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Employer of Record South Korea
Hire staff and expand your business in South Korea with our fully-managed EOR Service
How we can help
Unrivalled Employer of Record Service in South Korea designed to expand your business seamlessly
Agility EOR delivers services for business’s looking for an Employer of Record in South Korea. We help clients hire new employees or transfer existing employees into a fully-managed EOR service.
We appreciate that each situation and business is different. That is why our personal approach to Employer of Record Services in South Korea takes care of all HR, payroll, recruitment and compliance head aches, and allows you to do what you love best – driving your business forward.
Employer of Record in South Korea
A Brief Guide to South Korea
In the heart of the Eastern Asian region sits South Korea, a dynamic blend of age-old traditions and cutting-edge innovations. The country’s rapid progress since the Korean War has carved out an impressive global niche with a buzzing economy, technological dominance, and rich cultural exports.
Category | Information |
Location | Eastern Asia |
Capital City | Seoul |
Official Languages | Korean |
Area | 100,363 km² |
Population | 51.8 million (as of 2023) |
Currency | South Korean Won (KRW) |
Major Cities | Busan, Incheon, Daegu, Daejeon, Gwangju |
GDP | $1.77 trillion (as of 2023) |
Major Industries | Electronics, Automobiles, Shipbuilding, Petrochemicals, Construction, Retail |
Business Culture
Business Culture in South Korea
In South Korea, business culture has a unique blend of Confucian principles and western practices, making it a fascinating interplay of hierarchy, respect, and innovative spirit. Building a strong, personal relationship is critical to successful business engagements. Face-to-face meetings are preferred over digital communication, as it is seen as a sign of respect and sincerity.
Moreover, punctuality is highly valued, so make sure to be on time or early. Do remember that business etiquette includes a proper exchange of business cards after a slight bow, and it’s usually done with both hands.
Payroll and Taxes
Payroll and Taxes in South Korea
Employee Taxation
In South Korea, income tax rates are progressive, with higher income levels subject to higher tax rates.
Taxable Income (KRW) | Personal Income Tax Rate | Local Income Tax Rate |
0 – 14,000 | 6% | 0.6% |
14,001 – 50,000 | 15% | 1.5% |
50,001 – 88,000 | 24% | 2.4% |
88,001 – 150,000 | 35% | 3.5% |
150,001 – 300,000 | 38% | 3.8% |
300,001 – 500,000 | 40% | 4% |
500,001 – 1,000,000 | 42% | 4.2% |
1,000,001 + | 45% | 4.5% |
Employer Taxation
Employers in South Korea are also responsible for various employer costs, which may include:
Fund Type | Contribution |
National Pension (NP) | 4.5% |
National Health insurance (NHI) incl long term care | 3.999% (contribution capped at KRW 8,824,598 per month) |
Employment Insurance (EI) | 1.15% – 1.75% |
Worker’s Accident Compensation Insurance (WCI) | 0.7% – 18.6% (varies depending on industry) |
Pension and Healthcare
South Korea Pensions
Pension provision in South Korea is administered by the National Pension Service. The pension system is funded by contributions from employees, employers, and the state. As a compulsory social insurance system, it provides income security for elderly citizens and those unable to work. Contribution rates are determined as a percentage of the employee’s wage and are shared equally between employers and employees.
Healthcare in South Korea
South Korea has an enviable reputation for its healthcare system. The National Health Insurance (NHI) system, run by the government, ensures access to good quality healthcare for all residents. The NHI is funded by contributions from employees, employers, and the government, similar to the pension scheme.
While public healthcare is robust, a private healthcare sector also exists offering higher-end services at a premium. Often, private hospitals are chosen for specialized procedures and surgeries due to their advanced facilities and shorter wait times.
Employment Law
Employment Law in South Korea
Relevant Legislation: The Labor Standards Act and the Industrial Accident Compensation Insurance Act are among the key pieces of legislation that guide employment law in South Korea. These laws, alongside others, govern workplace relations and employee rights, providing a comprehensive legal framework for employment.
Employment Contracts: In South Korea, all employment contracts must be in writing, clearly defining terms and conditions of employment. This includes work duties, work hours, wage, leave entitlements, and termination procedures among others.
