South Korea offers a highly educated, tech-fluent workforce with a distinctive statutory severance system. All-in employer cost runs around 1.12x the gross salary, before the separate severance accrual. Here is what to know before your first Korean hire.
Employment runs under the Labor Standards Act, with mandatory enrolment in the four social insurances and a statutory retirement (severance) allowance that accrues from day one. Dismissal requires just cause.
The national minimum wage is KRW 9,860 per hour in 2024*, set each year by a national council.
Monthly payroll. Statutory severance is separate and accrues at roughly a month of pay per year of service.
Around 15 public-holiday days a year, now including substitute holidays for most private employees.
Written terms are required. Probation is commonly three months, often at a slightly reduced wage within limits.
Employer contributions to the four insurances add around 11-12% on top of salary, and a statutory severance allowance of about a month's pay per year accrues on top.
A statutory retirement allowance of about 30 days' average pay per year of service is payable on departure after a year, separate from the insurance contributions.
Employees pay income tax and their insurance share, withheld at source, with a year-end tax settlement. Withholding is the employer's responsibility, which under EOR means ours.
15 paid days a year after one year (11 in the first year), rising by a day every two years to a cap of 25.
90 days of maternity leave (120 for multiples), funded by a mix of employer and employment insurance.
Up to one year of parental leave per parent, partly paid through employment insurance.
There is no general statutory paid sick leave; company policy and injury insurance cover absences.
Dismissal requires just cause and at least 30 days' notice or pay in lieu. Unjustified dismissal can be challenged before the Labor Commission.
The statutory retirement allowance of about a month's pay per year of service is due on departure after one year.
Commonly three months, during which dismissal still needs a reasonable ground.
A contractor working under employer control can be reclassified, triggering back insurance contributions and severance liability.
*All figures are estimates from public sources (2025-26), pending ops verification - same basis as the EOR cost calculator. Not tax or legal advice.
Compliant Korean employment contract, payroll, the four insurances, and severance, handled. One invoice, flat $499 per month.