Overseas EFL: the hidden compensation gap

A first-year ALT on the JET Programme is paid ¥4,020,000 in 2026. A first-year EPIK teacher at Level 2 in Busan is paid ₩26.4 million. A new AEON instructor in Japan is paid ¥3.24 million. A new hagwon teacher in a tier-2 Korean city is paid ₩28.8 million. Converted to USD at mid-2026 FX, the stated annual base salaries are $26,800 (JET), $21,600 (AEON), $21,176 (hagwon), $19,412 (EPIK) — a $7,400 spread between top and bottom, with JET clearly highest and EPIK clearly lowest.

That ranking is wrong. Once you count what each contract actually delivers — subsidized or provided housing, round-trip airfare, statutory severance, settlement allowances — the all-in package reranks. JET stays at the top. AEON drops to last. The Korean programs both move up. The four segments that look like a four-figure spread on base salary are a $7,500 spread on the all-in package, but in a different order.

This issue prices that gap. The headline finding is mechanism, not magnitude: Korean labor structures bake non-cash compensation into overseas EFL contracts at roughly 2× the Japanese rate. EPIK and hagwons both clear gaps of 35–40% between stated base and all-in package. JET clears 18%. AEON clears 11%.

The brief's scope is the two anchor markets for international English teaching. Each market has a government program and a private-sector equivalent.

The base-salary spread across these four is roughly $7,400 — modest. The all-in spread is also roughly $7,500 — but it puts the segments in a different order.

For each segment, the all-in calculation adds four components on top of the stated base:

JET: base $26,800 + housing $3,200 + airfare $1,500 = $31,500 all-in (+18%). Housing is highly variable — some Contracting Organizations provide subsidized accommodation, others provide rent stipends, others leave participants to arrange. The conservative figure used here is ¥40,000/month in rent savings (~$3,200/year), which fits a small-city placement. A Tokyo or Yokohama placement would push the imputed housing meaningfully higher.

Hagwon: base $21,176 + housing $5,294 + airfare $1,500 + severance $1,765 = $29,735 all-in (+40%). Housing is the largest single component. The Korean Labor Standards Act mandates one month's base salary as severance on completion of a 12-month contract, which adds $1,765 the JET contract structurally lacks.

EPIK: base $19,412 + housing $3,529 + airfare $1,500 + severance $1,618 + settlement $221 = $26,279 all-in (+35%). Same statutory severance as a hagwon, plus a ₩300,000 settlement allowance on arrival. Housing imputed at the typical employer-provided allowance equivalent.

AEON: base $21,600 + housing $2,400 = $24,000 all-in (+11%). No airfare. No structured severance. AEON's subsidized-housing program caps the employee's rent contribution at ¥55,000/month for an AEON-arranged apartment, which represents a real saving — but the only non-cash benefit AEON systematically provides.

The spread on stated base is $7,400. The spread on all-in package is $7,500. The order changes because non-cash components scale differently across the four segments — and the segment with the highest stated salary (JET) is not the segment with the largest gap (hagwon).

The Korean structural gap averages 38% across EPIK and hagwon. The Japanese gap averages 14% across JET and AEON. The mechanism is regulatory and contractual, not cultural.

Severance. The Korean Labor Standards Act requires employers to pay one month's base salary as severance on completion of a contract of one year or more. This is statutory: a hagwon and a regional Office of Education both owe it regardless of employer preference. Japanese employment law has no equivalent requirement for foreign English teachers, and neither JET contracts nor AEON contracts include severance.

Housing. Both Korean programs systematically provide housing or a housing allowance as a standard contract term. EPIK contracts have housing as a checkbox term; hagwon contracts almost always include a free apartment in the offer. On the Japanese side, AEON provides subsidized housing — teachers pay up to ¥55,000/month against market rent — but it's a benefit, not a standard term. JET's housing varies by Contracting Organization with no platform-wide guarantee.

Airfare. Round-trip airfare is standard in both Korean programs and the JET Programme. AEON does not provide it.

These three components — severance, housing, airfare — explain most of the country gap. EPIK and hagwon both get all three. JET gets two of three (no severance). AEON gets one of three, and the one it gets is the smallest in dollar terms.

The pattern is not that Korean salaries are higher. Stated EPIK pay (₩2.2M/month) is below stated JET pay (¥335K/month) at mid-2026 FX. The pattern is that Korean contracts price the package as the package. Japanese contracts price the package as the salary.

Issue 1 documented that an established Preply TOEFL tutor clears a $22/hour median. At 25 hours/week × 50 weeks = $27,500 gross. Minus Preply's 18% floor commission tier (reached after roughly 400 total platform hours, ~10 months at 10 hours/week per Issue 1's commission analysis), net is $22,550. That figure is the marketplace anchor for the comparison below.

Three of the four overseas segments beat the Preply net by a wide margin:

The marketplace figure also excludes two structural costs. First, Preply's 100% trial-lesson tax on every new student — Preply keeps the entire trial fee indefinitely per student, which slows book-building and forces ongoing new-student acquisition. Second, a Preply tutor is self-employed: no employer-side pension contribution, no subsidized healthcare, no housing benefit, no airfare reimbursement, no severance. The overseas packages bake all of those in.

The reader-useful framing: an EFL teacher choosing between a tenured Preply book at 25 hours/week and any of JET, EPIK, or a typical hagwon is choosing between roughly equivalent cash, but the overseas options include structural benefits the marketplace does not. AEON is the only segment that prices roughly at marketplace parity, and AEON delivers stability and visa sponsorship the marketplace does not.