Working Hours: The standard working week in South Korea is 40 hours, typically spread over five days. The maximum working hours per week, including overtime, cannot exceed 52 hours.
Leave: South Korean employees are entitled to annual paid leave of 15 days after their first year of service. This increases with longevity of service. In addition to annual leave, there are also provisions for paid sick leave, maternity leave, and parental leave.
Overtime: Work exceeding the standard working hours is considered overtime, compensated at a higher rate. The Labor Standards Act limits the maximum working hours, including overtime, to 52 hours per week.
Termination: An employer can terminate an employee for a number of reasons including misconduct, poor performance or business necessity. Proper cause and due process, including a disciplinary hearing, must be followed.
Notice: Employers must provide a notice period of at least 30 days or payment in lieu of notice when terminating an employee. The employer must also provide written reasons for termination.
Severance Pay: Upon termination of employment, employers are required to provide severance pay equal to one month’s salary for each year of continuous service.
IMMIGRATION
Work Permits in South Korea
South Korea’s immigration is administered by the Korea Immigration Service, a government agency that operates under the Ministry of Justice. The immigration process is multifaceted, addressing different types of visas according to the purpose of the stay. From short-term tourism to long-term work and residency, South Korea has specific visas designed to meet various needs.
A visa application typically begins in the applicant’s home country at a South Korean embassy or consulate. Applications must be filled out accurately and submitted along with the necessary supporting documents. Post-approval, upon arrival in South Korea, foreigners intending to stay for more than 90 days must apply for an Alien Registration Card.
When it comes to work-related immigration, there are numerous visa options available. These include:
- E1-E7 Professional Employment Visas: These visas are assigned to different professional categories like professors (E1), foreign language instructors (E2), research (E3), technology transfer (E4), professional occupations (E5), arts and performances (E6), and special occupations (E7). Each category has its specific requirements and qualifications.
- D-8 Corporate Investor Visa: This visa is for those who plan to start a business in South Korea. To qualify, applicants should be investing at least KRW 100 million (approximately USD 86,000) into the venture.
- H-1 Working Holiday Visa: This visa, available to residents of countries that have reciprocal agreements with South Korea, allows people aged 18-30 to travel and work in the country for up to a year.
It is crucial to remember that working in South Korea without a valid work visa is illegal. Companies hiring foreign nationals must ensure that their employees have the correct documentation and that it remains valid for the duration of their employment. Fines and penalties apply for non-compliance with immigration laws.
Public Holidays
South Korea Public Holidays
Holiday | Date |
New Year’s Day | January 1 |
Seollal (Lunar New Year) | January or February (variable) |
Independence Movement Day | March 1 |
Children’s Day | May 5 |
Buddha’s Birthday | April or May (variable) |
Memorial Day | June 6 |
Liberation Day | August 15 |
Chuseok (Korean Thanksgiving) | September or October (variable) |
National Foundation Day | October 3 |
Hangul Day | October 9 |
Christmas Day | December 25 |
Wondering if expanding
in South Korea is right for you?
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The Benefits
South Korea Employer of Record Benefits
When you choose Agility EOR to expand in South Korea, we guarantee an Employer of Record Service tailored to the needs of your business
Compliance
We are on top of regulatory changes in South Korea so you can relax.
Cost reduction
Allow our economies of scale to work in your favour.
High Service Levels
You and your employees have a dedicated account manager.
Fixed Cost Pricing
We will agree our professional fees up front based on your needs - no nasty surprises!
Consolidated Invoicing & Payments
Make one monthly payment to cover all your tax, social and wages costs from one to one thousand employees.
Fast delivery
You can have 'boots on the ground' within days on our infrastructure.
Reduced Risk
All wage taxes are remitted in full to the Korean authorities by professionals ensuring liabilities are met, giving you peace of mind.
Supply Chain Transparency
We only pay employees through local full employed solutions meaning South Korea payroll tax is paid on all funds.
Save Time and Money
Our expertise is at your disposal. The need for you to have internal HR, Payroll and admin staff is eliminated.