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Compliantly hire and expand your business in South Korea
When it comes to employing and managing employees in South Korea, there are specific procedures and regulations that must be followed.
South Korea is a country in East Asia. It constitutes the southern part of the Korean Peninsula and borders North Korea along the Korean Demilitarized Zone. The country’s western border is formed by the Yellow Sea, while its eastern border is defined by the Sea of Japan. It has a population of 51.96 million, of which roughly half live in the Seoul Capital Area, the ninth most populous metropolitan area in the world.
Seoul
Capital
$33,147
GDP per Capita
$1.709 trillion
Total GDP
51,966,948
Total Population
0.925
Human Development Index
UTC +9
Time Zone
Korean (Pyojuneo)
Official Language
Korean Republic Won (KRW)
Currency
100,410 km2 (38,770 mi2)
Land Area
Here's what you need to know
When it comes to employing workers in South Korea, adhering to specific regulations and procedures is essential. However, teaming up with a local expert in employment and payroll can simplify the process and ensure that you’re meeting all the necessary legal requirements while fostering a supportive work environment for your employees.
Employment contracts are not mandatory in South Korea, but highly recommended. They should clearly outline:
Job title, duties, and responsibilities
Salary and benefits
Working hours and overtime pay (overtime pay is mandatory for exceeding 40 hours per week)
Leave entitlements (annual leave, sick leave, etc.)
Termination terms (notice period, severance pay)
Confidentiality clauses (if applicable)
Minimum Wage
South Korea has a national minimum wage, currently set at ₩9,860 (Korean Won) per hour (effective January 1st, 2024). This translates to approximately ₩2,060,740 per month for a standard workweek.
Payroll Terms
Salaries are typically paid monthly on the last working day of the month. Payslips with details of gross pay, deductions, and net pay are mandatory.
Taxes
There is no payroll tax withheld at source in South Korea. Employers are responsible for social security contributions on behalf of employees.
Employee Social Security Contribution:
Varies depending on income (capped amount)
Employer Social Security Contribution:
Varies depending on industry and number of employees
Income Tax
Employees are responsible for filing their own annual income tax return directly with the National Tax Service (NTS).
South Korea has a standardized leave policy mandated by the Labor Standards Act:
Annual Leave
Minimum of 15 days per year, increasing with service duration (up to 35 days). Employees must use their annual leave within the year or it expires.
Public Holidays
Around 10-12 paid public holidays per year.
Sick Leave
No statutory sick leave entitlement, but employers may offer paid sick leave as a benefit.
Maternity Leave
Up to 90 days of paid leave for female employees, followed by an optional 1 year of unpaid leave.
Paternity Leave
Up to 1-month paid leave for male employees.
Probationary Period
There's no mandatory probationary period in South Korea. However, employment contracts often include one, typically lasting between 1 and 3 months. During this time, termination can be easier for both employer and employee.
Termination of Employment
Termination of employment should follow the terms outlined in the contract or the Labor Standards Act. Notice periods vary depending on the reason for termination and the employee's length of service. Severance pay may also be required under certain circumstances, typically one month's salary for each year of service.
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