What do you need to know to hire in South Korea?
South Korea pays statutory severance to every employee who leaves after 1 year of service, regardless of how they leave. That includes resignations. The minimum wage is KRW 10,320/hour and national pension contributions rose to 4.75% each side from January 2026. Each guide below takes one layer.
· South Korea guide
How does Teamed handle South Korea hiring for you?
Teamed becomes your legal employer of record in South Korea for from $599 per employee per month, with zero FX mark-up in any currency.
Payroll, contracts, and the full Korean employment law stack run on one platform.
Real HR and legal experts manage every South Korea hire, from the first offer letter to the final severance calculation. An actual person, not a chatbot or a pooled queue, handles your Korean team alongside EOR, contractor onboarding, and entity payroll on one platform. There is no setup fee and no exit fee. Employer cost passes through at cost, itemised on every invoice.
A Korean contractor who converts to payroll keeps their record, and that same employee can graduate from EOR to your own Korean entity without re-onboarding. Run the Crossover Calculator to see the month the model flips. EOR is the right model for a first South Korea hire, until it isn't.
- Severance is owed even when an employee resigns. South Korea's statutory severance under the Guarantee of Workers Retirement Benefits Act triggers on any exit after 1 year of service, including voluntary resignation and retirement. Most EOR guides only describe dismissal. The termination guide runs the full formula and the 2026 reform risk.
- There is no statutory paid sick leave. South Korea does not require employers to pay employees during illness. National Health Insurance provides short-term sickness benefit but that is government-funded and not an employer obligation. US buyers who assume two weeks of company sick pay will build the wrong cost model.
- National pension contributions rose in January 2026. The NPS rate increased from 4.5% to 4.75% per side (4.75% employer and employee each) as the first step in a decade-long reform to 13% total by 2033. Every year from 2026 onward the rate steps up. Budget for it now.
Hiring in South Korea adds roughly 11 to 12 percent of gross salary in employer social insurance contributions, led by National Pension at 4.75% and National Health Insurance at 4.07%.
South Korea pays monthly. Payroll withholding tax is due by the 10th of the following month. Statutory annual leave is 15 days after one year. There are 15 public holidays.
Every employee who works at least one year and averages more than 15 hours a week earns statutory severance equal to 30 days of average wages per year of service. This applies on resignation as much as on dismissal.
This page is the map. Each guide below is the detail.
Zero FX. No setup fees. 48-hour onboarding. The price your finance team can forecast against without an asterisk.
How much does it cost to hire an employee in South Korea in 2026?
A South Korea hire costs roughly 111 to 113 percent of gross salary once social insurance is added.
Employer NPS is 4.75% and employer health insurance is 4.07%. Both sit on top of salary.
National Pension (NPS) runs at 4.75% employer from 1 January 2026, up from 4.5% in 2025. National Health Insurance including long-term care adds 4.07% employer. Employment Insurance adds a further 1.15 to 1.75 percent depending on employer size. Workers Compensation premiums vary by industry and are not included in the headline figure. South Korea does not require a 13th month or bonus in law, but sector practice and individual contracts often add one.
Teamed's South Korea price is a starting rate, with zero FX in any currency pairing. No setup fees. No exit fees. Salaries, taxes, and benefits passed through at cost on every invoice. The full breakdown, with worked examples at current rates, is in the cost guide.
Do you need a South Korean entity to hire employees in South Korea?
No. An Employer of Record runs Korean payroll and contracts from day one.
Your own Korean entity becomes cheaper than EOR somewhere around 5 to 8 employees, depending on salary and severance accruals.
Setting up a Korean subsidiary requires registration with the Korean Commercial Court, tax registration, and social insurance enrolment. Setup takes roughly six to eight weeks. An Employer of Record is faster and cheaper at low headcount. Teamed runs Korean payroll, contracts, and severance fund compliance from day one.
