Korean Job Discussion Forums

[oatmeal]

When I first arrived in 2010, my contract started on September (GEPIK starting at 2.3m salary).
They also paid out severance each year. So I received my 2.3m severance on September 2011, and another 2.3m on September 2012. But in 2013, GEPIK changed their policy and said they would be holding the severance and not giving it out anymore each year. So we would only receive the severance until we complete the contract and leave the school.

I stayed for another 3.5 year. So that means they withheld my severance on Sept 2013, Sept 2014. In Sept 2014, GEPIK changed everyone over to align with the March starting date, so in Sept 2014, we only signed a 6 month contract so that we could sign a full 1 year contract in March 2015, so this was only half a year, but that is still half a year's severance. Then after signing a full 1 year contract from march 2015 to feb. 2016.

So in total, they withheld 3.5 years of severance. Now the new policy also stated that the severance pay out would be based on the latest pay I was getting. So since I finished at a pay scale of 2.5m per month and up from 2.3m when I started, that means my severance should work out to 3.5 (3 years and a half) x 2.5 (salary) = 8.75m

I'm also supposed to receive my 900,000 won security deposit I originally submitted to them back in 2010, so my total should work out to 9.65m based on my calculations. As far as I know, there is no deductions like taxes or anything from severance. At least in 2011, and 2012 when I received my severances, it was always smack dab on the dot 2.3 m (which was my pay rate at the time).

So why did I only receive 7.98 m back? I'm missing 1.67 m won.
Obviously, I can only know for sure by asking my school (which I have done and am in the process of getting information), but just wondering if my calculations are correct or if there is something I might be missing that I didn't know? 9.65m is what I should be owed correct? (assuming that I get all my 900k security deposit back which I should since there is no damages, no outstanding bills or anything).

[oatmeal]

I'm still trying to get it figured out but my school says something about a social insurance deduction? I'm not sure what that is. Is that something to do with the severance or something to do with everyone when their contracts are up? What deductions are they talking about? I've never received any deductions on severance pay. It was always exactly the amount my pay rate was, as the contract said.

[tophatcat]

Did they say 'social insurance' or 'soju insurance'…?

[Aine1979]

Severance should be taxed. Pension and medical shouldn't come out, but it definitely should be taxed. It looks to me like they haven't given you back your housing deposit, and also haven't paid you 2.5mil x3.5 years, but paid what your salary was for each year. You definitely need to speak to your school.

[trueblue]

[oatmeal]

Yeah, the security deposit I'm pretty sure wasn't part of this payment I received. The paper that I got from them only shows the severance.

I was pretty sure the new policy stated that severance would be paid based on the last pay rate/scale I was at, so it should be 2.5 each year.

The paper I got shows 2012 at 2.3, 2013 at 2.5, 2014 at 1.439m for the 6months contract, then 2015 2.403m. When I add it up, it's almost the same thing 8.643 vs 8.75m but I'm not sure why they even made it so confusing like that. It should just have shown 2.5, 2.5, 1.25, and 2.5.

Ok, so severance pay is taxed. That makes sense. So that explains the 245,000k won for income tax and the 45k won for residence tax.

But I'm still not sure what this additional 400,000k won is for social insurance? Never heard of that.

[oatmeal]

Here is a picture of the paper:

http://i67.tinypic.com/ao9i6x.jpg

8.643 total (not 8.75) and when I deduct the income tax, residence tax, and that 400,000 social insurance thingy, I get 7.95m which was what I received in my bank.

[Fox]

[BigBuds]

If you are on an E2 visa you are not legally obligated to pay unemployment insurance/tax as you cannot legally claim it.

[isitts]

[Fox]

[oatmeal]

Oh thanks, so that means at a later time I'll get that 400,000 won back?
I think that's what my CT was trying to say to me also but didn't understand.

[Alias77]

I'd like to draw your attention to the legal points regarding severance from a nasty experience that I had last year in case it helps. It might hold important information about calculating your severance.

Korean companies will feast upon your ignorance of Korean law and pocket the rewards with a toothy grin. It's quite difficult, unless you go through the whole negative experience like I did, to get a clear understanding of your rights and the wording of the law so that you can prevent this.

http://forums.eslcafe.com/korea/viewtopic.php?p=2987528#2987528

[Feebie]

[isitts]