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 8,390 per hour
- Standard work hours are 40 per week or 8 hours per day
- Employment contracts must be in writing
- Companies with 30+ employees must create a labor management council including managers and workers, with meetings held every 3 months
- About 10% of South Korean workers belong to trade unions
- Payroll tax is required in South Korea, and varies from 6% – 38% based on income
- Year-end tax reporting is required with the Korean National Tax Service
- Work visas must be submitted by employers for the intended employee. Common visa types include; short term employment, corporate resident or company assignment, and specific job visas
- In accordance with the labor laws in Korea, employers are required to pay employees for sick leave only in cases of occupational injury or illness, although many employers choose to offer paid sick leave for non-work illness upon receipt of proof of illness from a doctor
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 one easy-to-use technology 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 at the same time. To learn more about simplifying payroll in South Korea, click here