The crossover point depends on Korean salary levels and your accounting costs. For most tech roles it lands around 5 to 8 employees. The EOR vs entity guide runs those numbers, including the severance accrual that sits on your books from day one regardless of structure.
Most EOR providers will not tell you when you have crossed it. We do, and we help you move. You progress from contractor to EOR to your own Korean entity on one platform under Teamed's Graduation Model, with tenure preserved.
What changed in South Korean employment law recently?
National pension contributions rose from 9% to 9.5% total in January 2026, with 4.75% per side.
Paternity leave doubled from 10 to 20 days and parental leave expanded to cover children under 12 from February 2025.
The National Pension Act reform set in 2025 raised the NPS contribution rate from 9% to 9.5% of salary, split equally. The rate continues rising by 0.5 percentage points per year until it reaches 13% total in 2033. Budget for the increases now. The Equal Employment Opportunity and Work-Family Balance Assistance Act expanded paternity leave to 20 days, doubled from 10. Either parent can now take childcare leave for children up to age 12.
There is also a pending reform to the employee retirement benefit system. South Korea is considering legislation to phase out book-reserve severance in favour of mandatory externally-funded retirement plans under an expanded ERBSA framework. The exact timeline was not confirmed in accessible sources as at June 2026. The compliance guide covers the day-one obligations and the reform risk.
What benefits must you provide South Korean employees in 2026?
The statutory floor is 15 days of paid annual leave after one year, 15 public holidays, and maternity leave of 90 days.
South Korea has no statutory paid sick leave. National Health Insurance covers illness benefits but the employer pays nothing directly.
Statutory annual leave is 15 days after one year of employment with at least 80% attendance. In the first year, employees earn one day per month worked. Leave grows by one day per every two additional years of service, capped at 25 days after 21 years. South Korea counts annual leave and public holidays separately. There are 15 nationwide public holidays in 2026.
Maternity leave is 90 days standard, with the first 60 days paid by the employer at full salary. The remaining days are government-funded. Paternity leave is 20 days, taken within 120 days of birth. Either parent may take up to 12 months of childcare leave per child. The benefits guide covers each entitlement.
Read the full South Korea benefits guide
What are payroll taxes in South Korea in 2026?
Employer National Pension is 4.75% on insured wages, matched by the employee.
Employees pay income tax on a progressive scale starting at 6% up to 49.5% combined national and local at the top.
South Korean social insurance covers four branches: National Pension, National Health Insurance (including long-term care), Employment Insurance, and Workers Compensation. Employer NPS is 4.75% on insured wages, capped at a monthly ceiling that adjusts each July. Employer health insurance (NHI including LTCI) is 4.07% per side. Employment Insurance adds 1.15 to 1.75 percent employer-side. Workers Compensation rates vary by industry. Payroll withholding tax is remitted by the 10th of the following month.
Income tax runs from 6% on the first band through 15% up to a national rate of 45% at the top, with a 10% local income tax surtax applied on top, giving an effective top rate of 49.5%. There is no zero-rate personal allowance band; instead, residents deduct a personal basic deduction from adjusted gross income. The tax and payroll guide sets out every band and threshold.
How do you terminate an employee in South Korea?
Korean law requires justifiable cause to dismiss any employee at a firm with 5 or more workers.
Minimum notice is 30 days, or pay in lieu. Statutory severance is 30 days of average wages per year of service, owed to every employee who leaves after 1 year.
The Labor Standards Act requires employers with 5 or more workers to have justifiable cause before any dismissal. The employee must receive 30 days written notice, or 30 days of ordinary wages in lieu. During the first three months of employment the notice requirement does not apply. An unfair dismissal claim must be filed with the Labour Relations Commission within 3 months of the dismissal. The primary remedy is reinstatement plus back pay, not a compensation cap.
