Overview

Capital
Seoul
Currency
South Korean Won (KRW)
Date Format
yyyy/mm/dd

Taxes

Employer

Employer Payroll Tax

4.50%
National Pension
3.68%
National Health Insurance (includes long term care insurance assessed at 10.25% of National Health Insurance contribution)
1.05% - 1.65%
Employment Insurance
0.73%-18.63%
Worker Accident Compensation Insurance
0.50%
Resident Tax
10.455% - 28.955% Total Employment Cost
Employee

Employee Payroll Taxes

4.50%
National Pension
3.68%
National Health Insurance (includes long term care insurance assessed at 10.25% of National Health Insurance contribution)
0.80%
Employment Insurance
8.635%

Employee Income Tax

6.6% (including 10% local residence tax)
up to 12 million KRW
16.% (including 10% local residence tax)
12 million - 46 million KRW
26.4% (including 10% local residence tax)
46 million - 88 million KRW
38.5% (including 10% local residence tax)
88 million - 150 million KRW
41.8% (including 10% local residence tax)
150 million - 300 million KRW
44% (including 10% local residence tax)
300 million - 500 million KRW
46.2% (including 10% local residence tax)
500 million - 1 billion KRW
49.5% (including 10% local residence tax)
1 billion and up
Employer Taxes
3 HIGHEST
3 LOWEST
Brazil
China
Slovakia
South Korea
South Africa
Georgia
Macedonia
82.39%
41.12%
37.2%
28.955%
2%
2%
0%
Employee taxes
3 HIGHEST
3 LOWEST
Romania
Macedonia
Netherlands
South Korea
Georgia
Belarus
Ukraine
45%
28%
27.65%
8.635%
2%
1%
0%

Minimum Wage

General

The hourly minimum wage is 8,590 South Korean won.

Minimum wage (per month)
$4000
$2663
$2491
$1482
$47
$36.80
$2.33
Geneva
Luxembourg
Australia
South Korea
Malawi
Angola
Venezuela
3 HIGHEST
3 LOWEST

Payroll

Payroll Cycle

The payroll cycle is monthlyThere is no statutory payment date. It can be any date set by the company. In practice, it is often on the 25th or last day of the month. 

13th Salary

There is no 13th salary.

Working Hours

General

40 hours per week and 8 hours per day. The maximum number of working hours per week is 52.

 

Overtime

Anything over 40 hours per week, 8 hours per day is considered overtime, and payment is 150% of a regular salary. Work done after 10 pm pays 200%. There is no limit for daily overtime for employees, but the weekly overtime cannot exceed 12 hours.

Leave

Paid Time Off

In the first year, employees are entitled to 11 days per year.  

In the second and third years, employees are entitled to 15 days per year.  

In the third year and onward, one day’s paid leave is added for every two years of employment, up to a total of 25 days. 

 

Vacation days
Public holidays
3 HIGHEST
3 LOWEST
Brazil
Peru
Albania
South Korea
Michigan
China
Federal
30
13
43
30
12
42
28
14
42
11
12
23
2
11
13
5
7
12
10
10
Public Holidays

There are 12 public holidays.

Sick Days

There is no paid leave for non-work-related illness or injury. However, if illness or injury is work-related the employer must provide paid leave until the time of recovery. 

Maternity Leave

90 days maternity leave (120 days maternity leave in case of twins). 

Small companies : The government supports allowance for 60 days (capped at 2 million won per 30 days) as maternity leave allowances, the company must pay the difference of salary from the allowance for 60 days (compulsory) and for the last 30 days, the difference payment is up to company’s decision. 

Large companies: the company should pay the total salary for 60 days and the government only support allowance for the last 30 days (capped 2 million won per 30 days), the difference is up to the company’s discretion. 

PAID MATERNITY LEAVE (DAYS)
410
365
365
90
45
30
0
Bulgaria
Serbia
Albania
South Korea
United Arab Emirates
Tunisia
Federal
3 HIGHEST
3 LOWEST
Paternity Leave

A male worker can take up to 10 days of paid paternity leave (5 days by company 5 days by the government) and request paternity leave of up to 90 days from the day of the child’s birth. 

Parental Leave

Parents are entitled to parental leave of up to 1 year until the child reaches the age of 8. The allowance is covered by the government.  

 

Mothers are entitled to a maximum of 1 year leave 

1st-3rd month: Paid at 80% of the regular salary capped at 1.5 million KRW 

4th-12th month: Paid at 50% of the regular salary capped at 1.2 million KRW 

Fathers are entitled to a maximum of 1 year leave 

1st-3rd month: Paid at 100% of the regular salary capped at 2.5 million KRW if the father takes the leave after the mother.  

The allowance will be capped at 1.5 million KRW if the mother and the father take the leave at the same time. 

4th-12th month: Paid at 50% of the regular salary capped at 1.2 million KRW.  

 

Other Leave

Work-Related Injury LeaveEmployees receive 70% of their wages for up to three months.

Termination

Termination Process

Employees under “contract” or “regular employees” may only be terminated for “justifiable reason attributable” to the employee or “urgent managerial necessity” after the completion of the employee’s probationary period.  

Justifiable Reason for Dismissal of an Employee in Korea 

The Korean Labor Standards Act places the burden on the employer to prove a “justifiable reason to terminate.” According to the Korean Supreme Court, the reason must be “directly attributable to the employee.” Stealing, missing an excessive number of days of work, and violating laws related to the job, have all been deemed enough to terminate. Prior to termination, an attorney should be contacted to allow the company not to terminate an employee in violation of law. 

Managerial Reasons for Laying off an Employee in Korea 

The Korean Labor Standards Act places the burden on the employer to prove that an “urgent managerial necessity exists” before an employee is laid off. The Supreme Court has interpreted this to mean that a company should prove that without the layoff, the company would have extreme difficulty in maintaining operations.  The standard is interpreted strictly. 

Notice Period

Employers in South Korea must provide a 30-day notice before dismissing an employee. In some circumstances, employees are informed about their dismissal a year in advance. However, notice may not be required in the following cases:

  • The employee commits any intentionally wrongful act that produces a damaging effect on the company’s business or operations.
  • The employee is serving a probationary period of three months or less.
  • The employee is paid monthly and has worked for less than six consecutive months.
Severance Pay

A full-time employee is entitled to receive severance pay equal to one month’s salary for each year of employment if they have worked for at least one year and they have worked for more than 15 hours per week or more than 60 hours per month.  

Severance pay is to be paid within two weeks of termination regardless the reason of the termination. 

Probation Period

Probation period can last a maximum of 3 months.

VAT

General

The VAT rate in South Korea is 10%.

Version History

January 1, 2021
Employee income tax: Highest tax bracket raised to 49.5% (including 10% local residence tax) for earnings 1 billion and up.
An additional mandatory monthly employer contribution of 0.5% is applied towards ‘resident tax on employees income.

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    Questions & Answers

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    Dylan S.
    Dylan S.
    6 months ago

    Are employees able to request work flexibly? If so, for what?

    Erez Greenberg
    Admin
    6 months ago
    Reply to  Dylan S.

    Employees are eligible for reduced hours for the following:

    -Reduced hours instead of parental leave. This can last up to 2 years.
    -Reduced hours for family care leave, in preparation for retirement (age 55 or older), or to pursue in academia. Up to one year.

    Reduced working hours should be between 15 hours and 30 hours per week.

    See how Papaya Global can help you automate your global payroll or PEO whilst staying 100% compliant with local labor laws