Payroll and Benefits Guide South Korea
Last updated: Mar 03, 2026
Contribution
| Employer Payroll Contributions | |
|
4.75%
|
National Pension (with Max 302,570) |
| 3.595% | Health Insurance (with Max 4,567,690) |
| 0.9448%/7.19% of HI premium | Long-Term Care Insurance |
| 0.76% | Industrial Accident Insurance |
| 1.15% | Employment Insurance |
| 11.1998% |
Total Employment Cost |
| Employee Payroll Contributions | |
|
4.75%
|
National Pension (with Max 302,570) |
| 3.595% | Health Insurance (with Max 4,567,690) |
| 0.9448%/7.19% of HI premium | Long-Term Care Insurance |
|
0.90%
|
Employment Insurance (varies by industry, not capped) |
|
0%
|
Worker’s Compensation Insurance |
| 10.1898% |
Total Employee Cost |
| Employee Income Tax | |
|
6.00%
|
up to 14 million KRW
|
|
15.00%
|
14 million to 50 million KRW
|
|
24.00%
|
50 million to 88 million KRW
|
|
35.00%
|
88 million to 150 million KRW
|
|
38.00%
|
150 million to 300 million KRW
|
|
40.00%
|
300 million to 500 million KRW
|
|
42.00%
|
500 million to 1 billion KRW
|
|
45.00%
|
1 billion KRW and above
|
| Local Income SurTax | |
| 0.60% | up to 14 million KRW |
| 1.50% | 14 million to 50 million KRW |
| 2.40% | 50 million to 88 million KRW |
| 3.50% | 88 million to 150 million KRW |
| 3.80% | 150 million to 300 million KRW |
| 4.00% | 300 million to 500 million KRW |
| 4.20% | 500 million to 1 billion KRW |
| 4.50% | 1 billion KRW and above |
| The greater of: 45% of income tax liability (35% applied to income tax liabilities of up to KRW 30 million) before exemptions or actual tax after exemptions |
Alternative minimum tax (business income of a resident individual and Korean-source business income of a non-resident individual) |
| Non- Resident Tax | |
| 19.00% | Flat rate (20.90% inclusive of local income tax) for foreign employees with less than 5 years residency in Korea. |
Employer taxes
Employee taxes
Minimum Wage
General
The National Minimum Wage in South Korea is 10,320 KRW per hour. The minimum wage is applicable to all companies and employees (regardless of residency status)
MINIMUM WAGE (PER MONTH)
Payroll
Payroll Cycle
The payroll cycle in South Korea is generally monthly and payments are usually made on the last working day.
13th Salary
There is no legislation for 13th-month payments in South Korea.
Authority Payments
| Authority Payment | Dates | Methods |
|
국민건강보험 |
Monthly; 10th of the following month |
*ICP trust account to localize payments *Local account owned by client (Payment by Client or Direct debit) |
|
**세무서 – Tax office (account under the company’s name) |
Monthly; 10th of the following month |
*ICP trust account to localize payments *Local account owned by client (Payment by Client) |
|
**구청 – Local office (account under the company’s name) |
Monthly; 10th of the following month |
*ICP trust account to localize payments *Local account owned by client (Payment by Client) |
Working Hours
General
The workweek in South Korea is eight hours per day, 40 hours per week.
Overtime
The law provides strict maximum limits on working time, including overtime:
- Maximum Ordinary Hours: The standard working week is 40 hours (Article 3, Legislative Decree 66/2003). Any work beyond this is considered overtime (lavoro straordinario).
- Absolute Maximum Weekly Hours: The average working time must not exceed 48 hours per week, including overtime. This average is calculated over a reference period of four consecutive months (which can be extended up to six or twelve months by the CCNL for technical or organizational reasons).
- Daily Rest: Employees must receive a minimum of 11 consecutive hours of daily rest (Article 7).
- Annual Overtime Cap: In the absence of a specific limit set by the applicable CCNL, the maximum amount of overtime allowed is 250 hours per year per employee (Article 5).
