Cashing out of Korea

ESL Teachers: Hopefully you will have saved some money along the way but a good portion of the money you make in Korea comes at the tail end of your contract. For example, my contract ends on November 30th and I am paid on the 25th of each month. Therefore, in the last week before I leave I will be owed ￦8,600,000 (plus reimbursement for my flight home).

Last Paycheck ￦2,500,000
One Month Bonus ￦2,500,000
Korean Pension - Your half ￦1,350,000
Korean Pension - School match ￦1,350,000
Damage Deposit ￦900,000

Note 1: I have been told that the 1-month bonus should include any compensation you receive on a recurring basis. Therefore my bonus should be ￦2,500,000 (2,200,000 base, 200,000 rural, and 100,000 for multiple schools).

Note 2: One teacher who left recently was only paid his base salary as his 1-month bonus. Based on what I know now, I think he missed out on ￦300,000.

Note 3: Some legal language about bonus money appears at the bottom of this post.

In order to get your pension money you have to make a trip to the national pension service (NPS). Your school may not send the last of your money to NPS until after you leave Korea, so you won't get this money for a few weeks. You have a few options here, but most people bring their home bank account and routing number to NPS and have them wire it directly. I have been told that your school/co-teacher is not obligated to help you deal with NPS, but hopefully they will. If you are forced to go alone, you won't be the first westerner to walk in to NPS so they should have some understanding of why you are there.

Here are the documents you need for your visit to NPS:
- A completed NPS form requesting lump sum payment. You can download from their website or get it at the office.
- Your ARC, the bank information (routing and account number) for the account where the money should be sent, and a prinout out of your e-ticket showing that you have a departure from Korea in less than 60 days.

Assuming you have not inflicted major damage to your apartment you should get your deposit back. Some teachers pay in ￦600,000 (￦200,000 from each of your first three paychecks) and some, like me, pay in ￦900,000 (￦300,000 from each of your first three paychecks).

Some teachers put their return flights on their credit cards and then get reimbursed by the school. The reimbursement for this should happen while you are still here in Korea. So during your last week you should get your last paycheck, your one month bonus, your apartment deposit, and the cost of your return flight deposited into your Korean bank account. The school will likely do this in more than one transaction, or they may roll it all into one deposit. Either way, it should happen in time for you to go to the bank and either wire it all to your account back home or withdraw it in cash so that your bank account is zero.

Another issue you may run into has to do with the expiration date on your alien registration card (ARC). You ARC will have an end date on it that is exactly a year after you arrive in Korea. For example, I landed at Incheon airport on November 30, 2009 so my ARC expires on November 30, 2010. This should be the day I fly out of Korea. However, sometimes the date on your ARC does not exactly match the date on your contract. If this happens, you will need to extend your ARC by a few days at the immigration office in Gwangju. Again, this is ultimately your co-teacher's responsibility to handle, but you need to know about the issue so that you can ask the right questions.

Sometime during your last week your co-teacher and possibly vice-principal will want to do a walk through of your apartment. I haven't heard of anyone getting into trouble and losing their apartment deposit money. I think the deposit policy was more of a safeguard against midnight runners. The school will probably work with you using your previous month's bills to estimate what your last month's bills will be. The internet, electric, and building maintenance bills come after the fact so they will arrive after you're gone. For example, let's say those three bills total 120,000 won for the last full month before you leave and you're leaving on the 15th. You'll probably estimate the final utilities to be 50% (half the month) and give the school 60,000 won. The school will then be responsible for paying those bills when they arrive.

I have been told that once you decide to leave you should be proactive with your school in getting this process started. Do not wait until two days before your flight leaves to bring this up with your school.

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From the Employee Retirement Benefit Security Act (commonly referred to as 13th month bonus or severance pay):

Article 2 (Definition)
3. "Wages" refer to wages prescribed in Article 2 of the Labor Standards Act;
4. "Average wages" refer to average wages prescribed in Article 2 of the Labor Standards Act;

From the Labor Standards Act:

Article 18 (Definition of Wages)
The term“wages” in this Act means wages, salary, and any other payment to a worker from an employer as remuneration for work, regardless of the designation by which such payment is called.

Article 19 (Definition of Average Wages)
(1) The term“average wages” in this Act means the amount calculated by dividing the total amount of wages paid to the relevant worker during three calender months prior to the date on which the event necessitating such calculation occurred bythe total number of calender days during those three calender months. This shall also apply mutatis mutandis to the employment of less than three months.

(2) If the amount calculated pursuant to the provisions of paragraph (1) is lower than the ordinary wages of the worker concerned, the amount of the ordinary wages shall be deemed the average wages