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.
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.
*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.