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hire in South Korea

South Korea PEO &
Employer of Record

SALARY PAYMENT IN South Korean won (KRW, ₩)

CONTRACT LANGUAGES Korean / English

PAYROLL TAX 16.43% – 34.94%

PAYROLL CYCLE Monthly

TIME TO HIRE 24 hours

Hire and pay talents
with Horizons in
180+ countries

Simple, compliant hiring with Horizons PEO

Hire in South Korea

Horizons provides compliance solutions to ensure your business in South Korea operates in line with South Korea labor laws and tax regulations. Businesses benefit from hiring in, investing in, or job outsourcing to, South Korea in a range of industries, from customer service, to accounting services, to software development. We also process monthly payroll, and, as an South Korea Employer of Record, absorb all local employer liabilities. Partnering with our South Korea PEO is the quickest and most cost-effective way to enter the South Korea market. 

Facts & Stats

PEO Platform Hire in South Korea, and pay employees through our platform or app. PEO Cost Our South Korea PEO solution is the most affordable on the market. Time-to-hire Fast onboarding in South Korea, hire in as little as 24 hours.
Contracts We draft labor contracts compliant with South Korean labor law. Local Benefits We administer all mandatory benefits and contributions in South Korea. 180+ Countries It doesn’t stop with South Korea — we are an international PEO
stay compliant with South Korea labor laws

Employment Laws

South Korea employment contract types

In years gone by, South Korean employment contracts were indefinite. As such, employees would generally work for the one company until retirement. However, fixed-term, part-time, and temporary contracts are increasingly become standardized in South Korea. 

Fixed-term contracts are unable to exceed two years in length. For anything beyond two years, employees would need to be treated as if they have an indefinite contract. In South Korea, part-time employees are entitled to the same working rights as employees who perform the same job full-time – in proportion to the hours that are being worked. 

Best practice in South Korea is for employers to draft a clear, written employment contract. It should be drafted in the local language and include compensation, benefits, job responsibilities, and rules around termination. Letters of offer and employment contracts should state compensation figures in South Korean Won (KRW), as opposed to any foreign currency.

By partnering with our South Korea PEO, Horizons’ team of local experts can provide assistance for drafting strong employment contracts that are compliant with local regulations. 

Fixed-term
Probationary period

3 months (standard)

6 months (maximum)

Termination notice period30 days (standard)
SeveranceAfter 1 year of employment: 30 days per year of service

 

Indefinite
Probationary period

3 months (standard)

6 months (maximum)

Termination notice period30 days (standard)
SeveranceAfter 1 year of employment: 30 days per year of service

 

Working hours in South Korea

Whilst South Koreans are known for working long hours, employers must provide their employees with at least one day off per week. In most circumstances, Sunday is allocated as the paid weekly day off. However, many professional employees choose to work a half-day on Saturday.

Hire compliantly in South Korea without a local entity.

Quick, compliant hiring in 24 hours—no subsidiary required.

Holidays in South Korea

As well as vacation days, employees in South Korea are entitled to May 1st – Labor Day – as a paid public holiday. Whilst it is not compulsory for employers to treat other public holidays as a paid holiday, it is common practice that they do. Public holidays in South Korea include:

South Korea has a range of national public holidays that are celebrated annually. In 2023 these holidays are:
Date Holiday name
1 Jan Sunday New Year’s Day
21 Jan Saturday Seollal Holiday
22 Jan Sunday Seollal
23 Jan to 24 Jan Seollal Holiday
1 Mar Wednesday  Independence Movement Day
5 May Friday Children’s Day
27 May Saturday  Buddha’s Birthday
6 Jun Tuesday Memorial Day
15 Aug Tuesday Liberation Day
28 Sep Thursday Chuseok Holiday
29 Sep Friday Chuseok
30 Sep Saturday Chuseok Holiday
2 Oct Monday Day off for Chuseok Holiday
3 Oct Tuesday National Foundation Day
9 Oct Monday Hangeul Proclamation Day
25 Dec Monday Christmas Day

Income tax

In South Korea, residents are taxed on their income, regardless of whether income was earned at home or abroad. This differs from non-residents, who are only taxed on the income they received in South Korea. Tax is deducted at the source of income and individuals are required to file a tax return at the end of each year.

For expatriates in South Korea, a special tax regime applies. Their income is taxed at a total rate of 20.9%. This is comprised of 19% income tax and 1.9% local income tax. There are certain foreign nationals in South Korea that can choose between the flat rate at 20.9% – without any deductions or progressive rates between 6.6% and 44% after deductions.

For residents and citizens of South Korea, the income tax rate is as follows:

  • 0-12000000 KRW – 6%
  • 12-46000000 KRW – 15%
  • 46-88000000 KRW – 24%
  • 88-300000000 KRW – 35%
  • More than 300 million KRW – 38%

Health insurance

In South Korea, universal healthcare is distributed by the National Health Insurance (NHI).

Both employers and employees need to contribute towards National Health Insurance. Each party pays 50% of the contribution and the rate is determined by an employee’s salary. 

Vacation leave

Businesses with full-time, salaried employees are required by law to provide 15 day’s of paid annual to employees, once they reach one year’s company service. 

  • There is an additional paid vacation day for each two years’ service thereafter
  • By law, the statutory vacation days per year are capped at 25 days

Sick leave

In South Korea, it is not mandatory for employers to provide employees with leave for non-work related illnesses or injuries. However, many employers elect to provide at least some paid sick leave to employees – regardless of whether an injury or illness is work related.

Employees will most often use their annual leave as sick days, if paid sick leave is unavailable. 

Under the South Korean Labor Standards Act, employers must provide paid leave for work-related illnesses or injuries. 