Overtime Compensation Rates
Italy does not have a single statutory overtime premium rate defined by law. The rates are determined by the applicable National Collective Labour Agreement (CCNL) for the employee’s sector.
CCNLs mandate minimum premium pay based on the time and day the overtime is performed. The employee may be compensated either by pay premium or by compensatory rest (time off in lieu), as stipulated by the CCNL.
| Day/Condition | Typical Minimum Premium Rate (Set by CCNL) | Total Pay Rate | Notes |
| Normal Overtime (Mon–Sat, up to 48 hrs/week) | +15% to +25% of the regular wage. | 115% to 125% | The rate often increases for hours worked after the 48th weekly hour (e.g., +20%). |
| Sunday/Holiday Work | +30% to +50% of the regular wage. | 130% to 150% | This premium is applied for work performed on a legally recognized rest day or public holiday. |
| Night Overtime (e.g., 10:00 PM to 6:00 AM) | +50% of the regular wage. | 150% | This high rate may be applied if overtime is performed during the designated night period. |
Leave
Annual Leave (vacation)
Paid leave in South Korea is outlined in the employment contract as a minimum of 11 days paid leave a year, following the completion of one-year of service, in addition to public holidays. This leave increases to 15 days of paid leave when the employee is in the second and third years of service. From the third year and onwards, one additional day of paid leave is added to the entitlement upon completion of every two years of service up to a maximum of 25 days paid leave.
PTO carryover
In South Korea, statutory annual leave does not freely carry over. Employers may apply a valid “use-it-or-lose-it” system only if they properly notify employees and give them a real opportunity to take the leave. If the employer fails to follow the legal notice process, unused statutory leave must be carried over or compensated.
Note:
- For EOS, Unused annual leave can be carried over for one year.
Public Holidays
Certain Public holidays when falling on a weekend are moved to the following working day as a day off in lieu.
| Date | Day | Holiday Name | Holiday Notes |
|---|---|---|---|
| January 1, 2026 | Thursday | New Year’s Day | |
| February 16, 2026 | Monday | Seollal (Lunar New Year) | |
| February 17, 2026 | Tuesday | Seollal (Lunar New Year) | |
| February 18, 2026 | Wednesday | Seollal (Lunar New Year) | |
| March 1, 2026 | Sunday | Independence Movement Day | |
| March 2, 2026 | Monday | Substitute Holiday (for Mar 1) | |
| May 5, 2026 | Tuesday | Children’s Day | |
| May 24, 2026 | Sunday | Buddha’s Birthday | |
| May 25, 2026 | Monday | Substitute Holiday (for May 24) | |
| June 6, 2026 | Saturday | Memorial Day | |
| August 15, 2026 | Saturday | Liberation Day | |
| August 17, 2026 | Monday | Substitute Holiday (for Aug 15) | |
| September 24, 2026 | Thursday | Chuseok (Harvest Festival) | |
| September 25, 2026 | Friday | Chuseok (Harvest Festival) | |
| September 26, 2026 | Saturday | Chuseok (Harvest Festival) | |
| October 3, 2026 | Saturday | National Foundation Day | |
| October 5, 2026 | Monday | Substitute Holiday (for Oct 3) | |
| October 9, 2026 | Friday | Hangeul Day | |
| December 25, 2026 | Friday | Christmas Day |
Private companies with five to 29 employees must now provide paid days off for public holidays as well as substitute holidays (that were previously unpaid).
Sick Days
There is no statutory sick leave entitlement in South Korea. An employer, however, shall compensate an employee who is undergoing medical treatment in an amount equal to 60% of the employee’s average wage during medical treatment.
Maternity Leave
All female employees are eligible for maternity benefits consisting of 90 days of paid leave, increasing to 120 days for multiple/complicated births. The maternity leave is generally taken 45 days before the due date and 45 days after, but a minimum of 45 days leave must be used following the birth (a maximum of 45 days can be used before the birth). The maternity payment is made by a combination of Social Security/Governmental payments and employer payments.
