Guide to Hiring in South Korea

Overview

South Korea, officially known as the Republic of Korea (ROK), is an East Asian country located in the southern portion of the Korean Peninsula. It is one of the world's most advanced economies and ranks among the leading countries in innovation, technology, manufacturing, and digital infrastructure.

As of 2026, South Korea has a Human Development Index (HDI) of 0.937, ranking 20th globally according to the United Nations Development Programme (UNDP). The country's nominal GDP is estimated at approximately US$1.93 trillion, making it the 15th-largest economy in the world.

Since the beginning of the 21st century, South Korea has become a major global cultural influence through the worldwide success of Korean popular culture, including K-pop, film, television, and digital entertainment. Beyond its cultural impact, South Korea remains one of the most influential economies in Asia, making it an attractive destination for international investment and business expansion.

South Korea has a population of approximately 51.6 million people. Its labour force comprises around 29.6 million people, with approximately 28.8 million employed workers. Key industries include electronics, semiconductors, automobiles, telecommunications, shipbuilding, steel, chemicals, biotechnology, and advanced manufacturing.

South Korea's strong position in regional and global markets, highly educated workforce, advanced infrastructure, and innovation-driven economy make it an attractive location for companies seeking to establish or expand operations.

Corporate Income Tax (CIT)

South Korea taxes resident corporations on worldwide income and non-resident corporations with a permanent establishment on Korean-source income attributable to that establishment.

Corporate Income Tax Rates (effective for fiscal years beginning on or after 1 January 2026):

• Up to KRW 200 million: 10%

• KRW 200 million – KRW 20 billion: 20%

• KRW 20 billion – KRW 300 billion: 22%

• Over KRW 300 billion: 25%

Note: These rates were reinstated from 1 January 2026 following the reversal of the 2022 corporate tax reduction.

Local Income Tax

In addition to corporate income tax, a separate local income tax applies:

• Up to KRW 200 million: 1.0%

• KRW 200 million – KRW 20 billion: 2.0%

• KRW 20 billion – KRW 300 billion: 2.2%

• Over KRW 300 billion: 2.5%

Alternative Minimum Tax

For SMEs:

• 7% of the tax base before certain deductions and credits, or

• Actual corporate tax liability after deductions and credits,

• Whichever is greater.

For non-SMEs:

• 10% on tax base up to KRW 10 billion

• 12% on tax base exceeding KRW 10 billion up to KRW 100 billion

• 17% on tax base exceeding KRW 100 billion

Former SME transition rules:

• 7% for the first 6 years after losing SME status

• 7% for the first 8 years if listed on KOSPI or KOSDAQ

• 8% for the following 3 years

• 9% for the subsequent 2 years

Global Minimum Tax (Pillar Two)

South Korea has implemented the OECD Pillar Two framework:

• Income Inclusion Rule (IIR): effective from 1 January 2024

• Undertaxed Profits Rule (UTPR): effective from 1 January 2025

• Domestic Minimum Top-up Tax (DMTT/QDMTT): effective from 1 January 2026

These rules generally apply to multinational enterprise groups with consolidated annual revenue exceeding EUR 750 million.

Additional Tax on Retained Earnings

Certain large domestic conglomerates may be subject to:

• 20% additional tax on excess corporate earnings reserves

• Currently applicable through 31 December 2028

Value Added Tax (VAT)

• Standard VAT rate: 10%

• Exports of goods and certain international services: 0% (zero-rated)

VAT-exempt supplies include:

• Unprocessed agricultural products

• Healthcare services

• Certain educational services

• Government transactions

• Other specifically exempt transactions under Korean tax law

Individual Income Tax and Expatriate Flat Tax

South Korea distinguishes between resident and non-resident taxpayers.

Residents:

• Taxed on worldwide income

Non-residents:

• Generally taxed only on Korean-source income

Tax residency is generally established by:

• Having a domicile in Korea, or

• Spending 183 days or more in Korea during a tax year

Personal Income Tax Rates

• Up to KRW 12 million: 6%

• KRW 12 million – KRW 46 million: 15%

• KRW 46 million – KRW 88 million: 24%

• KRW 88 million – KRW 150 million: 35%

• KRW 150 million – KRW 300 million: 38%

• KRW 300 million – KRW 500 million: 40%

• KRW 500 million – KRW 1 billion: 42%

• Over KRW 1 billion: 45%

Additional local income tax:

• Equal to 10% of the national income tax liability

• Effective top marginal rate: approximately 49.5%

Expatriate Flat Tax Regime

Eligible foreign employees may elect a flat tax regime instead of the progressive rates above.

