South Korea: A Guideline to Payroll and Employer of Record

Establish your presence globally with Neeyamo as we help you go beyond borders to manage your international payroll services and hire new talent in South Korea.

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South Korea's mandatory military service for all male adults aged 18-28 sets it apart as a unique talent pool for organizations. This requirement instills a culture of discipline, dedication, and hard work from an early age, making Korean men highly valuable in the workforce. Their military service imparts skills like teamwork, leadership, and adaptability, which are directly transferable to corporate settings. Consequently, Korean talent offers organizations a resourceful and disciplined workforce, positioning them for success in the global market.

Do your organization’s expansion plans require you to hire employees in South Korea? Do you lack a physical entity in the country – a key requisite to hire local talent? Global payroll companies like Neeyamo, assist organizations worldwide with onboarding and managing employees in South Korea - processing payroll, managing local and global payroll compliance requirements, benefits, and more.

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Seoul, South Korea
Neeyamo Enterprise Solutions LLC #924 Gangnamjeil B/D 109
109, Teheran-ro, Seoul, Gangnam-gu, 06134

Tools And Instances

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Global Payroll

Neeyamo’s global payroll solution covering 180+ countries

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Global Work

A tech-based EOR solution to manage your extended workforce

Facts And Stats




South Korean Won (KRW)

Official Language


Fiscal Year

01 January - 31 December

Date Format


Country Calling Code


Other Languages

English, Japanese, Chinese, and Russian.

Time Zone


Global Payroll


What is Global Payroll?

Handling payroll for a widespread workforce can pose a significant challenge for any organization, and the added complication of compliance can make things worse. If companies spend more time processing payroll, it directly impacts day-to-day operations and their overall productivity. The solution to this is global payroll outsourcing using the help of global payroll providers.

What is a global payroll system?

Over the years, Neeyamo – Global Payroll Services has observed these complexities and strived to provide global payroll solutions through a single technology platform – Neeyamo Payroll. Neeyamo's global payroll systems ease the process for companies looking to outsource their global payroll requirements and aid them in maneuvering the tricky payroll system in South Korea. Neeyamo's payroll software provides the perfect solution for all your global payroll needs – for employees working in primary geographies, the long-tail region, remote or internationally located.

How is payroll calculated?

Neeyamo acts as your personalized Payroll Calculator. Ensuring adherence to local regulatory requirements using multi-level controls. Providing timely and accurate payroll, courtesy of our experts worldwide and using a tech-based integrated smart helpdesk solution with seamless support experience manned by payroll experts - Neeyamo has all your payroll needs covered.

Payroll Taxes

Payroll tax is the percentage amount retained from an employee's salary and paid to the government to invest in the general population's welfare. These are statutory in nature and are levied from both the employer and employee. Additional statutory contributions are made by employers towards aiding both short-term and long-term benefits for their employees.

Employee Taxes

Employee Contributions:

  • National Pension (taxable monthly income capped at 5,240,000.00 KRW) - 3.9245%
  • National Health Insurance (monthly contribution capped at 7,047,900.00 KRW) - 6.86%
  • Long-term care insurance (monthly contribution capped at 345,600 KRW) - 0.80%
  • Employment Insurance (varies by industry) (increasing to 0.90% effective from 1st July 2022) - 16.08%

Employee income tax:

up to 12 million KRW 6.00%
12 million KRW to 46 million KRW 15.00%
46 million KRW to 88 million KRW 24.00%
88 million KRW to 150 million KRW 35.00%
150 million KRW to 300 million KRW 38.00%
300 million KRW to 500 million KRW 40.00%
500 million KRW to 1 billion KRW 42.00%
Above 1 billion KRW 45.00%

Employer Taxes

  • 4.50% - National Pension (taxable monthly income capped at 5,240,000.00 KRW)
  • 3.924% - National Health Insurance (monthly contribution capped at 8,203,680.00 KRW)
  • 1.05% - 1.65% - Employment Insurance (varies by industry) (increasing to 1.15% to 1.75% effective from 1st July 2022)
  • 5.76% - Long-term care insurance (monthly contribution capped at 345,600 KRW)
  • 0.70%-18.60% - Worker Accident Compensation Insurance (rate is dependent on the type of business)
  • 0.50% - Resident Tax
  • 16.43% - 34.93% Total Employment Cost

Payroll Cycle


Undoubtedly, payroll is a critical process for any organization. The pay cycle in South Korea refers to the period for which an organization pays its employees, and this can vary depending on the pay frequency that the organization chooses to adopt.


