Current Region & Language
Current Region & Language
Current Region & Language
Currency
South Korean Won (KRW)
Employer Taxes
Employer contributions are approximately 8.5% of gross salaries for social insurance.
Payroll Frequency
Monthly
Language
Korean
Date Format
YYYY/MM/DD
South Korea By The Numbers
52 million
Population
KRW 2.5 quadrillion
GDP
9
National Holidays
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Weekly Working Hours
National Holidays
Leave
Employees are entitled to a minimum of 15 days of paid annual leave, provided they meet the attendance requirement of at least 80% during the previous year. Female employees are granted 90 days of paid maternity leave, with the first 60 days paid by the employer and the remaining days covered by the Employment Insurance Fund. Fathers are entitled to 10 days of paid paternity leave, which must be taken within 90 days of the child’s birth. Additionally, eligible employees can take up to 1 year of childcare leave.
Employment Contracts
It is mandatory to have a written employment contract under Labor Standards Act (LSA).
Types of Employment
There are two types of employment: Employees and Independent Contractors.
Employment Costs
There are no specific requirements regarding employment costs.
IC Class Factors
The determination of proper classifications for independent contractors (IC) relies on several key factors across three main categories. Behavior control focuses on whether the client provides the IC with training or instructions, requires regular reports, or dictates the working hours and location. It also considers if the IC has the autonomy to hire assistants. Financial control examines the possibility of the IC suffering financial loss, the method of compensation, whether the client provides equipment or tools, if the IC works with multiple clients, and if the IC is responsible for business expenses. Relationship of the parties looks at whether the IC has been a previous employee, whether either party can be held liable for early termination, if regular employees are performing similar services, whether the work is integral to the client’s core business, and the length of the project.
Labor Leasing
A license is required to dispatch workers to user companies if the dispatched workers are supervised by user companies.
In a true subcontracting, the third party’s workers should not be directed or supervised by the service recipient company, and in such relationship, no separate “labor leasing” license is required.
Minimum Wage Requirements
The Minimum Wage Act (MWA) provides for a minimum wage levels.
The minimum wage can be fixed on an hourly, daily, weekly, or monthly basis. The hourly minimum wage rate in effect from 2023 is 9,620 KRW.
Medical Benefits
National Health Insurance in the country requires employees to contribute 8.0% of their remuneration, with the premium being split equally between the employee and employer. The employer is responsible for deducting the required amount from each employee’s pay. In addition, both the employee and employer are obligated to contribute to long-term care insurance premiums, which total 12.27%, with the burden shared equally between the two parties.
Probationary Periods
Probation periods are permissible but not mandatory in most employment contracts. A common practice is to set the probation period at 3 months.
Termination Notice
An employer must provide a 30-day notice or pay 30 days of ordinary wages in lieu of notice when terminating an employee who has worked for three months or longer. However, employers are exempt from this requirement if the employee has worked for less than three months, in cases of natural disasters or unavoidable circumstances that prevent business operations, or when the employee has willfully caused damage to the business or its assets, such as through embezzlement.
Severance
All employers, regardless of the number of employees, are required to provide statutory severance pay to a departing employee or to establish retirement pension (a defined benefit, defined contribution, or a hybrid thereof) regardless of the reason for the separation, if such an employee has been with the employer for at least 12 months.
Minimum severance payments are:
“Pay” is defined as the average of the last 3 months’ salary and includes, for example, compensation for overtime, night shift payments, fixed and regularly paid bonus, allowances, and any unused days of annual leave.
Other than the statutory severance payment and 30 days ordinary wages in lieu of 30 days prior notice, there is no mandatory termination pay.
Pre-hire Checks
Immigration checks are generally required. Other checks can be conducted by the employers in compliance with PIPA. Access to an applicant’s criminal and investigation records is restricted to specific circumstances delineated in article 6(1) and (3) of the Act on the Lapse of Criminal Sentences.
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Legal Disclaimer
The information provided on this website is for general informational purposes only and is subject to change without notice. The content on this website is not intended to be a substitute for professional legal advice, diagnosis, or treatment. While we strive to keep the information up to date and accurate, People 2.0 makes no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
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