Maternity and paternity leave

Female employees in South Korea are entitled to 90 day’s maternity leave. The start date for maternity leave is generally agreed upon between the employer and employee. It is compulsory that 45 consecutive day’s leave be taken after childbirth. 

Depending on the size of the business, either the employer or Employment Insurance pays for maternity leave. The amount that is paid to the employee will also depend on the size and scope of the business. 

Parental leave may be available to employees that have worked for a company more than one year. 

  • Parental leave applies to parents whose children are under six years old
  • Each parent is eligible for a maximum of one year’s leave
  • Parents are prohibited from taking leave at the same time
  • Parents are entitled to 40% of their monthly income from Employment Insurance

Termination and severance

Employers in South Korea are required to provide employees with at least 30 day’s notice prior to termination. Alternatively, employers can elect to pay an 30 day’s salary, in lieu of the notice period.

Individual employment contracts will often provide longer notice periods. In rare circumstances, an employee may be entitled to as much as 12 month’s notice. 

Full-time employees may be entitled to severance pay that is equal to one month’s salary, for each year of company service. This applies if an employee has at least one year’s company service and they have worked more than 15 hours per week, or more than 60 hours per month. Severance pay must be paid within two weeks of an employee’s termination.

Employees with more than six month’s service are able to make unfair dismissal claims if they meet either of the following criteria: 

  • The employee is covered by a modern award or enterprise agreement – regardless of how much they earn 
  • The employee is award or agreement free and they earn less than the relevant income threshold 

In most cases, when unfair dismissal is proven, an employee will be reinstated in their role. If this is not applicable, then up to six month’s compensation pay may be granted.

Navigating employee terminations and handling severance packages can be complicated for companies expanding overseas for the first time. Horizons’ South Korea PEO can mitigate risk for foreign companies and provide guidance through this process.  

hassle-free South Korea compensation & benefits

Compensation & Benefits

South Korea compensation laws

The minimum wage in South Korea is 8,350 won (KRW) per hour. Whilst South Korea is known for its long work hours, laws have recently been passed that have reduced the maximum hours in a work week to 52 – down from 68. Regular weekly work hours have also been reduced to 40. If an employee works overtime, it must be paid at a rate between 50% and 100% – on top of their regular wage. 

Minimum Wage Country Comparison Chart (Per month in USD)
Switzerland (Geneva) $4,000
Italy $2,255
Australia $1996
Algeria $156
Uzbekistan $22
Guaranteed benefits in South Korea

Employers in South Korea need to be aware of all guaranteed benefits that are legislated by law. These benefits will include time off for holidays and vacation days.

Employees in South Korea receive Labor Day (March 1st) off as a compulsory paid holiday. Aside from Labor Day, it is not mandatory for employers to provide paid days off for other public holidays. Despite this, many employers allow their staff to take these days off with pay. 

Full-time salaried employees are legally entitled to 15 days of paid vacation after one year’s company service. For every two years of service thereafter, employees are entitled to a subsequent day off. The maximum number of vacation days per year is capped at 25. 

Maternity and paternity leave is another guaranteed benefit in South Korea. Female employees receive 90 day’s maternity leave, with a start date that is agreed upon with their employer. Depending on the size of the business, either the employer or Employment Insurance will pay for maternity leave. For employees that have been with a company longer than a year, they may be entitled to parental leave – with strict conditions to be met. 

South Korea benefit management

For employers to implement an effective benefit management plan, supplemental benefits should also be considered. Employers in South Korea will frequently provide their employees with supplemental health and life insurance benefits.

When you partner with Horizons, our experts will advise you on the insurance costs that need to be budgeted in your business plan. We’ll also support you to distribute the right benefits to your employees in South Korea.

Benefits and compensation restrictions

In South Korea, collective bargaining agreements (CBAs) are not as common as in other countries. Despite this fact, employers are still advised to make sure that their industry – and their employees – are not covered by a CBA. To maintain compliance with South Korea’s employment regulation, employers need to stay up-to-date with the country’s compensation laws. 

Hire in South Korea in 24h
without your own local entity.

With Horizons, you get quick service, transparent pricing, and expert support.

FAQs

A South Korea PEO and a South Korea EOR are two types of companies which specialize in providing human resources services to businesses in South Korea.

The main difference between a South Korea PEO and a South Korea EOR is in the scope of their services.

South Korea PEOs provide a full range of HR services, including payroll, benefits administration, and employee recruiting—all under one roof as a co-employer. Engaging a South Korea PEO is essentially outsourcing your HR duties in South Korea.

South Korea EORs actually take over as the legal employer of your employees based abroad. South Korea EORs become responsible for labor compliance for your employees in South Korea.

At Horizons, we offer both PEO and EOR services in South Korea. Get in touch now and let us know what service you are seeking.

A PEO in South Korea can feasibly hire both local and foreign nationals to work in South Korea.

However, the ability of Horizons to sponsor your foreign national employee in South Korea may be limited due to visa quotas practiced in many countries.

Contact us with your requirements and our Global Mobility team with review the case and get back to you within 2 business days.

In most cases, Horizons’ South Korea PEO can hire & onboard your employee within 24 hours. The actual start date of the employee will depend on their notice period obligation to their previous employer as well as any relevant hiring rules in South Korea.

It is possible to get a work visa in South Korea. Horizons’ Global Mobility team is a dedicated team of work visa experts. They assess the details of each case to determine feasibility and costs before Horizons applies for the work visa on behalf of your employee. If the Global Mobility team determines that your case is feasible, the process is smooth and transparent. Visa spots in South Korea are limited, however—get started today to secure your employees’ visa spot.