The payroll cycle in South Korea is generally monthly, and payments are usually made on the last working day.

13th Month Cycle

There is no legislation for 13th-month payments in South Korea.

Global Work


Employer of Record / EOR: Meaning

An Employer of Record services / EOR services provider helps you eliminate the hassle of handling complexities while onboarding a new employee in an international location. They help bridge the gap that otherwise mandates organizations to have a local registered entity and a local bank account prior to making a job offer to an international hire.

An Employer of Record services / EOR services provider acts as a legal employer, facilitates salary payments, and manages other statutory requirements such as health insurance, payroll taxes, and employee benefits, ensuring compliance with local tax laws and regulations.

This allows organizations to focus on collaborating with the employees in South Korea for operational tasks, with the knowledge that they have a cost-effective solution like Neeyamo to support their employer of record, payroll services, and HR requirements as they continue their global expansion.

Neeyamo, being a Cloud-based Payroll company, and providing one of the best HRIS and payroll software solutions, strives to provide its customers with a seamless employee management experience and offers global compliance in payroll and EOR aspects with our Global Payroll Technology Stack.

HR Mandates and Practices

Minimum Wage

Effective 1 January 2024, the minimum hourly wage in South Korea will be KRW 9,860 and the monthly wage will be KRW 2,060,740.


Anything over 40 hours per week or 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.

Data Retention Policy

Employers and employees are required to maintain their withholding documents, records of disbursements, and tax filings for at least five years. Employers must retain documents related to health insurance for three years.

With effect from January 1, 2023, tax-free limit on meal expenses included in  the  monthly  salary  of  office  workers from the current 100,000 won to 200,000 won from January. And the health insurance premium rate is increased by 1.49%.

Hiring and Onboarding Requirements


The National Human Rights Commission of Korea Act (the NHRC Act) stipulates that preferential treatment, exclusion, discrimination, or disadvantageous treatment of specific persons based on gender, religion, disability, age, social status, region or country of origin, ethnic origin, physical appearance, marital status, maternity, family background, race, skin color, ideology or political opinion, criminal record, sexual orientation, an academic career or medical history without just cause shall constitute a ‘discriminatory act violating the equal right (Article 2(3) of the NHRC Act).

However, preferential treatment of certain groups of persons, such as men of national merit, disabled persons, women (where the number of female workers is disproportionate to the number of male workers), senior citizens (at least 55 years old), and young adults (aged between 15 and 29) is excluded from the above.


Probation periods in South Korea for permanent employees are generally between 1 and 3 months. It is rare for employers to terminate a contract once the probation/training has been completed since the company must pay unemployment.


National Holidays

Previously Labor Day (1 May) was the only mandatory paid national holiday for private-sector employees. Public holidays generally were not mandatory in the private sector. However, under current legislation, public holidays must be paid for. These holidays are:

  • Jan. 2: New Year's Day
  •  Jan. 21: Seotdal Geumeum
  • Jan. 23: Korean New Year
  • Mar. 1: Independence Movement Day
  • May 5: Children's Day
  • May 27: Buddha's Birthday
  • Jun. 6: Memorial Day
  • Aug. 15: National Liberation Day of Korea
  • Sept. 28: Chuseok
  • Oct. 3: National Foundation Day
  • Oct. 9: Hangul Day
  • Dec. 25: Christmas

Other days are temporarily designated by the government.

Sick Leave

There is no paid leave for non-work-related illness or injury. However, if illness or injury is work-related, the employer must provide paid leave until the time of recovery.