For larger companies in South Korea, the employer should pay the maternity pay at 100% of the regular salary rate for the first 60 days. After which, the Social Security/Government will provide support allowance for the remaining 30 days (capped two million KRW per 30 days) and with the employer having the option to provide the sum of money for any difference to the employee’s regular salary rate. For small companies, the social security/government supports the employer throughout the 90 days.
From 23 February 2025, maternity leave for premature births will increase from 90 days to 100 days. The additional 10 days will be paid by the Government up to the same cap of KRW 2.1 million for every 30 days (effectively, KRW 700,000 for 10 days).
Pregnant employees who work more than eight hours per day are entitled to apply for reduced working hours during pregnancy by two hours a day, and pregnant employees who work less than eight hours per day are entitled to apply for reduced working hours during pregnancy to six hours a day. These reduced working hours during pregnancy can be used only within the first 12 weeks of pregnancy or after 36 weeks of pregnancy. From 23 February 2025, the law will expand to allow this to be used from 32 weeks of pregnancy.
Employees can request up to three days of infertility treatment leave per year, with the first day being fully paid by the employer. From 23 February 2025, infertility treatment leave will increase to six days per year, with the first two days being fully paid by the employer.
Paternity Leave
The father is entitled to mandatory paid paternity leave of a total of 10 days, five paid by the employer and five days paid by the social Security/Government, and must be used within the period of 90 days following the day or birth. This leave must be used in one installment.
From 23 February 2025, fathers are entitled to mandatory paid paternity leave of a total of 20 days, which must be used within the period of 120 days following the day or birth. This leave can be used in up to three installments. Employers will be able to claim wage subsidies for the full 20 days of employer-paid paternity leave (up to approximately KRW 1.6 million).
Parental Leave
Parents of children under the age of eight can request a period of full-time or part-time childcare leave of up to one year. A request for leave should be sent to the employer at least 30 days before the start of the leave period. Childcare leave may be taken in three separate periods, excluding the number of times a pregnant female employee takes leave for maternity protection.
During leave, an allowance is paid by the Social Security/Government at KRW 2.5 million for months one to three, KRW 2.0 million for months four to six, and KRW 1.6 million for months seven and above.
For single-parent employees, the maximum payment amounts for childcare leave is KRW 3 million per month for months one to three, KRW 2.0 million for months four to six, and KRW 1.6 million for months seven and above.
Should one or both parents take their parental leave during the first year of their child’s birth, both parents will be paid 100% of their monthly income.
From 23 February 2025, childcare leave is increased from one year to one and a half years for single parents, parents of a child with a severe disability, or where both parents each take more than three months of childcare leave.
Working parents are entitled to entitled to an additional year of partially government-funded reduced working hours for childcare in addition to the childcare leave. This applies to parents with children under age 12 or in the sixth grade of elementary school or below. Additionally, if there is an unused period of the childcare leave entitlement, double that unused period will be added to the reduced working hours for childcare, meaning that an employee may choose to use reduced working hours for childcare for up to three years. Employees may divide the use of their entitlement to reduced working hours for childcare, with a minimum length of one month for each period of leave.
Other Leave
Work Injury Leave– for any work-related injury, employees are entitled to receive three months of paid leave with 70.00% of the employee’s regular salary.
Menstrual Leave – for female employees, they are entitled to 1 day (menstrual) leave per month.
Family-Care Leave – Unpaid leave for a period of 90 days per year to provide support and care to family members including grandparents, parents, spouse, children, grandchildren and a spouse’s parent in case of their sickness, injury, or old age.
PAID MATERNITY LEAVE (DAYS)
Termination
Termination Process
Terminations in South Korea are highly complex. Terminations must comply with Article 23 of the Labor Standards Act. It requires objectively justifiable reasons which include serious misconduct, insubordination or refusal to follow lawful orders, excessive absenteeism, violation of internal work rules, significant well document underperformance (PIP must have been followed).
