South Korea
South Korea’s a great place to hire talent. And if you’re thinking about making a remote hire, you’re in the right place. In the next five minutes, we’ll teach you how to hire there—without spending thousands of dollars on EOR fees and legal red tape:
Country snapshot
CURRENCY
South Korean Won (KRW)
EMPLOYER TAXES
9.955-28.455%
PAYROLL FREQUENCY
Monthly
OFFICIAL LANGUAGE
Korean
It’s the fastest way to hire globally
Hiring employees takes months, at the minimum. When you hire with Thera's locally-generated contracts, it’s a matter of days or weeks. This means you can hire the best talent, fast, without losing them to a hellish procession of paperwork.
It’s a lot cheaper
It costs just $0 to sign up for Thera, then $25 per month to hire your contractors with Thera. If you hired employees manually (or did contracting on your own), you’d likely be on the hook for thousands of dollars each month. Setting up an entity alone can cost tens of thousands of dollars.
It’s more flexible for you & your team
Can be less risky than hiring employees
Hiring employees is a bigger commitment, and can open you up to increased liabilities and regulations. When you hire contractors overseas, your biggest risk is misclassification—but laws surrounding contractor classification are often significantly more straightforward.
Some people want to be employees
The contractor life isn’t for everyone—some people want the security that being an employee often appears to provide. Though it’s rare, this does happen, and it’s one disadvantage of manage an all-contractor team.
You might not have as much control over your talent
Most countries’ contractor-employer relationship laws stipulate that the employer can’t set fixed working hours, among other things. These laws give contractors more freedom over how and when they do their work than an employee would have. In reality, however, most contractors are willing & able to work on the company’s schedule—it’s a matter of setting expectations beforehand.
Laws about hiring are complicated, and the same is true in South Korea. But there are ways to sidestep the headaches—if your company hasn’t already established a physical presence in South Korea, you have two real options when it comes to hiring. We’ll detail both below.
Hire talent as contractors
Hire talent as employees
If you’ve read up until this point, you’ll know that it’s easier, cheaper, and more flexible to hire contractors in South Korea than employees. Still, there are valid reasons why you might want to hire employees instead. The content below is for you—we’ll cover employer taxes and obligations in South Korea.
Employer tax
Employer Contributions
- 9.955-28.455%
Paid Time Off (PTO)
In the first year, employees are entitled to 11 days per year.
In the second and third years, employees are entitled to 15 days per year.
In the third year and onward, one day’s paid leave is added for every two years of employment, up to a total of 25 days.
Public Holidays
There are 12 public holidays.
Sick Days
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 of salary from the allowance for 60 days (compulsory) and for the last 30 days, the difference payment is up to 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 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 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 allowance is covered by the government.
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 at the same time.
4th-12th month: Paid at 50% of the regular salary capped at 1.2 million KRW.
Other Leave
Work-Related Injury Leave – Employees receive 70% of their wages for up to three months.
Termination Process
Employees under “contract” or “regular employees” may only be terminated for “justifiable reason attributable” to the employee or “urgent managerial necessity” after the completion of the employee’s probationary period.
Justifiable Reason for Dismissal of an Employee in Korea
The Korean Labor Standards Act places the burden on the employer to prove a “justifiable reason to terminate.” According to the Korean Supreme Court, the reason must be “directly attributable to the employee.” Stealing, missing an excessive number of days of work, and violating laws related to the job, have all been deemed enough to terminate. Prior to termination, an attorney should be contacted to allow the company not to terminate an employee in violation of law.
Managerial Reasons for Laying off an Employee in Korea
The Korean Labor Standards Act places the burden on the employer to prove that an “urgent managerial necessity exists” before an employee is laid off. The Supreme Court has interpreted this to mean that a company should prove that without the layoff, the company would have extreme difficulty in maintaining operations. The standard is interpreted strictly.
Notice Period
Employers in South Korea must provide a 30-day notice before dismissing an employee. In some circumstances, employees are informed about their dismissal a year in advance. However, notice may not be required in the following cases:
- The employee commits any intentionally wrongful act that produces a damaging effect on the company’s business or operations.
- The employee is serving a probationary period of three months or less.
- The employee is paid monthly and has worked for less than six consecutive months.
Severance Pay
A full-time employee is entitled to receive severance pay equal to one month’s salary for each year of employment if they have worked for at least one year and they have worked for more than 15 hours per week or more than 60 hours per month.
Severance pay is to be paid within two weeks of termination regardless the reason of the termination.
Probation Period
Probation period can last a maximum of 3 months.
Working Hours
40 hours per week and 8 hours per day. The maximum number of working hours per week is 52.
Overtime
Anything over 40 hours per week, 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.
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