Statutory severance under the Guarantee of Workers Retirement Benefits Act (GWRBA) is 30 days of average wages for each full year of continuous service, with the final partial year pro-rated. It applies regardless of termination reason. Wages and severance must be paid within 14 days of the termination date. For collective dismissals driven by business necessity, the employer must notify employee representatives 50 days in advance. The termination guide covers each route.
What should you know before hiring in South Korea?
Two things catch US buyers out. The first is that severance accrues from day one for every employee, regardless of how they leave.
The second is that the 52-hour weekly cap is a hard limit and carries criminal penalties for the employer if breached.
Severance is not a dismissal payment. It is a retirement benefit that accrues continuously. Every employee who works 1 year and averages 40 hours hours a week earns 30 days of average wages per year. An employee who resigns at year five walks out the door with five months of average wages in severance. Build this into every offer. The termination and cost guides show the accrual math.
The 52-hour weekly cap applies to most employers. South Korea limits total working time to 40 hours ordinary hours plus 12 hours overtime. The cap applies to employers with 5 or more workers. Violations can result in criminal charges against company officers, not just fines. The hiring guide covers working time, rest periods, and the employer obligations in full.
Frequently asked questions
How much does it cost to hire an employee in South Korea?
Plan on roughly 111 to 113 percent of gross salary once employer social insurance is added. National Pension is 4.75% per side from January 2026. National Health Insurance including long-term care adds 4.07% employer-side. Employment Insurance adds a further 1.15 to 1.75 percent. Also budget for statutory severance, which accrues at 30 days of average wages per year of service from the first year. Teamed's South Korea fee is one flat number per employee per month, with zero FX mark-up. The cost breakdown guide has worked examples.
Can a US company hire in South Korea without an entity?
Yes. An Employer of Record like Teamed runs Korean payroll, contracts, and compliance through its own registered entity. You direct the work. Teamed becomes the legal employer of record. Setup takes 48 hours once terms are confirmed. Setting up your own Korean subsidiary takes six to eight weeks and requires Commercial Court registration.
What is the South Korean minimum wage in 2026?
The statutory minimum wage is KRW 10,320/hour from 1 January 2026, up 2.9% from KRW 10,030 in 2025. It was set by MOEL Notice 2025-47 under the Minimum Wage Act. The monthly equivalent on a standard 209-hour basis is KRW 2,156,880. South Korea has no separate minimum monthly wage; all minimum wage calculations start from the hourly rate.
What is the statutory severance in South Korea?
Every employee who completes 1 year of continuous service and averages more than 15 hours a week earns 30 days of average wages for each full year of service. The final partial year is pro-rated. Severance is triggered by any departure including resignation, redundancy, and retirement. All wages and severance must be paid within 14 days of the last day of employment (Labor Standards Act Article 36; GWRBA Article 9).
What are South Korean statutory notice periods?
Employers must give at least 30 days written notice of dismissal, or pay 30 days of ordinary wages in lieu. The notice requirement does not apply to employees in their first three months of continuous service. For collective dismissals driven by business necessity, employee representatives must be notified 50 days in advance under Labor Standards Act Article 24.
What is the minimum annual leave for a South Korean employee?
Statutory annual leave is 15 days after one year with at least 80% attendance, under Labor Standards Act Article 60. In the first year, employees earn one day per month worked. Leave increases by one day per every two additional years of service, up to a maximum of 25 days. South Korea counts annual leave and public holidays separately. There are 15 official public holidays in 2026.
South Korea reads as a high-compliance market, but the logic is clear once you learn it. The Labour Standards Act, the severance rules, and the 52-hour cap are all codified. The mistake most buyers make is treating Korean severance like a dismissal payment. It is not. It accrues from day one, it is owed on resignation, and it will be the largest line on your offboarding invoice if you have not planned for it.
South Korea's rules are written down. Severance accrues from day one. The 52-hour cap has criminal teeth. National Pension rises every January until 2033.
Most of the cost surprises come from not reading those rules before the first offer goes out.
Read the right South Korea guide before that hire, not after the first severance calculation.
