Hire in South Korea

South Korea

PEO &

Employer of Record

Hire employees remotely in South Korea without a local entity. We handle HR compliance, payroll & taxes so you can focus on your business.

Business Language

Korean

Salary Currency

Korean Won (KRW)

Capital city

Seoul

Time zone

UTC +8

EOR in South Korea

Hire Employees in South Korea

NNRoad provides payroll & employer of record (EOR) services in South Korea to ensure that your business complies with local labor laws and regulations. We process monthly payroll and act as the Employer of Record, taking on all local employer liabilities.

Fast Hiring

Start working with your remote employees in a week.

Foreigner Visas

NNRoad assists with overseas foreign hires visa needs.

Platform

Access your payroll reports on our portal.

Employer of Record (EOR) in South Korea

Employer of Record (EOR) services are for companies who do not have a legal entity in South Korea, but who want to hire localy. Employment and full liability are outsourced to NNRoad.

1. Candidate Selection

Select the candidates you want to hire in South Korea.

2. Employee Onboarding

We sign a local labor contract with your employees based in South Korea.

3. Compliance & Payroll

We manage monthly payroll, mandatory benefits & all HR compliance in South Korea.

EOR service includes:

Hiring and termination of employees/local labor contracts (contract administration – engagement, extension termination and conversion to permanent hire).

All mandatory employer (and employee) contributions filed and paid for your EOR employees.

Payroll recording, reporting and administration.

Distribution of salaries to employees through direct deposit into their bank accounts.

Calculation, reporting, filing and processing of EOR employee’s individual income tax due.

Collecting and processing your employee’s invoices for business related expenses.

Guiding and organizing your expat employee’s work visa application too guarantee their successful onboarding.

Standalone Payroll in South Korea

Payroll services are for companies who have a legal entity in South Korea, and want to outsource their salary disbursement, mandatory benefits, income tax filing and mandatory reports.
PEO in South Korea

Employer of Record Status in South Korea

Using an Employer of Record (EOR) to hire employees in South Korea is a legally recognized and practical solution for companies wishing to expand without establishing a local entity. An EOR acts as the legal employer, handling payroll, taxes, benefits, and ensuring compliance with South Korea’s employment laws, such as those stipulated by the Labor Standards Act. This setup simplifies the process of hiring both local and remote employees, ensuring adherence to statutory requirements like social security contributions and overtime pay regulations.

Hiring an Expat with an EOR in South Korea

For hiring foreign expats, an EOR manages the necessary work visas and permits, ensuring compliance with immigration laws. This includes handling applications for visas such as the E-7 Special Activity Visa, which is commonly required for foreign professionals. The EOR ensures that all immigration regulations are met, allowing companies to legally and efficiently onboard international talent​.

Employee Income Taxes:

Individual income tax rates in South Korea are based on progressive tax brackets.

Individual income taxes in South Korea are imposed on residents who earn income both inside and outside the country. Korea’s tax rates range from 6% to 45% depending on the amount of income earned. There are various deductions and tax credits available to reduce the taxable income, such as for medical expenses, education expenses, and charitable donations.

The tax year in South Korea runs from January 1st to December 31st, and taxpayers must file their tax returns by May 31st of the following year. Failure to comply with tax regulations may result in penalties and fines, and tax evasion is a criminal offense punishable by imprisonment or fines.

Tax Brackets:

Sample Calculation

6%: 0 – 12 million KRW
15%: 12 million – 46 million KRW
24%: 46 million – 88 million KRW
35%: 88 million – 150 million KRW
38%: 150 million – 300 million KRW
40%: 300 million – 500 million KRW
42%: 500 million – 1 billion KRW
45%: > 1 billion KRW
Yearly income = 150 million KRW
35% * 62 million = 21.17 million
24% * 42 million = 10.08 million
15% * 34 million = 5.1 million
6% * 12 million = 0.72 million
21.17+10.08+5.1+0.72 = 37.07 million

Yearly income tax = 37.07 million KRW

Employer costs in South Korea can vary depending on several factors, including the size of the company, industry, and the employee’s position. Employers in South Korea are required to contribute to several mandatory benefits, such as the National Pension Scheme, Employment Insurance, and Industrial Accident Compensation Insurance. The employer’s contribution to these programs is based on a percentage of the employee’s salary, with the employee also required to contribute a portion.

In addition to mandatory benefits, employers may offer additional benefits, such as health insurance, retirement plans, and bonuses. These additional benefits can be used as a way to attract and retain employees in a highly competitive job market. Employers must also comply with labor laws, including minimum wage regulations and rules on working hours and overtime pay. Understanding and complying with these requirements can be complex and time-consuming, which is why many companies choose to work with a Global PEO service provider to manage their employer costs and compliance in South Korea.

Employer Contribution

4.50%: National Pension
1.05%-1.65%: Employment Insurance
0.73%-18.63%: Worker Accident Compensation Insurance
3.68%: National Health Insurance

Employee Contribution

4.50%: National Pension
0.8%: Employment Insurance
3.68%: National Health Insurance

Korea has five mandatory social security systems and insurances. These are the national pension, healthcare insurance, unemployment insurance, industrial accident compensation, and long-term care for senior citizens. Benefits and insurance in South Korea are an important aspect of employee compensation and can help companies attract and retain top talent. The benefits provided by the South Korean government covers minimum necessities and employers usually offer benefits such as pension and healthcare as incentives to attract talents.

Pension Fund

The National Pension Service (NPS) serves as a mandatory public pension scheme designed to provide income security and financial support to the elderly population in South Korea. It is one of the largest pension funds in the world, both in terms of assets under management and the number of participants.

