Seven Korean pay terms to know before you sign your hagwon contract

Your hagwon contract is written in English, mostly for your benefit. But underneath it sits Korean labor law, and that law uses its own vocabulary. When your director says "we follow 4대보험" or a payslip line reads "원천징수," you're supposed to already know what that means. Most new teachers don't, and nobody hands you a glossary on day one.

Here are the terms worth knowing, and what each one is worth right now.

A few of these deserve a second look.

The Guarantee of Workers' Retirement Benefits Act entitles any employee with one full year of continuous service to severance of 30 days' average wages per year served. That applies regardless of nationality, and foreigners have the same right to severance pay as Korean nationals. Severance normally has to reach you fairly fast: it must be paid within 14 days of your last working day, and delays beyond that accrue 20% annual interest.

The pension and health insurance numbers moved this year, which is why anything you read from 2025 is already out of date. The National Pension contribution rate increased from 9.0% to 9.5% on January 1, 2026, split equally between employer and employee at 4.75% each, up from 4.5% each. Health insurance moved too: the health insurance rate increased from 7.09% to 7.19%, while long-term care insurance premiums were adjusted upward as well.

You might also see 포괄임금제 (pogwal imgeumje), an "all-inclusive wage" structure, written into your contract. It folds a fixed overtime estimate into your flat monthly pay instead of billing it hour by hour. It's legal and common. Just know the term exists so it doesn't look like a mistake the first time you see it.

So the vocabulary matters less for what it lets you calculate yourself, and more for what it lets you ask about clearly. If a number on your payslip doesn't match a term on this list, that's a specific, answerable question, not a vague worry. Bring it to your placement coordinator with the term attached, and it gets answered a lot faster than "something looks off."

One honest gap: exact take-home pay depends on your base salary, your city's cost of living, and whether housing is provided or paid as an allowance, so nobody can hand you one universal number. What these terms give you is the ability to read your own contract instead of taking someone else's word for what it says.