Hire Employees in South Korea

A yuhan hoesa or jusik hoesa takes three to six weeks including foreign investment notification, capital remittance and business registration. Enrolment in the four insurances follows.

An EOR reaches payroll in two to four weeks and avoids the foreign-investment filing.

Your own entity means incorporating a local company or registering a branch. Either can employ staff and sponsor permits, and either commits you to local corporate tax, accounting and annual filings. Budget 2 to 4 months before the first hire, and remember that the obligation continues even in months with no payroll.

An Employer of Record removes that lead time. The EOR is the legal employer in South Korea, runs payroll and statutory filings, and carries the employment liability, while day-to-day direction stays with you. It is the faster route for the first hires and for testing a market before committing to an entity.

Engaging someone as a contractor is a third option, but only where the work is genuinely independent. Where it is not, reclassification brings back contributions, interest and penalties — see the risk check further down this page.

EOR to enter and to hire a first team. Entity once Korea is settled.

Contractors face a subordination test under the Labour Standards Act. Reclassification is expensive in a specific way: severance accrues from the original start date, so a three-year contractor becomes an employee owed three years of severance immediately.

Break-even rule of thumb: EOR fees begin to exceed the running cost of a small Korean entity somewhere between 15 and 20 employees. Model both before committing — see EOR vs Entity for the full comparison, and plan any later migration so employees keep seniority.

Already paying someone in South Korea as a contractor? Run the risk check before the arrangement is tested by an audit.

Not sure which model fits? A GX specialist will cost EOR vs entity for your exact headcount — free, within two business days. Get a model recommendation

Three rates rose together on 1 January 2026 — pension from 9.0% to 9.5%, health from 7.09% to 7.19%, and long-term care with it. Payroll cost went up even where salaries did not.

The pension increase is the first of eight annual steps: 0.5 points a year until the combined rate reaches 13% in 2033, taking the employer share to 6.5%. Any multi-year cost model needs that built in.

Two elements are easy to miss. Long-term care insurance is calculated on the health insurance premium, not on salary — 0.9448% of income, which is 13.14% of the health premium for 2026 — so it does not appear as a salary percentage anywhere. And employment insurance is not split evenly: the employer pays more because of employment-stability and vocational-training components that scale with company size.

The pension ceiling also moved on 1 July 2026, from KRW 6,370,000 to KRW 6,590,000 of standard income. It resets every July rather than every January, so a calendar-year budget spans two ceilings.

Severance is the big one. One month of average wage per year of service, accruing from year one, payable to anyone with a year or more of service regardless of why they leave. That is about 8.3% a year, and it roughly doubles the headline contribution figure.

Three of the four major insurances rose on the same day, 1 January 2026 — and the pension increase is the first of eight. National Pension went from 9.0% to 9.5%, taking the employer share to 4.75%, and it rises half a point every year until it reaches 13.0% in 2033. Health insurance rose to 7.19% after a three-year freeze, and long-term care to 13.14% of the health premium rather than of salary. Any quote built on the old 9.0% pension rate understates from day one, and the gap widens each year. Two structural points are easy to miss. The pension ceiling moves in July rather than January — KRW 6,370,000 to June, KRW 6,590,000 from July — so two different maxima apply within one calendar year. And the employer’s employment insurance rate varies by headcount, from 1.05% to 1.65%, because the employment stability component scales with company size. Statutory severance of one month per year of service adds roughly a further 8.33% and is routinely left out of cost comparisons entirely.

Four representative profiles with the industrial accident rate at the 2026 national average. Salaries are illustrative market midpoints, not GX operating data. The contribution column shows social insurance only; the severance accrual is shown separately because at about 8.3% a year it is the largest employer cost in Korea and is omitted from most published comparisons. For real market data on your roles, ask for a costing.

Four representative profiles costed on 2026 statutory rates. Salaries are illustrative market midpoints, to be replaced with GX operating data.

Monthly payroll with withholding against the simplified tax table, reconciled in a year-end settlement in February that produces a refund or a further payment for each employee.

Wage payment is taken seriously: since October 2025 employees can claim up to treble damages for deliberate delay, and unpaid wages can bring criminal liability for the company representative.

Income tax runs 6% to 45% across eight bands, plus a 10% local surtax on the tax itself. Withheld monthly against a simplified table and reconciled in the February year-end settlement.

Qualifying foreign engineers and researchers may elect a flat 19% rate instead of the progressive scale for a limited period — worth checking before structuring a senior package.

A written contract is required and must state wages, working hours, holidays and leave. Fixed-term contracts beyond two years convert the employee to indefinite status.

Probation is commonly three months. It does not remove the just-cause requirement, though the standard applied is somewhat more flexible — and probationary pay may not fall below 90% of the minimum wage.

Forty hours a week, with overtime capped so that total working time cannot exceed 52 hours in a week — 40 standard plus 12 overtime. This is a hard ceiling, not an average.

Breaching it carries criminal liability for the company representative, not merely a fine. Overtime is paid at 150%, night work at 150%, and holiday work at 150% or 200% beyond eight hours.

Fifteen days of paid annual leave after one year of service, rising by one day every two years to a maximum of 25. In the first year, one day accrues per completed month.

Employers must formally notify employees of unused leave and encourage them to take it — without that documented process, the employer remains liable to pay it out.

Fifteen to sixteen public holidays a year, with substitute holidays when certain holidays fall on a weekend, giving a paid weekday off instead.

Seollal and Chuseok each run three days and effectively close the country.

South Korea observes 21 paid public holidays in 2026. Dates that fall at a weekend and any substitution rules are set out below; entitlement is separate from annual leave.

Maternity: 90 days, 120 for multiples, with the first 60 days paid by the employer and the balance by employment insurance, subject to a cap.

Paternity: 20 days, expanded in recent reforms, paid by employment insurance.

Parental leave: up to 18 months per parent for a child under 12 or in the first six years of school, paid by employment insurance on a scale, with additional benefit where both parents take it.

Sick leave: there is no statutory paid sick leave for non-occupational illness. Employees use annual leave or unpaid leave, and many employers provide their own scheme.

Dismissal requires just cause and a fair procedure, with 30 days’ notice or pay in lieu. Poor performance is rarely sufficient without documented improvement steps, and the Labor Relations Commission reinstates readily.

Severance pay is separate from any dismissal question. Any employee with a year or more of service receives one month of average wage per year on leaving, whether they resign, retire or are dismissed. It must be paid within 14 days.

Because it accrues from day one and is owed on resignation, severance is a running liability rather than an exit cost — which is why it belongs in the monthly cost model, not the termination section.

E-7 is the usual status for specialist professionals and requires a degree plus relevant experience, with the sponsoring employer tied to the visa. D-8 covers intra-company transfers and investors.

Allow one to three months. Changing employer requires a new sponsorship rather than a transfer.

The recurring exposures are quoting a cost model that omits the severance accrual, breaching the 52-hour ceiling, missing the long-term care calculation because it sits on the health premium, and assuming performance dismissal is available.

The 52-hour cap carries criminal liability for the company representative, not a fine on the company. That is unusual and worth flagging to whoever signs off on workload.

Enrol the employee in all four insurances within 14 days of the start date, and issue a written contract stating wages, hours, holidays and leave.

Confirm before the offer: that the severance accrual is in the cost model at about 8.3%, whether the role will require overtime within the 52-hour ceiling, and whether the employee qualifies for the flat-rate foreign tax election.