• National flat tax rate: 19%

• Effective rate including local income tax: approximately 20.9%

• Available for up to 20 years from the date the employee first begins working in South Korea

• Must be elected in accordance with applicable tax rules

Social Security

South Korea's social security system consists of:

• National Pension (NP)

• National Health Insurance (NHI)

• Long-Term Care Insurance (LTCI)

• Employment Insurance (EI)

• Workers' Compensation Insurance (WCI)

National Pension (NP)

Contribution rates:

• Employee: 4.75%

• Employer: 4.75%

• Total: 9.5%

Contribution cap:

• Monthly salary ceiling: KRW 6,590,000 (effective from July 2026)

Maximum employee contribution:

• KRW 302,570 (January–June 2026)
• KRW 313,025 (July 2026–June 2027)

Foreign workers:

• Participation is generally mandatory unless an exemption applies under a social security agreement between South Korea and the employee's home country.

National Health Insurance (NHI)

Contribution rates:

• Employee: 3.595%

• Employer: 3.595%

• Total: 7.19%

Foreign workers:

• Mandatory for most foreign employees earning employment income in South Korea
• Exemptions may apply where qualifying overseas coverage exists and supporting documentation is submitted

Long-Term Care Insurance (LTCI)

Additional contribution collected alongside NHI.

Contribution rates:

• Employee: 0.4724%

• Employer: 0.4724%

• Total: 0.9448%

Combined NHI + LTCI cost:

• Total: approximately 8.135%

• Employee share: approximately 4.0674%

• Employer share: approximately 4.0674%

Employment Insurance (EI)

Employee contribution:

• 0.90%

Employer contribution:

• 1.15% – 1.75%

• Depends on company size and employment stabilization/vocational training obligations

Foreign workers:

• Participation depends on visa category and reciprocity arrangements

• Generally mandatory for holders of D-7, D-8 and D-9 visas

• Certain exemptions may apply

Workers' Compensation Insurance (WCI)

Employee contribution:

• 0%

Employer contribution:

• Approximately 0.56% – 18.56% of payroll

• Varies by industry and occupational risk level

Responsibility:

• Fully funded by the employer
• Covers work-related injuries, illnesses and occupational accidents.

Minimum wage

The statutory minimum wage in South Korea is KRW 10,320 per hour as of 1 January 2026. Based on the standard monthly calculation of 209 working hours, this equates to a minimum monthly wage of KRW 2,156,880. 

Working hours

Under South Korea's Labour Standards Act, the standard working time is eight hours per day and 40 hours per week. Employees may work up to 12 additional hours of overtime per week, resulting in a maximum working time of 52 hours per week. This 52-hour limit remains the statutory cap in 2026 and applies to most employers and employees covered by the Labour Standards Act.

South Korea has made significant efforts in recent years to reduce excessive working hours and improve work-life balance. According to the latest OECD data, employees in South Korea worked an average of approximately 1,833 hours per year in 2025, remaining above the OECD average but continuing a long-term downward trend.

Overtime

Employees are generally entitled to overtime pay for hours worked beyond their standard working schedule. Overtime work is compensated at 150% of the employee's ordinary wage, reflecting a 50% premium above the normal hourly rate.

The same 50% premium also applies to night work performed between 10:00 p.m. and 6:00 a.m. and to certain types of holiday work. Where holiday work exceeds eight hours, higher premium rates may apply in accordance with Korean labour law. Employers should ensure overtime, night work, and holiday work are properly recorded and compensated to maintain compliance with employment regulations.

Working Hours Flexibility and Future Reforms

South Korea continues to explore measures aimed at improving work-life balance and increasing workplace flexibility. While proposals to expand weekly working-hour limits were previously discussed, the current legal limit remains 52 hours per week, and no legislation has been enacted to increase this cap.

The government has also begun examining shorter working-week models through pilot programmes and policy initiatives. As part of broader labour market reforms, discussions around a 4.5-day workweek and other flexible working arrangements have gained momentum, with some organisations already testing alternative work schedules. Although these initiatives do not currently alter statutory working-hour limits, they reflect an ongoing shift towards greater flexibility and employee wellbeing in the South Korean workplace.