Terminations are often resolved via a mutual separation agreement.
| Salary payment interval / date | Final payment on termination | Bank account/payment-method requirement |
|---|---|---|
| Employers must pay wages at least once a month, and the pay date must be set in the employment contract. | When an employee resigns or is terminated after at least one year’s service, statutory severance (retirement allowance) must be paid — practice guides state it must be paid within 14 days after termination. | Wages must be paid in money. |
Notice Period
When an employer intends to dismiss an employee, employer shall give the employee a notice of dismissal at least 30 days in advance of such dismissal. If the employer fails to give such advance notice, he or she shall pay such employee 30 days ordinary wage at the least, however, there must still be a valid cause for the termination.
Severance Pay
Upon termination, workers with 1 year service or more are entitled to severance pay of 30 days Average Wages. Average wages are calculated by using wages for the three months preceding termination and includes variable income/commission for the past 3 months & bonus from past 12 months.
Given the requirements for just cause in termination, disputes are commonly settled through enhanced severance packages. On average, these cases resolve anywhere from 1- 3 months additional severance on top of the notice. This is a case-by-case basis depending on seniority, tenure and willingness of the worker. It is this strongly advised to engage workers on a fixed term contract, under which if termination occurs, the employer generally only has to pay out the balance of the contract’s duration.
Probation Period
Probationary employees are still protected under the Labor Standards Act. If terminated during the probation period, employers are exempt from the notice requirement, but just cause is still required.
Minimal Statutory Termination Costs
Unpaid wages
statutory severance
Unused annual leave pay upon termination.
If company policy or the employment contract provides additional benefits (e.g., bonuses, allowances), those must also be honored unless explicitly excluded
Notice Period after 3 months: 30 days
Severance:
Severance pay is a mandatory requirment in South Korea, regardless of the reason. It applies to both resignaitons and terminations.
Severance is calculated: Average daily wage x 30 days x (Years of continuous service) or simply one month’s average wage per year of service.
Average wage means the total wages paid in the last 3 months before termination divided by the number of calendar days in that period, then multiplied by 30 days to get one month’s worth.
Average Wage = Total wages over last 3 months ÷ Total days in 3-month period × 30
Wages include base salary, bonuses/commissions and regular allowances
Disclaimer: The 30-day notice requirement does not apply if:
The employee has less than 3 months of continuous service, or
The termination is for serious misconduct qualifying as just cause
There is no statutory notice period for employees resigning.
Setting Up a Business
Setting up a legal entity
In South Korea, there are five forms of business entities.
- Joint stock Company (chusikhoesa) : This is the most commonly used corporate vehicle, as it offers shareholders limited liability and shares are generally freely transferable. Shareholders are only liable up to the amount of their contribution to the company’s share capital. A joint stock company is appropriate for a large business requiring large amounts of fixed capital and continued procurement of funds.
- Limited liability Company (yuhanhoesa) : As with a joint stock company, the liability of all shareholders is limited to the amount of their share capital contribution to the company. However, the individual character of each shareholder is taken more into account, transfer of equity is limited, and the company is not open to the public. Therefore, it is appropriate for the operation of a small or medium-sized business owned by a small number of persons.
- Private limited company (yuhanchaek-imhoesa) : The liability of shareholders is also limited to the amount of their share capital contribution to the company. Externally, a private limited company is similar to a limited liability company, but the specific regulation of a private limited company is different. In contrast with a limited liability company, internally a private limited company is a type of trade association.
- General Partnership Company (hapmyunghoesa) : Members bear direct, joint and unlimited liability in relation to the business’s creditors. In principle, all members bear rights and obligations relating to the implementation of partnership affairs and the representation of the partnership. This vehicle is appropriate for an enterprise jointly owned by a small number of persons with a close association.
- Limited Partnership Company (hapjahoesa) : This consists of at least one member with unlimited liability and at least one member with limited liability. Members with limited liability can only participate in the business through their capital contributions and have no right to undertake partnership affairs or represent the partnership.