The NPS operates on a pay-as-you-go basis, where current workers contribute a portion of their monthly salary to the pension fund, and these funds are then used to pay the benefits of current retirees. The pension system is structured to ensure intergenerational fairness, with the aim of guaranteeing a stable income for retirees while distributing the financial burden across the working population.

Healthcare Insurance

The National Health Insurance (NHI) system in South Korea provides affordable and comprehensive healthcare coverage to all residents, including foreign workers. Employers are required to contribute to the NHI program, with the amount based on the employee’s salary. Additionally, employers may offer supplementary health insurance or dental insurance to provide additional coverage.

Extra Benefits

In addition to mandatory benefits, employers may offer additional benefits, such as paid time off, bonuses, and flexible work arrangements. Offering comprehensive benefits and insurance packages can be a complex process in South Korea due to the language and cultural barriers. Working with a Global PEO service provider can help companies navigate these challenges and ensure compliance with local regulations.

PEO Employer of Record in South Korea

Working hours in South Korea are regulated by the Labor Standards Act, which sets the maximum weekly working hours at 52 hours, including up to 12 hours of overtime. The law also mandates that employees must have at least one day off per week and at least 15 days of paid annual leave. However, some industries, such as manufacturing, may have different regulations, and employers may ask employees to work longer hours during busy periods.

Working Hours Per Week

In recent years, the South Korean government has been taking steps to reduce the country’s notoriously long working hours to improve work-life balance and productivity. For example, the “52-hour workweek” was introduced in 2018, which limits weekly working hours to 52 hours, and employers who violate the regulations can face fines. Employers must also provide additional pay for overtime work, and employees who work more than eight hours a day are entitled to a 50% wage increase for the additional hours worked.

Termination laws in South Korea are designed to protect employees from unfair dismissal and discrimination. The Labor Standards Act outlines the legal requirements for termination, including providing advance notice to employees and justifiable reasons for dismissal. Employers must provide written notice of termination to employees, and the notice period varies based on the length of employment, with a minimum of 30 days for employees with more than three months of service.

Employers may only terminate employees for justifiable reasons, such as poor performance, violation of company policies, or downsizing. Discrimination based on factors such as age, gender, race, or nationality is prohibited, and employers must provide severance pay to employees who are terminated due to company restructuring or downsizing. Failure to comply with termination laws can result in penalties and legal action. Working with a Global PEO service provider can help companies navigate termination laws in South Korea and ensure compliance with local regulations.

Severance

Severance pay in Korea is mandatory even if the employee resigns on his own will. Terminated employees are entitled to 30 days severance pay.

Notice Period

Employers must give a 30 days notice before termination of an employee’s contract.

Employment Contract

Employment contracts in South Korea should be written in Korean and spell out the job title, duties, salary, benefits, working hours, and the length of the contract. The contract must be written in Korean and should be signed by both the employer and employee.

In South Korea, employment contracts can be either fixed-term or indefinite-term. Fixed-term contracts are typically used for project-based or seasonal work and are limited to two years, while indefinite-term contracts are used for permanent employees. Employers must provide notice to employees before terminating their contracts and provide justifiable reasons for dismissal.

The Labor Standards Act sets out the minimum requirements for employment contracts, and employers must comply with local regulations. Working with a Global PEO service provider can help companies ensure compliance with local regulations and provide support throughout the employment contract process.

Probation Period

Probation periods in South Korea are generally between 1 and 3 months.

South Korea has several types of leave entitlements for employees, including annual leave, sick leave, and maternity/paternity leave. All employees are entitled to at least 15 days of paid annual leave per year, with additional days granted based on seniority. Sick leave is provided for employees who are unable to work due to illness or injury, with up to 90 days of paid leave per year provided by the employer.

Maternity leave is available for female employees who are pregnant, with up to 90 days of leave provided by law, with the possibility of additional unpaid leave. Paternity leave is also available for male employees, with up to 10 days of paid leave provided by the employer. Employees may also be entitled to other types of leave, such as bereavement leave, family care leave, and special leave.

Annual Leave

Employees employed for 1 year are entitled to 11 days paid leave per year.

Employees employed for 2-3 years are entitled to 15 days paid leave per year.

Employees employed for more than 3 years are entitled to 15 days paid leave plus 1 day for every additional 2 years of employment. Capped at 25 days paid leave.

Sick Leave

Sick leave in South Korea is decided by the employer, but most employers offer sick days.

Maternity Leave

Female employees are entitled to 90 days of paid maternal leave and 120 days of paid maternity leave in case of multiple births. The employer pays for the first 60 (75 in case of multiple births) days. The Employment Insurance Fund covers the remaining days.

Paternity Leave

New fathers in Korea are entitled to 10 days of paid paternity leave.

Public holidays in South Korea are regulated by the Labor Standards Act and the Act on the National Holidays. There are 16 national holidays in South Korea, including New Year’s Day, Lunar New Year’s Day, Independence Movement Day, Buddha’s Birthday, Labor Day, Memorial Day, Children’s Day, Buddha’s Enlightenment Day, Memorial Day for the Korean War, Liberation Day, Chuseok (Korean Thanksgiving), and Christmas Day.

Employers are required to provide employees with a day off on these holidays, and if employees are required to work, they must receive additional compensation, such as extra pay or a day off in lieu. In addition to national holidays, there are regional holidays that vary by province and city. Understanding and complying with public holiday regulations is important for employers to maintain compliance and support employee well-being.

Public Holidays

  • New Year’s Day
  • Seotdal Geumeum
  • Korean New Year
  • Independence Movement Day
  • Children’s Day
  • Buddha’s Birthday
  • Memorial Day
  • National Liberation Day of Korea
  • Chuseok
  • National Foundation Day
  • Hangul Day
  • Christmas Day
  • benefits in South Korea

    Resources

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