South Korea
Introduction
General overview & country facts, as well as labour regulations.
Employer Contributions
These are additional costs incurred by employers over and above the employee’s monthly gross salary and/or bonus.
Employee Contributions
These are costs incurred by employees that reduce their monthly gross salary and/or bonus to determine their net “take home” pay.
Employment Terms
All you need to know about salary & bonuses, working hours & overtime, probation period, notice period & severance pay, as well as all leave types.
COUNTRY PLAYBOOK
South Korea
Everything you need to know about payroll, benefits & hiring top talent in South Korea
Currency
South Korea won (KRW)
Salary payment frequency
Monthly
Capital
Seoul
Time Zone
GMT +9:00
Official Languages
Korean
Is English spoken?
No
Quick Links
Introduction
General Overview & Economic Facts
- South Korea, informally Korea and officially the Republic of Korea, is a country in East Asia
- South Korea is a centralized democratic republic with three primary branches of government namely executive, legislative, and judicial
- South Korea is a developed country with the world’s 10th largest economy by nominal GDP and is the most industrialized member of the OECD. South Korea further ranks 7th on the Human Development Index (HDI) and has one of the longest life expectancies in the world
Why Employ In South Korea?
- South Koreas largest industries include electronics, automobiles, telecommunication, shipbuilding, chemicals, and steel. The country is among the largest manufacturer of electronic goods as well as semiconductors
- South Korea makes significant investments into education. This has resulted in a highly skilled and educated country achieving one of the highest percentages of citizens holding a tertiary education degree
- 10.75% of the population is between the ages of 15 and 24 years, with 44.83% of the population being between the ages of 25 and 54. South Korea has a more mature population resulting in a more experienced population
Overview of the Labour Law
- The main source of employment law is Labour Standards Act (LSA) which governs the most fundamental and important matters in employment law. An employer must strictly abide by the LSA and failure to do so can lead to criminal liability or charges
- The right to freedom of association is protected under South Korea constitution and this right is generally respected
Fun Country Facts
- Koreans are one year older when born. Koreans consider themselves a year old from the moment they come out of the womb
- South Korea has the biggest drinking culture in Asia
- Men wearing make up is normal in South Korea
Why Use Playroll Services For South Korea?
- Employing in South Korea requires companies to have their own legal entity in the country as well as managing payroll, employee benefits, taxes and legal compliance
- This can get quite complicated, especially with the complexity of employment laws in South Korea. With Playroll’s Employer of Record services, your team will be employed by our established legal entities in each country
- We will take care of payroll, employee benefits, taxes, legal compliance and provide ongoing employee support, so that you can focus on growing a thriving team
Employer Contributions
These are additional costs incurred by employers over and above the employee’s monthly gross salary and/or bonus.
Employment Insurance (EI)
Calculated on standard monthly income
Employment Insurance (EI)
0.80%
Additional insurance premium – less than 150 employees
0.25%
Additional insurance premium – business eligible for support
0.45%
Additional insurance premium – between 150 and 1,000 employees
0.65%
Additional insurance premium – 1,000 employees or more
0.85%
National Pension Service (NPS)
Calculated on a maximum standard monthly income KRW 5,240,000
4.50%
National Health Insurance (NHI)
Calculated on a maximum standard monthly income KRW 7,047,900
3.43%
Worker’s Accident Compensation Insurance (WCI)
Calculated on standard monthly income
Low risk
0.70%
High risk
18.6%
Long-Term Care Insurance (LTCI)
Calculated on NHI
11.52%
Employee Contributions
These are costs incurred by employees that reduce their monthly gross salary and/or bonus to determine their net “take home” pay.
Employment Insurance (EI)
Calculated on standard monthly income
0.80%
National Pension Service (NPS)
Calculated on a maximum standard monthly income KRW 5,240,000
4.50%
National Health Insurance (NHI)
Calculated on a maximum standard monthly income KRW 7,047,900
3.43%
Long-Term Care Insurance (LTCI)
Calculated on NHI
11.52%
Personal Income Tax
Income Tax is ‘Pay As You Earn’
Income bracket per annum
0 – 12,000,000
6.00%
12,000,000.00 – 46,000,000.00
15.00% plus KRW 720,000.00
46,000,000.00 – 88,000,000.00
24.00% plus KRW 5,820,000.00
88,000,000.00 – 150,000,000.00
35.00% plus KRW 15,900,000.00
150,000,000.00 – 300,000,000.00
38.00% plus KRW 37,600,000.00
300,000,000.00 – 500,000,000.00
40.00% plus KRW 94,600,000
500,000,000.00 – 1,000,000,000.00
42.00% plus KRW 174,600,000.00
1,000,000,000.00 and above
45.00% plus KRW 384,600,000.00
Employment Terms
General
Minimum Wage
- KRW 9,160 per hour
Working Hours
- Maximum of 40 hours per week.
- Minimum 60-minute meal interval if working for 8 hours
- Typical working hours are 09h00 to 18h00 Monday to Friday
Overtime
- Maximum of 12 hours per week
Notice Period
- An employer must give 30 days’ advance notice of termination, or 30 days’ pay in lieu of notice
Severance Pay
- 30 days’ average ordinary wages for each year of continuous employment
- Average ordinary wages are based on wages paid in the three months immediately preceding termination
Probation Period
- There is no statutory probation period
- It is common for employees to have a 3-month probation period
Bonus
- There is no statutory bonus in South Korea
Public Holidays
Public holidays 2022
- January 1st – New Year’s Day
- February 1st to February 3rd – Seollal
- May 1st – March 1st Movement Day
- May 5th – Children’s Day
- May 8th – Buddha’s Birthday
- June 6th – Memorial Day
- August 15th – Liberation Day
- September 9th – September 11th Chuseok
- October 3rd – National Foundation Day
- October 9th – Hangeul Day
- December 25th – Christmas Day
Leave
Paid Leave / Vacation Days
- Paid leave
- Paid by the employer
- 15 days per year, after 1 year of employment
- Employees who have worked for 3 or more years are entitled to an addtional 1 day of leave up to a maximum of 25 days
Sick Leave
- There is no statutory obligation for employers to provide sick leave
- It is common to provide paid sick leave regardless of whether an injury or illness is work related
Maternity Leave
- Paid leave
- Paid by employer and Social Security
- Employee maternity leave is 90 days
- The first 60 days of maternity leave must be paid by employer, the remaining 30 days are partly paid by the employer and by social security
Paternity Leave
- Paid leave
- Paid by employer
- Minimum of 10 days per year
Parental Leave
- Partially paid leave by the employee
- Maximum of 1 year leave
Start hiring in South Korea today!