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Recruitment Agency | Mozambique Recruitment Agency | Outsourcing Solutions in South Korea

Cserve offers complete payroll, PEO and HR services in South Korea

A mature, industrialized economy, South Korea is the world’s 12th largest economy. It has the second highest spending on R&D to GDP ratio and key industries to watch out for include bio health, smart cities and smart homes and AI. While the economy has performed well, a key risk is the impact of US-China trade tensions.

Doing Business in South Korea

Seoul presents an optimal business environment, ranking first in the 2021 Bloomberg Innovation Index. It is the world’s best digital city and is at the center of the R&D industry. There are many attractive industrial clusters and business areas available which make Seoul attractive to business. Additionally, the government provides incentives such as cash grants, subsidies and tax exemptions to boost economic growth. Download PDF

Setting up a new business or expanding an existing one in South Korea is straightforward. Choose how your company operates from a range of entity types that suit your individual circumstance.

Banking Hours: 9:30 am to 4:30 pm from Monday to Friday

The standard working week is from Monday to Friday from 9:00 am – 5:00 pm

Relevant laws pertaining to wages, working hours, leave and more are prescribed by the Labor Standards Act which applies to all businesses or workplaces that employ five workers or more.

Main Industries Textile, steel, car manufacturing, shipbuilding, and electronics.
GDP Growth 0.60%
Dates & Numbers yyyy/mm/dd
Official State Name The Republic of Korea
Population 51.78 million
Capital Seoul
Major Languages Korean
Currency South Korean Won
Internet Domain .kr
International Dialing Code +82

 

Payroll

The government conducts regular inspections and provides guidance on labor management to assist companies in rolling out the new minimum wage.

It is acceptable to provide employees with online payslips

Payslip

Between 1 - 3 months notice is required to terminate employment

Employee Termination

Payroll reports must be kept for five years

Reports

There are no provisions mandated by law regarding the 13th month salary

13th month salary

Employees receive paid annual leave of 11 days for the first year of employment

Annual Leave

9,160 KRW per hour

Minimum Wage

Employees are not entitled to any statutory sick leave

Sick Leave

Employees are entitled to overtime pay calculated at 150% of their regular rate which increases to 200% for work performed at night (after 10 pm)

Overtime

Employees are entitled to 90 days paid maternity leave.

Maternity & Paternity Leave

Employees who are paid monthly are entitled to one month’s pay for each year of employment

Severance Pay

Tax and Social Security

Taxes include personal income tax, local income tax and alternative minimum tax. The Retirement Pension System requires employers to set aside an amount equivalent to retirement benefits at a financial institution outside the company and pay their employee pensions in the form of an annuity or lump sum at retirement.

Tax

A taxpayer pays income tax on their income. A resident is subject to income tax on all worldwide income. Foreign workers who have stayed in Korea for five years or less are taxed on Korea-sourced income only and their foreign-source income is reportable only where it is paid by a Korean entity or transferred to Korea.

25%

45%

10%

10%

Corporate Income Tax Personal Income Tax Sales Tax VAT

Social Security

The Employee Welfare Fund System requires employers to contribute a portion of the company’s operating profits to create a fund for employee welfare.

19.2%

10.1%

9.1%

Social Security Rate Social Security Rate for Employers Social Security Rate for Employees
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Employment Law

In order to protect working conditions and improve employment practices, the government offers the EAP (Employee Assistance Program), livelihood security loans and credit guarantee support.

Employment Agreement
Key terms of employment must be provided to employees in writing such as wages and work hours. While terms can be implied, employers are advised to provide written employment agreements.

Working condition
The government, through labor management specialists, provides support for the voluntary improvement of working conditions to micro and small sized businesses with poor working conditions.

Leaves
Employees are only entitled to the minimum statutory annual leave if they maintain 80% attendance in the previous year of employment. Generally, employees are not legally entitled to time off for non-work related illness or injury but it is common for employers to allow this.

Employment termination
Employers are prohibited from dismissing an employee without just cause and a high threshold must be met in order to justify redundancies.

30 days

Minimum notice period for terminating an employee

40

Working hours per week

15 days

Total number of days for Compassionate & Bereavement Leave

12 days

Total number of public holidays

Immigration

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There are multiple visas available whether for short term visits, medical treatment, study, investment, professionals, trade and more. Working professionals are able to enter the country using visas for short-term employees, job seekers, business startups, research and more. Applications can be processed through e-Visas or at the diplomatic missions abroad.

Residency permits
A foreign worker who plans to enter Korea must possess a valid passport and valid visa which matches their entry purpose. Entry without a visa is permitted in the event that they are exempted from their re-entry permit, there is a visa exemption agreement between the person’s country and Korea, they are specially approved to enter by Presidential Decree or have been issued a refugee travel document. Single-entry, double-entry and multiple-entry visas are available. Foreigners who plan to stay for over 90 days from their date of entry must register with their jurisdictional immigration offices within 90 days from date of entry.

Work Permit validity 3 year
Required Documents

EU national requirements:

A copy of their employment contract

Educational and professional certificates

Criminal record (if applicable)

Recommendation letter

Original passport and copies

Colored passport-size photo.

Compliant, reliable, error-free and touchless payroll in South Korea

Build the best team and hire top talent compliantly in South Korea. Get in touch with South Korea payroll outsourcing & PEO specialists for a free consultation!

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