps

1. Collect your payslips. Keep the payslips for the last 3 months and for a few months before your pay went down. If you got bonuses or annual leave pay, also collect 1 year of records.
2. Mark the 3-month period and the periods to take out. On a calendar, write your leaving date, the calculation period, and shutdown or treatment days.
3. Calculate in two ways. Find your daily average wage and your daily ordinary wage, and use the bigger one. The 고용노동부 severance pay calculator (moel.go.kr/retirementpayCal.do) compares the two amounts for you.
4. E-9 workers: get written confirmation of the lump sum amount from the insurance company. Compare it with your legal severance pay.
5. Ask the company for the calculation details and the difference. Send a text or KakaoTalk message: "Please give me the details of my severance pay calculation. Please pay the difference of ○○○원 by ○ (month) ○ (day)."
6. If the company does not pay, you can file a complaint. Unless the deadline was extended by agreement, severance pay not paid 14 days after leaving is unpaid wages. For E-9 workers, departure guarantee insurance money comes after you leave Korea, so it is different from this 14 days. For the deadline of the difference the company must pay, check with 1350 or 1577-0071. If you plan to leave Korea, ask for the difference before you leave. If you do not get it, you can file a complaint before you leave. File it on the Labor Portal (labor.moel.go.kr) or at your local 지방고용노동관서 (regional labor office).

What to prepare

• 근로계약서 (employment contract) (all renewed ones). The parts that show working hours and shift type
• Payslips for the last 3 months and a few months before, and bank deposit records
• Work schedules and attendance records (papers that show the date your shift changed)
• Texts, notices, or medical certificates that show shutdown or treatment periods
• Departure guarantee insurance lump sum confirmation (E-9)
• 외국인등록증 (alien registration card), passport

Be careful

• Do not quit just because of the severance pay amount. For E-9 workers, the reasons and number of workplace changes are set by law (Act on the Employment of Foreign Workers Article 25). If you quit without the company's agreement, you may not be able to change workplace, or you may lose a change count. Before you sign a resignation letter, talk to 1577-0071 or 고용센터 (Job Center) first. If you stop going to work without telling anyone, the company may say you were absent without permission or that you ran away. See Workplace change – reasons, steps, number of times.
• Check whether things changed from your employment contract. If the company changed the working hours or pay in your contract without your agreement, it can be a separate problem from severance pay. If the employer breaks the working conditions, it can be a reason for a workplace change caused by the company. If they ask you to sign a new contract or agreement that cuts your working hours or pay, talk to 1577-0071 before you sign.
• Check whether your pay or working hours went down by 20% or more. If the company cut the pay or working hours it offered at hiring or usually applied by 20% or more, for 2 months or more in the 1 year before your application, it can be a reason for a workplace change (Ministry of Employment and Labor Notice "Reasons for Workplace Change Not Caused by the Foreign Worker" Article 4(2)). You must apply while the cut is still going on, or before 4 months pass from the day it ended. The example above (3 million 원 a month → 2.4 million 원) is a 20% cut. 고용센터 decides whether a cut in overtime and night pay also counts. If you move for this reason, it does not count toward your number of changes (Act on the Employment of Foreign Workers Article 25(4)). The rules are in Pay different from your contract – the difference and workplace change.
• If you got your severance pay early (interim settlement), your work period is counted again from that point (Article 8(2)).
• If your company has a retirement pension plan, the calculation and payment may be different. Check with the company or the financial company.
• If you do not agree with the amount, do not sign a paper that says "everything has been settled with this amount."
• You cannot claim severance pay after 3 years (Article 10). The right to claim departure guarantee insurance money also lasts 3 years.

Frequently asked questions

Q. I worked 2 shifts for 8 years, but at the end it changed to 3 shifts. Can it be calculated with the average of my 8 years of pay? A. The law sets the average wage from your pay in the 3 months before you quit. Your work period decides "how many years of pay you get," and the "daily amount" is set by the last 3 months. So if lower pay is in those 3 months, your severance pay also goes down. But if your daily average wage is lower than your ordinary wage, your ordinary wage is used. If you are E-9 and left Korea in the middle and came back, the earlier period may have already been settled. See the next question.

Q. During the 8 years, I left Korea, came back, and worked at the same company. A. First check whether you got departure guarantee insurance money at that time. How the earlier period is added to this severance pay can be different in each case. Bring your employment contract and insurance payment records, and check with 1350.

Q. In the last 3 months, the company said there was no work and made me rest for a few days. A. For a shutdown caused by the company, those days and the money you got then are all taken out of the calculation. If your workplace has 5 or more regular workers, you can also get a shutdown allowance for that time separately. For workplaces with 4 or fewer regular workers, the rules may be different, so check with 1350.

Q. By when must I get my severance pay? A. The rule is within 14 days from the day you leave. If there are special reasons, it can be extended by agreement (Employee Retirement Benefit Security Act Article 9). For E-9 workers, the insurance company pays the departure guarantee insurance money within 14 days after you leave Korea (Act on the Employment of Foreign Workers Article 13(3)). For the deadline of the difference the company pays directly, check with 1350.

Where to get help

Office	Phone / website	What they do
외국인력상담센터 (Foreign Workers Counseling Center)	1577-0071	Labor counseling in Nepali, 365 days, 09:00–18:00
고용노동부 고객상담센터 (Ministry of Employment and Labor Call Center)	1350	Severance pay calculation and complaint counseling, weekdays 09:00–18:00
외국인종합안내센터 (Immigration Contact Center)	1345	Questions about leaving Korea and stay, 3-way interpretation, weekdays 09:00–22:00 (after 18:00, only Korean, English, Chinese)
삼성화재 외국인근로자보험 콜센터 (Samsung Fire foreign worker insurance call center)	1600-0266 / from abroad 82-2-2261-8400	Check the departure guarantee insurance lump sum amount, weekdays 09:00–18:00
고용노동부 severance pay calculator	moel.go.kr/retirementpayCal.do	Compares average wage and ordinary wage
고용노동부 Labor Portal	labor.moel.go.kr	File a complaint online