If you're considering JET. Year-1 stated salary is the highest of the four. Year-1 all-in is also the highest. The variance in JET's package comes almost entirely from Contracting Organization housing terms — a Tokyo placement with provided accommodation has a materially higher all-in than the figure above; a rural placement with rent stipend may be lower. Renewal years compound: Year 2 is ¥4,140,000; Year 4-5 is ¥4,320,000, plus accumulated tenure benefits.

If you're considering EPIK. Level 3 is no longer being hired — TEFL certification is effectively required to qualify for at least Level 2. Pay is set by each regional Office of Education, not centrally, and ranges from ₩2.05M/month at the lowest published tier (Level 3, Gyeonggi) to ₩2.8M/month at the highest standard tier (Level 1+, Gyeongbuk and similar). Seoul SMOE pays higher than the EPIK table above. The package's non-cash uplift is structural and consistent across regions.

If you're considering AEON or other eikaiwa. The cash is roughly hagwon-equivalent on the stated salary line. The package is materially behind — no airfare, no severance, smaller housing subsidy. The premium AEON commands over a marketplace baseline is small. If lifestyle factors (city placement, schedule, urban Japan) are why you're considering eikaiwa, that's a defensible choice; if compensation is the reason, the math is closer than the stated salary suggests.

If you're considering a hagwon. The 40% package gap is the largest of any segment we priced. Stated salary is mid-pack at $21,176. All-in is second-highest at $29,735. The wide market distribution means individual offers vary materially — Seoul hagwons often pay higher cash but include less housing, tier-2 hagwons often pay lower cash but include better housing. The package math depends on which trade-off a specific offer makes.

These are descriptions of contract structure, not coaching prescriptions. The teacher's actual decision depends on country preference, visa status, contract risk tolerance (government program vs. private employer), and intended duration.

FX assumptions. All USD conversions use mid-2026 spot rates: USD/JPY 150, USD/KRW 1,360. Both rates fluctuate; the relative-segment findings are robust to plausible FX moves of ±5%, the absolute USD numbers are not.

Year-1 only. All figures are first-year packages. Renewal years differ: JET's tenure schedule increases the base salary annually; EPIK and hagwon offer entrance bonuses for renewing teachers; AEON reviews salary annually. A multi-year comparison would close some of the Year-1 gaps, particularly where Korean programs front-load airfare and settlement allowances that don't recur.

Housing imputation. Housing values are conservative imputed estimates of the rent the teacher captures by virtue of the contract benefit. The imputed values used: JET ¥40,000/month savings; EPIK ₩400,000/month allowance equivalent; AEON ¥30,000/month savings; hagwon ₩600,000/month market rent. Real values vary widely by placement city — Tokyo, Osaka, Seoul, and Busan would push housing imputation higher; smaller cities lower. The relative ordering of gaps holds across that variation; the absolute gap percentages do not.

Tax treatment is excluded. All figures are pre-tax (or "gross" in the employer's sense). JET participants pay Japanese national and resident income tax, plus mandatory social insurance contributions deducted from monthly remuneration. EPIK and hagwon teachers pay Korean income tax (capped by US-Korea tax treaty for US passport holders during the first two years). AEON instructors pay Japanese income tax. Effective net take-home varies by individual circumstances; the relative comparison holds in gross terms.

Marketplace anchor methodology. Preply $22/hour × 25 hours/week × 50 weeks × (1 - 18% floor commission) = $22,550 net. The 18% floor is reached at 400+ cumulative platform hours, which takes roughly 10 months at 10 hours/week per Issue 1's commission analysis. Below that tenure, the floor is higher (33% in the first 20 hours, sliding down). The anchor also excludes the 100% trial-lesson tax on every new student. A tutor who churns students frequently has materially lower net than the anchor figure.

AEON salary source. AEON's official salary disclosure page is JavaScript-rendered; the ¥270,000 monthly figure used here is from secondary aggregate tracking across multiple TEFL coverage sources and is the consensus rate for AEON entry-level instructors in 2026. Will reverify against AEON's official source before any follow-on issue references this figure.

Hagwon is an aggregate, not a single employer. Unlike JET, EPIK, and AEON, "hagwon" denotes a category of employer, not a specific institution. The $21,176 base salary and ₩600,000/month housing figure are tier-2 city baselines. Seoul hagwons cluster higher on cash and lower on housing; rural hagwons cluster lower on cash and higher on housing. The all-in calculation is the entry-level reference point, not the universe.

Single-point measurement. This issue prices what each contract structure pays in 2026. We cannot make trend claims ("packages are rising," "JET pay falling behind inflation") without multiple measurements over time.

What we did not measure. International school positions (typically $40–80K base plus housing and tuition benefits, materially higher than any segment here); university lectorships (selective, smaller pool, different requirements); private tutoring off-platform; corporate language training contracts inside Japan and Korea. These are larger compensation tiers than the four segments above. Issue 5 will measure the corporate training layer specifically.

Issue 5 (June 11): The corporate training layer that doesn't appear on the marketplaces. Berlitz, EF Corporate, GoFluent, Voxy. Public pricing pages, sales-deck pricing leaks, LinkedIn job postings for in-house corporate language trainers. The other 80–90% of Business English demand Issue 3 could not directly measure.

Issue 6 (June 18): International schools as the high-end of the overseas EFL labor market. Year-round salary, housing, airfare, tuition for dependents, and how the requirements differ from the JET/EPIK floor.

Data: Stated salary figures captured 2026-06-02 from jetprogramusa.org (JET); m.epik.go.kr (EPIK); secondary AEON tracking pending direct verification; aggregated 2026 hagwon market data. Non-cash components per published contract terms (JET, EPIK) and labor law (Korean Labor Standards Act severance). USD conversions at mid-2026 spot rates ¥150 / ₩1,360 per USD. Marketplace anchor from Chalk Index Issue 1 (May 14 2026). Unified framework script available on request.