Teaching English in Korea 2026: What an E-2 Contract Is Really Worth — EPIK vs Hagwon Pay, Housing, Severance, Pension Refund, Tax Treaty — Package Calculator

An English-teaching contract in Korea is the only common job here where the salary number is the smallest part of the story. ₩2.3M a month sounds like a graduate wage from 2010 — because it is. But a free apartment, a flight each way, a month's severance, and for some nationalities a pension refund of nearly two months' pay per year add up to a package that is worth 40–60% more than the headline. This part prices an E-2 year properly, so you can compare an EPIK posting in Jeolla with a Gangnam hagwon, or with a job at home.

The two markets

EPIK and the provincial programmes (public schools) pay on a published scale — ₩2.2M for a bachelor's with no experience up to ₩2.8M for a master's or TESOL with years of experience in 2026 — plus furnished housing, ₩300,000 settlement allowance, flights, 18–26 days of paid vacation, severance, and a renewal bonus. Hours are 22 teaching hours a week within an 8:30–4:30 day, and the contract is with an education office, which pays on time. Rural postings add a ₩100,000–150,000 allowance. The programme is shrinking: Seoul's own native-teacher programme has cut to roughly 400 positions, Gyeonggi has ended most primary-school hiring, and EPIK's intake in 2026 is a fraction of its 2010s peak.

Hagwons (private academies) pay ₩2.3–2.5M for the same qualifications, sometimes ₩2.6–3.0M at large chains or for experienced teachers, with housing provided or a ₩400,000–500,000 allowance, flights, severance and 10 days of vacation. Hours run into the evening (typically 1–9 pm, 25–30 teaching hours) and the employer is a small business, which is where most pay disputes originate. The market is stable in Seoul and Gyeonggi and thinning elsewhere.

Universities pay ₩2.5–3.5M for 9–15 teaching hours and give four months of vacation; they require a master's and usually two years of experience, and hire on E-1 rather than E-2.

Pricing the package

Four things turn a ₩2.4M salary into something closer to ₩3.5M a month:

1. Housing. A rent-free studio in Seoul is worth ₩600,000–900,000 a month; in a provincial city ₩400,000–500,000. If a hagwon offers an allowance instead, compare it to the real rent and remember the allowance is taxable salary while provided housing is not.
2. Severance: one month's pay after 12 months, ₩2.4M on the example salary, essentially untaxed at that size (Part 5). Contracts that end at 11.5 months, or "include" severance in the salary, are trying to avoid it; both are illegal.
3. Pension refund for Americans, Canadians and Australians: 9.5% of salary for every month, plus interest — ₩2.7M on a year at ₩2.4M — paid after you leave (Part 4). British, Irish and New Zealand teachers pay the same 4.75% and get nothing back but a totalised record; South Africans are not enrolled.
4. Flights and settlement allowance: ₩2.5–3M for return airfare and the ₩300,000 EPIK settlement payment, usually reimbursed rather than paid in advance.

Against these, deductions at a ₩2.4M salary are about ₩114,000 pension, ₩97,600 health and care, and ₩30,000–50,000 income tax — under 11% — leaving ₩2.1–2.15M in hand. Note the 19% flat rate (Part 2) is irrelevant at these salaries; do not sign the election form if a hagwon offers it "for simplicity".

The tax-treaty exemption

The US–Korea treaty (Article 20) and several others (the UK, Ireland, Australia, New Zealand and Canada each have a version) exempt from Korean tax, for up to two years, the pay of a teacher or researcher invited by a university, college, school or other recognised educational institution. Public-school teachers under EPIK and university lecturers routinely claim it: you obtain a certificate of residence from your home tax authority (IRS Form 6166 for Americans), your employer files it, and no tax is withheld for two years. Two catches: hagwons are not recognised educational institutions, so hagwon teachers cannot claim; and the income remains taxable at home (Americans still file a US return and use the foreign earned income exclusion). The exemption covers only the first two years from arrival; from the third year normal Korean withholding applies.

What to check before signing

• Hours and what counts as an hour (teaching vs office), and the split of your salary between base and overtime.
• The housing clause: provided, or allowance, and who pays the key deposit (보증금).
• Severance stated separately, and a 12-month term.
• The four insurances listed with the employer's share (some hagwons skip employment insurance, which is legal, and health insurance, which is not).
• Whether the school has a history of unpaid wages — the Ministry of Employment and Labor publishes a name-and-shame list of habitual wage offenders, and teacher forums track hagwons.

The last part of the course is the exit: the eight things to do in your final month in Korea so that the severance, the pension refund, the tax refund and your deposit all actually arrive.