How To Hire And Pay Employees In South Korea
Emerald Technology's guide to hiring employees in South Korea
South Korean Won is the official currency of South Korea. Its currency symbol is ₩, KRW.
Seoul officially the Seoul Special Metropolitan City, is the capital and largest metropolis of the Republic of Korea.
Korean also known in the language itself as Kugo, is the official language of the Korean Peninsula.
Salaries are paid monthly and are usually made on the last working day.
South Korea has 14 public holidays.
GROW YOUR TEAM IN SOUTH KOREA
NO ENTITY, NO PROBLEM
To start growing your team in South Korea, you must establish a local entity- including an account with a local bank, a local office and an address registered as a subsidiary. This allows you to manage payroll, tax, benefits and compliance for your employees, but can take several months.
Emerald can hire and payroll your workers, quickly and compliantly with their ready to go entity. Make growing your team simple with Emerald as a global partner.
PROS AND CONS OF HIRING IN SOUTH KOREA
South Korea maintains a modern and valuable infrastructure which eases the logistics of business, with internet and transport speeds among the fastest in Asia. High rates of secondary education in South Korea have produced a highly skilled accessible workforce with high average incomes. Additionally, hiring in South Korea creates possibilities for further business in Asia on account of its strategic location between China and Japan. Despite the government providing several schemes, such as free trade zones and tax rebates, to encourage business and investment these incentives are often overshadowed by inefficient bureaucracy. Cultural differences should also be considered when hiring in South Korea, as there are fundamental business principles that should be upheld including loyalty and a hierarchy based on age.
WHY SOUTH KOREA IS GOOD FOR REMOTE WORKERS
With the fastest internet speeds in Asia, South Korea is becoming more popular with remote workers. Despite the cost of living being higher other nearby Asian countries, such as China and Laos, digital nomads continue to choose South Korea for its rich history, advanced technology, and increasingly popular culture. The government has recognised the rise in remote working in South Korea and in response have created a designated digital nomad visa, thereby encouraging more remote working in the future.
WORKING TIME AND OVERTIME IN SOUTH KOREA
The maximum working week in South Korea is 52 hours. Under Korean labour law, employers must allow employees a minimum of one paid day off per week (generally Sunday). Many professional employees work a half-day on Saturday. Employees are allowed to work a maximum of 12 hours of overtime per week, which must be paid at 1.5x the employee’s normal hourly salary.
ANNUAL LEAVE AND PUBLIC HOLIDAYS
Employers are legally required to provide 15 days of paid annual leave to employees who have completed one year’s continuous service. An additional vacation day is paid for each two years of service thereafter, capped at 25 days.
There is 14 public holidays in South Korea.
January 1st: New Year's Day
January 31st: Korean New Year Holiday
February 1st: Korean New Year
March 1st: March 1st Movement
May 5th: Children's Day
May 8th: Buddha's Birthday
June 6th: Memorial Day
September 9th: Harvest Festival Holiday
September 10th: Harvest Festival
September 11th: Harvest Festival Holiday
October 3rd: National Foundation Day
October 9th: Hangeul Day
October 10th: Sports Day
December 25th: Christmas Day
PROBATION PERIOD IN SOUTH KOREA
Though probation period durations are not limited by law, typical probation periods in South Korea last between three and six months.
RESIGNATION AND DISMISSAL IN SOUTH KOREA
By law, employers must provide employees with at least 30 days’ notice, or equivalent payment in lieu of notice. However, employment contracts often provide for longer notice, up to twelve months in certain circumstances. Full- time employees are 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 must be paid within two weeks of termination.
Restrictive covenants are generally enforceable in South Korea, provided they are reasonable and protect an employer's trade secrets. This includes non- compete clauses as well as customer and employee non-solicitation clauses.
CONTRACT OF EMPLOYMENT IN SOUTH KOREA
Under the LSA, all employers in Korea must enter into a written agreement with their employees, which details working conditions, wages, working hours and recess periods, weekly paid days off, and paid annual leave.
MATERNITY LEAVE IN SOUTH KOREA
Pregnant employees are entitled to 90 days of maternity leave, with at least 45 consecutive days of leave to be taken after the birth. Depending on the size of the company, the leave will be paid for by the company or by Employment Insurance. Parents who have worked for an employer for more than one year and have children under six years old are eligible for up to one year of parental leave. This leave will be paid at 40% of normal monthly income, funded by Employment Insurance. Parents cannot take this leave at the same time.
SICKNESS LEAVE IN SOUTH KOREA
There is no legal requirement for employers to provide leave to employees for non-work related illnesses or injuries. It is not uncommon, however, for companies to provide paid sick leave whether or not an injury or illness is work related. Employers are required under the Labor Standards Act to provide paid leave for work-related illnesses or injuries. Sick pay paid to an employee cannot be recovered from the state.
|National Health Insurance||3.68%||3.68%|
|Employment Insurance||1.05 - 1.65%||0.8%|
|Worker's Accident Compensation Insurance||0.73 - 18.63%||None|
HEALTHCARE AND INSURANCE
Healthcare in South Korea is universal and funded through a combination of government subsidies, outside contributions, and tobacco surcharges.
FOREIGN NATIONALS IN SOUTH KOREA
There are two main types of visa issued to foreign nationals working in South Korea: the Long Term (E7) visa and the Short Term / Temporary (C4) visa, which lasts for a maximum of 90 days. Foreign nationals who wish to work in Korea should hold a sojourn status that allows employment.
MINIMUM WAGE IN SOUTH KOREA
South Korea's minimum wage is KRW 6,470 per hour. The minimum wage rate is reviewed annually.
|0 - 12,000||5%|
|12,000 - 46,000||15%|
|46,000 - 88,000||24%|
|88,000 - 150,000||35%|
|150,000 - 300,000||38%|
|300,000 - 500,000||40%|
SALARY PAYMENTS IN SOUTH KOREA
The payroll cycle in South Korea is generally monthly, and payments are usually made on the last working day.
SOCIAL SECURITY CONTRIBUTIONS IN SOUTH KOREA
SOCIAL CONTRIBUTIONS RATES IN SOUTH KOREA
WORKER MISCLASSIFICATION IN SOUTH KOREA
Similar to other countries, South Korea has strict rules on classifying individual contractors and full-time employees differently. Misclassifying your workers can put your business at risk of fines.