South Korea has a national pension scheme where employers and employees each make a monthly contribution toward a pension fund, which is managed by the National Pension Service. Foreigners — depending on the agreement their government has worked out with South Korea — contribute as well, which makes for a nice little nest egg of about one month’s pay per year. Most ESL jobs will include pension, as well as insurance and paid vacation. If yours doesn’t, run!
Here’s a quick guide for American expats on the easiest way to get your pension as a lump-sum refund when you leave South Korea.
*Note* This information is current as of February 2018. It’s possible things have changed since then. Please be sure to double-check the information here to make sure it’s still accurate!
When am I eligible to apply for my pension refund?
You can apply for your pension refund as early as one month before your departure date. Be sure to book your flight beforehand, and that your departure date is within the allowances of your visa.
What documents do I need?
You’ll need the following when you go to apply for your pension refund:
- Application form (grab it from the NPS website if you like, or just ask for the form when you go to file at the office)
- Passport
- Alien Registration Card
- Proof of your bank account (a voided check, bankbook, or account statement is sufficient)
- Proof of intended departure (a print-out of your flight booking confirmation)
Pro Tip: Hana KEB Bank has an account called the easyOne which is perfectly set up for getting your pension refund. An easyOne account automatically transfers any money deposited into it back to your home bank. This automates the entire wire-transfer process — eliminating a lot of potential obstacles to getting your pension refund ASAP.
Where can I turn in my documents?
There are pension offices throughout South Korea; use this page to find the one closest to you! The info provided is very useful, including addresses, phone numbers, and directions. Bravo, NPS!
How long does it take?
It depends, but expect to get your money about 15 days after you leave the country. The final pension contribution from you and your employer needs to be processed before the pension refund can be issued, so a bit of patience is required. Be sure to include a valid phone number and email on your application form in case something goes awry with your refund. The NPS will contact you in the event of a problem.
There are several other options for getting your pension, including picking up you lump-sum refund at the airport when you leave or filing the paperwork by mail when you leave the country. But filing beforehand is by far the easiest, so that’s what I’ve covered here. Refer to the NPS website if you need to file one of the other ways.
Have you ever gotten a lump-sum refund after working in Korea? How was your experience? Do you have any tips to share? Let us know in the comments below!
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Thank you for posting this Nathan. I left Korea August 19 but my last day of employment is August 21 (I used up leave creadits for the extra 2 days) and my employer pays every 10th of the month. Does this mean that I will receive the lump sum refund after the 10th of September?
Hey Alex! It’s hard to say for sure, but the last pension payment from your employer to the NPS needs to take place before you’ll receive your payout. Most likely, the payout process will start a little after the 10th, and you’ll probably have to wait a few business days for the wire transfer. Don’t panic if it takes a week or two, it’s a government program! Hope that helps…
Thanks Nathan!
How about the tax from Korea. I haven’t seen anyone address this yet. How much is the lump sum taxed before it’s sent to you. I know they take a cut but forgot what the percentage was.
I think it’s usually around 4% (if it’s taxed at the same rate your income is), but I’m not sure if that’s correct. You could try checking the NPS website to find that info:
http://english.nps.or.kr/jsppage/english/scheme/scheme_04.jsp
Hi Nathan: Thank you for this post. I collected my “lump sum” last summer and returned to the US permanently. Do you know whether this lump sum payment should be included in my income tax filing for 2017? If so, this pension from the Korean gov’t also considered a taxable income as far as the IRS is concerned? Just asking if you had any experience in this regard.
Thank you.
I usually include it as additional income when I’m filing my taxes. It all goes under foreign earned income, so we don’t have to pay taxes on it. Better safe than sorry!
That said, please don’t consider that tax advice. No way in hell I’m qualified for that ?
Nathan you are a dude I had them dump it in my normal Korean account they said that’s cool… still waiting on it . It has been about 14 days is that normal??? Much love brother hope u are well… great article
Yeah man, it takes a few weeks 🙂 I just checked the NPS homepage and found this:
“Pension contributions are collected on the 10th of the month, so if your pay date is after that date, the final collection will be on the 10th of the following month, which means that you may not receive your refund until 2-3 weeks later. (see more in the personal experience below).”
Are you back in Italy now?
Wow this sounds amazing! Thanks for the tip 🙂
No worries! 🙂