After completing the application process, a business registration certificate can be printed Incorporation registration happens at the Court Registry Office. Signing up on the government Hometax website is needed to complete
Registration as an employer:
Employers must register their businesses with their local tax office using a business registration application (available at their tax office), a copy of their “business permit” or “certificate of business declaration;” a copy of their lease agreement, a partnership agreement (if jointly operated), Documents certifying Korean residency or no-residency and a copy of passport and visa documents. No fee applies during this process.
New Employee Registration
New employees should be reported to the authorities by 15th day of the month of hire. Registration requirements include
employment contract, employer payroll policy and employee information such as DOB and start date.
International assignees require additional registration documentation relating to health insurance and pension plans. These documents may need to be translated.
Immigration
Any foreigners coming to work in South Korea will need to be registered with the local immigration authorities within the first three months of their stay. The type of work permit and employment visa differs by the role in which the employee will be undertaking. To allow an employee to stay in South Korea for more than 90 days, the appropriate visa needs to be sought:
- E-1 Professor Visa is aimed at foreigners to deliver lectures or do research in their field; it is valid for one year and can be renewed annually.
- E-2 Foreign Language Instructor is aimed at foreigners who wish to teach a foreign language at a company/school/education infrastructure. It is valid for two years and can be renewed every two years.
- E-3 Research is aimed at foreigners invited by a public or private institution to research natural science or advanced technology; it is valid for one year and can be renewed annually.
- E-4 Technological Guidance is aimed at foreigners invited by a public or private institution to provide expertise in natural science or high technology; it is valid for one year and can be renewed annually.
- E-5 Special Profession is aimed at foreigners that are architects, lawyers, physicians, accountants, and other internationally licensed professionals and hold Korean government permission to practice their field of expertise is valid for one year and can be renewed annually.
- E-6 Culture and Art are aimed at foreigners who participate in musical, artistic, and literary activities; it is valid for one year and can be renewed annually.
- E-7 Specially Designed Activities are aimed at foreigners invited to participate in activities designed by the Korean Ministry of Justice through a public or private organization. It is valid for one year and can be renewed annually.
- D-5 Long-Term New Coverage is aimed at reporters working for foreign media (broadcast, newspapers, magazines, etc.). The single-entry visa is valid for three months and can be renewed in one-year intervals.
- Alien Registration Card (ARC) Most people who are staying in South Korea for more than six months also need to obtain their Alien Registration Card (ARC).
VAT
General
The standard rate of VAT in South Korea is 10.00%
Stay up to date on payroll & employment law changes
Version History
Payroll contributions and personal income tax rates have been updated.
The standard rate of VAT in South Korea is 10.00%.
An additional mandatory monthly employer contribution of 0.5% is applied towards ‘resident tax on employees income.
Questions & Answers
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Payroll and Benefits Guide
in South Korea
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
And more...
Public Holidays Calendar
| Date | Day | Holiday Name | Holiday Notes |
|---|---|---|---|
| January 1, 2026 | Thursday | New Year’s Day | |
| February 16, 2026 | Monday | Seollal (Lunar New Year) | |
| February 17, 2026 | Tuesday | Seollal (Lunar New Year) | |
| February 18, 2026 | Wednesday | Seollal (Lunar New Year) | |
| March 1, 2026 | Sunday | Independence Movement Day | |
| March 2, 2026 | Monday | Substitute Holiday (for Mar 1) | |
| May 5, 2026 | Tuesday | Children’s Day | |
| May 24, 2026 | Sunday | Buddha’s Birthday | |
| May 25, 2026 | Monday | Substitute Holiday (for May 24) | |
| June 6, 2026 | Saturday | Memorial Day | |
| August 15, 2026 | Saturday | Liberation Day | |
| August 17, 2026 | Monday | Substitute Holiday (for Aug 15) | |
| September 24, 2026 | Thursday | Chuseok (Harvest Festival) | |
| September 25, 2026 | Friday | Chuseok (Harvest Festival) | |
| September 26, 2026 | Saturday | Chuseok (Harvest Festival) | |
| October 3, 2026 | Saturday | National Foundation Day | |
| October 5, 2026 | Monday | Substitute Holiday (for Oct 3) | |
| October 9, 2026 | Friday | Hangeul Day | |
| December 25, 2026 | Friday | Christmas Day |
Are employees able to request work flexibly? If so, for what?