Maternity Leave

90 days maternity leave (120 days maternity leave in case of twins).

Small companies: The government supports allowance for 60 days (capped at 2 million won per 30 days) as maternity leave allowances. The company must pay the difference in salary from the allowance for 60 days (compulsory), and for the last 30 days, the difference payment is up to the company’s decision.

Large companies: the company should pay the total salary for 60 days, and the government only support allowance for the last 30 days (capped at 2 million won per 30 days). The difference is up to the company’s discretion.

Paternity Leave

A male worker can take up to 10 days of paid paternity leave (5 days by the company & 5 days by the government) and request paternity leave of up to 90 days from the day of the child’s birth.

Parental Leave

Parents are entitled to parental leave of up to 1 year until the child reaches the age of 8. The government covers the allowance.

Mothers are entitled to a maximum of 1-year leave

1st-3rd month: Paid at 80% of the regular salary capped at 1.5 million KRW

4th-12th month: Paid at 50% of the regular salary capped at 1.2 million KRW

Fathers are entitled to a maximum of 1 year leave 1st-3rd month: Paid at 100% of the regular salary capped at 2.5 million KRW if the father takes the leave after the mother.

The allowance will be capped at 1.5 million KRW if the mother and the father take the leave simultaneously.

4th-12th month: Paid at 50% of the regular salary capped at 1.2 million KRW.

Work-Related Injury Leave – Employees receive 70% of their wages for up to three months

Other Leave

Family-Care Leave: An employee who needs 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, shall be entitled to unpaid leave for 90 days per year. An employee can use such leave in more than one period, but one period shall consist of at least 30 days.

Child Care Leave: Employees who have a child aged not more than eight years or in the 2nd or lower grade of an elementary school are eligible for one year of unpaid childcare leave.


Notice Period

An employer must give 30 days’ advance notice of dismissal. Should the employer dismiss an employee without giving the requisite notice, it must pay the employee, in lieu, his or her wages for not less than 30 days (ie, an allowance for dismissal).

Severance Pay

Under the Act on the Guarantee of Employees’ Retirement Benefits, an employer may sign up for a retirement pension plan or give an exiting employee severance pay. An employer that signs up for a retirement pension plan and pays its contributions must not give an exiting employee severance pay separately. Where an employer elects to pay an exiting employee severance pay, the severance pay is calculated under the following formula: average daily wage in the last three months multiplied by 30 days multiplied by the number of years of service.

This must be paid within 14 days of the employee’s resignation.

A business that is newly established after 26 July 2012 (excluding new businesses resulting from mergers or divisions) must establish a defined benefit or contribution plan within one year of its establishment after seeking the opinion of the employees’ representative (article 5 of the Act on the Guarantee of Employees’ Retirement Benefits).



Any foreigners coming to work in South Korea must 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 which the employee will be undertaking. The appropriate visa needs to be sought to allow an employee to stay in South Korea for more than 90 days.

Types of visas

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 that a public or private institution invites 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 that a public or private institution invites 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 who 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).

Employee Background Checks

Legal and Background Checks

To the extent background checks involve collecting personal information (ie, information relating to a living individual that makes it possible to identify the individual), an employer must obtain the prior consent of the applicant (article 15(1) of the Personal Information Protection Act (PIPA)). Additionally, separate consent must be obtained where sensitive information (ie, information relating to ideologies, beliefs, admission to or withdrawal from a trade union or political party, political opinions, health, sexual life, DNA records (obtained from DNA test results) and criminal records) is being collected (Article 23(1) of PIPA).

Subject to obtaining prior consent, an employer may access criminal and investigation records of an applicant only in certain limited industries, such as child-related industries and the medical industry (Article 6(1) and 6(3) of the Act on the Lapse of Criminal Sentences).

Where an employer intends to hire a third party to conduct background checks, it must first obtain consent from the applicant (Article 32(1) of the Credit Information Use and Protection Act), and all costs related to it must be borne by the employer (article 9 of the Fair Hiring Procedure Act).

Last updated on December 15, 2023

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