South Korea is the 6th largest economy in Asia, and the 12th largest economy in the world. The government of South Korea is welcoming to foreign investments, making it easy for companies to expand operations there. There are many payroll and labor considerations when starting or expanding your business in South Korea to ensure compliance for your organization.

Managing Payroll and Labor Compliance:

  • The minimum wage in South Korea is KRW 9160 per hour
  • Overtime is paid 150% of the normal hourly wage
  • Holiday overtime is 200% of the normal hourly wage
  • A full-time employee is entitled to severance pay of one month’s wages for each year of continuous employment if they have worked for at least one year
  • Employees are required to pay 2 types of income taxes, national and local. Local income tax is 10% of the national income tax rates
  • National income tax rates vary from 0-45% The top bracket applies to individuals making more than KRW 500,000,000

HR and Statutory Requirements

  • Full time salaried employees receive 15 days of paid annual leave after one year of service
  • Employees earn an additional day of leave for every 2 years worked after the first year. Statutory leave days are capped at 25 days per year
  • Employers are not required to provide sick leave for non-work related injuries or illness
  • Female employees receive 90 days of paid maternity leave and 120 days for multiple births. Leave can be used before or after the birth. The first 60 days of leave is funded by the employer, after that a state fund pays

Holidays in South Korea

  • January 1 – New Year’s Day
  • January 31 – Seollal Holiday
  • February 1 – Seollal
  • February 2 – Seollal Holiday
  • March 1 – Independence Movement Day
  • May 5 – Children’s Day
  • May 8 – Buddha’s Birthday
  • June 6 – Memorial Day
  • August 15 – Liberation Day
  • September 9 – Chuseok Holiday
  • September 10 – Chuseok
  • September 11 – Chuseok Holiday
  • October 3 – National Foundation Day
  • October 9 – Hangeul Proclamation Day
  • December 25 – Christmas Day

Companies must have a local bank account to fund payroll in South Korea, so establishing an in-country bank account is the first step before hiring employees. There are data privacy regulations driven by the South Korea Personal Information Protection Act, so it is vital to ensure employee data, documents and contracts are in compliance with regulations.

Blue Marble has created a cloud-based platform to manage payroll in 150+ countries. Get customized monthly reporting to view your payroll across all countries and currencies in real-time. Our in-country payroll experts in South Korea are here to help when questions come up, so you can focus on your business and ensure compliance. To learn more about simplifying payroll in South Korea, click here