Employees are eligible for reduced hours for the following:
-Reduced hours instead of parental leave. This can last up to 2 years.
-Reduced hours for family care leave, in preparation for retirement (age 55 or older), or to pursue in academia. Up to one year.
Reduced working hours should be between 15 hours and 30 hours per week.
Are any penalties paid for working weekends or public holidays?
Hi Jessie, The maximum number of working hours per week is 52. Anything over 40 hours per week, 8 hours per day is considered overtime, and payment is 150% of a regular salary. Work done after 10 pm pays 200%. There is no limit for daily overtime for employees, but the weekly overtime cannot exceed 12 hours. There will only be penalties if an employee is forced to work more than the acceptable number of daily or weekly hours.
Thank you Erez!
Why employer need to contribute 0.5% ‘resident tax on employees income.
Hi Nano,
This is a local tax an employer must pay if there the monthly average of the total employee salaries paid for the last 12 months at each business office exceeds 150 million won. The employer must report and pay the employee’s resident tax monthly to the local government where the business office is located.
How to calculate the local tax on employees income?
Hello, you can either use the Cost Calculator or look up the tax table that is available in each country.
Hi, can the final payment for severance be delayed or paid after 14 days?
Hi Niyah, the only way severance can be paid after 14 days is for special circumstances or by mutual agreement between the parties.
What happens if a public holiday falls on the weekend? Do they get a substitute or day off in lieu?
Hi Ali, thank you for your question. Employees receive the following Monday off when a national holiday falls on a Saturday or Sunday. This law applies to companies with 5 or more employees (employers with 5 or fewer employees are not required to give any paid leave).
At what age employees entitled to retire and what are they entitled to?
Hi Gilat, the age of retirement is 60 in South Korea, however, it is very common for individuals to retire much earlier. That being said, pension only begins to kick in at the age of 60 and the amount will vary based on how many years the individual worked, how much money was earned, and how much was contributed towards pension.
Thank you Emily for your replay.
If an employee has reached retirement age, does he usually receive also to a severance package?
If an employee works on a Sunday, is the pay still calculated at 150%?
Yes, working on weekends are paid at 150% salary. After 6 pm it is paid at 200% salary.
Is there any remote work allowance/internet reimbursement mandatory as per law for South Korea ?
While it is not mandatory, some allowance might be provided to cover some of these costs, especially if it is necessary for the job to be completed.
How much is overtime pay for every hour
Hi, Overtime is paid at 150.00% of the standard salary rate, increasing to 200.00% for night work (after 10 pm).
Hi, Do we need to include OT in eligible earnings for Bonus calculation?
Hello, typically overtime is something done by exception, not as a fixed working set up, therefore it would normally not be part of the calculation. Though, depending on the nature of the bonus and overtime agreement in place, it could be considered.
Hi,
I am handling Korean company payroll operation. Like to know if an employee joins on 3rd Working day of the month is she/he is enrolled for 4 social insurance on same month or only from next month onwards?
Thanks,
Baginesh
Hello,
If the start date is 1st of the month then all Social Contributions start within the first month. Workers who start after the beginning of the month will usually see their National pension and National Health contribution pushed to the next month, however the Employment Insurance and Incident insurance will still need to be paid within the starting month.
Hello,
Is there a government advised reimbursement rate for business use of personal car? If not, what is the common practice? I can’t work this out for our company..
There is no specific rate set in law. In the past, however 50 to 80 cents per mile is the common amount to reimburse.