Guide to employment, payroll and benefits in

Korea (Republic of)

Rivermate offers complete payroll, benefits and compliance services for

Korea (Republic of)

01. Overview

Last updated: 

August 19, 2021

Currency
South-korean Won
Capital
Seoul
Ease of doing business
Language
Korean
Population
51269185
GDP growth

02. Grow your team in

Korea (Republic of)

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

Korea (Republic of)

, particularly if you don't have established local relationships. You can hire employees in

Korea (Republic of)

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

South Korea, officially the Republic of Korea, is an East Asian nation that occupies the southern half of the Korean Peninsula and borders North Korea on land. The Seoul Capital Area, the world's fifth-largest metropolitan city, is home to 25 million people, or roughly half of the country's 51 million people. The Korean Peninsula has been inhabited since the Lower Paleolithic. In the early 7th century BCE, Chinese documents mention its first kingdom. Korea was ruled by the Goryeo and Joseon dynasties after the merger of the Three Kingdoms of Korea into Silla and Balhae in the late 7th century. In 1910, the succeeding Korean Empire was annexed by the Imperial Japanese Empire. Korea was split into two zones after World War II, with the northern zone occupied by the Soviet Union and the southern zone occupied by the United States. In August 1948, after failed reunification talks, the latter became the Republic of Korea, while the former became North Korea. The Korean War began in 1950 with a North Korean invasion, which saw heavy U.S.-led U.N. intervention. China and the Soviet Union aided the South, while China and the Soviet Union aided the North. The country's economy took off after the war ended in 1953, with the highest growth in average GDP per capita in the world between 1980 and 1990. After the June Struggle, authoritarian rule came to an end in 1987, and the country is now considered one of Asia's most advanced democracies, with the highest degree of press freedom. However, corruption and political scandals continue to be serious issues; all four living former South Korean presidents have been sentenced to jail for crimes ranging from misuse of power to bribery and embezzlement, with two of them still serving their sentences.South Korea is a stable nation that ranks seventh in Asia on the Human Development Index. By nominal GDP, it has the tenth-largest economy in the world. Its residents have access to one of the world's fastest Internet connections and the world's most dense high-speed rail network. The nation is the eighth-largest importer and fifth-largest exporter in the world. South Korea was the world's seventh largest carbon emitter in 2017, and the fifth largest emitter per capita. South Korea has been known for its globally influential pop culture, especially in music, TV dramas, and film, since the twenty-first century, a phenomenon known as the Korean Wave. It belongs to the Development Assistance Committee of the OECD, the G20, and the Paris Club.

04. Public holidays

05. Types of leave

Paid time off

Public holidays

Sick days

Maternity leave

Paternity leave

Parental leave

Other leave

06. Employment termination

Termination process

The employer, the employee, or both parties may cancel an employment contract at the end of a fixed-term contract. Employers may fire employees only for a legitimate reason traceable to the employee or for a pressing managerial need, which may involve layoffs.

Notice period

Employers must provide employees 30 days' notice or compensation in lieu of notice before dismissing them. The termination must be in writing and specify the cause for the termination as well as the date. The written dismissal can be given at the same time as the notice, but not later than the dismissal date.

Severance pay

The severance payment must be tantamount to a month's salary for each year of service.

Probation period

According to the legal information website about the Korean Labour Law, the Korean Labor Standards Act does not contain an explicit provision regarding probationary periods.

07. Working hours

General

The standard workweek is 40 hours and the day is eight hours. Employees may work up to an additional 12 hours per week if both parties agree. Certain industries may be permitted to work more than 12 hours of overtime with the Minister of Employment and Labor's approval.

Employees who work on holidays, overtime, or at night are entitled to a wage increase above the standard rate. Work hours at night are between 10 p.m. and 6 a.m.

Employees are entitled to a 30-minute unpaid break after every four hours worked and one hour of unpaid leave after every eight-hour shift.

Overtime

Overtime is defined as work exceeding 40 hours per week, 8 hours per day, and is compensated at 150 percent of a regular salary. After 10 p.m., work is paid at a rate of 200 percent. Daily overtime is unlimited for employees, but weekly overtime cannot exceed 12 hours.

08. Minimum wage

General

The minimum wage in North Korea is set to increase to 9,160 won (US$8) per hour in the next year.

09. Employee benefits

General

South Korea provides free healthcare to all citizens. The National Health Insurance Program is part of South Korea's universal healthcare system. The program is supported by mandatory employer and employee contributions, government subsidies, and tobacco surcharges. The contribution rate is a percentage of an employee's salary that is shared equally by the employer and the employee. Employers withhold contributions and remit them monthly, by the 10th of the following month.

Employers frequently provide additional health and life insurance benefits.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

Korea (Republic of)

to hire a team takes time, money, and effort. The labor law in

Korea (Republic of)

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Korea (Republic of)

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Korea (Republic of)

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Korea (Republic of)

via our Employer of Record / PEO solution.

Ready to get started? Our friendly staff is ready to assist you with all your questions, let's connect.