Employee benefits

In South Korea there are several laws in place for the government to protect workers rights and maintain a healthy relationship between employers and employees. The most important one is The Labour Standards Act (LSA), which contains the mandatory benefits for workers and also the employers' obligation that companies need to incorporate to start hiring. As mentioned earlier, minimum wage and working hours limits are some of them. Other mandatory benefits include: 

• Annual leave
• Sick leave
• Maternity leave
• Paternity leave
• Parental leave
• Fertility treatment leave
• Protection against unfair contract termination
• National pension
• National health insurance
• Insurances specific for field of action
• Accident compensation insurance
• Long-term care insurance

Types of leave available

South Korean employment law provides a range of statutory leave entitlements designed to support employee wellbeing, family responsibilities, and work-life balance. The primary leave categories include annual leave, sick leave, maternity leave, paternity leave, parental leave, and public holidays.

Annual Leave

Employees are entitled to paid annual leave under the Labour Standards Act. During their first year of employment, employees accrue one day of paid leave for each month worked, up to a maximum of 11 days. After completing one year of service and meeting the required attendance criteria, employees are entitled to 15 days of paid annual leave per year.

To reward long-term service, employees receive one additional day of annual leave for every two years of continuous employment, up to a statutory maximum of 25 days per year.

Public Holidays

South Korea observes a number of national public holidays throughout the year, including:

• 1 January – New Year's Day

• 16–18 February – Seollal (Lunar New Year)

• 1 March – Independence Movement Day

• 1 May – Labour Day

• 5 May – Children's Day

• 24 May – Buddha's Birthday

• 6 June – Memorial Day

• 15 August – Liberation Day

• 24–26 September – Chuseok (Korean Thanksgiving)

• 3 October – National Foundation Day

• 9 October – Hangeul Day

• 25 December – Christmas Day

South Korea also operates a substitute holiday system. When certain public holidays fall on a weekend or overlap with other designated holidays, employees may receive an additional weekday off in lieu of the holiday.

Sick Leave

There is currently no statutory requirement for employers to provide paid sick leave for non-work-related illness or injury in South Korea. However, many employers voluntarily offer paid sick leave through company policies, collective agreements, or employment contracts.

Employees who suffer a work-related illness or injury may be entitled to compensation and benefits through the Workers' Compensation Insurance (WCI) system. South Korea has also introduced pilot programmes exploring broader statutory sick-pay arrangements, although these have not yet been implemented nationwide.

Maternity Leave

Employees who give birth are entitled to 90 days of maternity leave, with a portion of the leave required to be taken after childbirth. For premature births and certain high-risk situations, extended leave entitlements may apply.

Maternity leave benefits are supported through South Korea's employment insurance system, subject to applicable eligibility requirements and payment limits. As of 2026, the maximum government-supported maternity leave benefit is KRW 2.2 million per month.

Under the Infant Care Act, employers with 500 or more employees, or 300 or more female employees, may be required to establish workplace childcare facilities or implement alternative childcare support measures.

Paternity Leave

Eligible employees are entitled to 20 days of paid paternity leave following the birth of a child. This leave may be taken in up to three separate periods, providing greater flexibility for new parents during the early stages of childcare.

Parental Leave

Parents are entitled to take statutory parental leave to care for young children. Eligible employees may take up to 18 months of parental leave, which can be divided into up to four separate periods.

Additional leave benefits may be available where both parents participate in the parental leave system. Eligibility has also been expanded to cover parents of children up to 12 years old or sixth grade in elementary school, whichever comes first.

Fertility Treatment Leave

Employees undergoing fertility treatment are entitled to six days of leave per year, including two paid days, to attend medical appointments and treatment related to infertility care. This entitlement is intended to support employees balancing family planning with their professional responsibilities. 

Attracting talent

A healthy retirement plan is valued as one of the top benefits that can be provided by an employer. To offer a discretionary retirement contribution on top of what is already mandatory is seen with good eyes and can in fact attract the top talent in South Korea.

Extra benefits are also a way to attract top talent. Not only the salary but also other things are really important to create a commitment to the job, such as building a good and healthy work environment, a cooperative culture, leadership development programs, financial incentives for studies and more.

Healthy work environment and cooperative culture

This is always a good one. Healthy and cooperative work environments are key to attracting and retaining the best work talent. Not only makes life at work easier but also people feel that they belong and are heard and this leads to the overall happiness of the workforce.

As a matter of fact, research by Oxford University's Saïd Business School stated that happy workers are, on average, 13% more productive. 

Leadership development programs

A good way to keep workers interested and focused on building their future within the company is the creation of internal development programs. That makes people feel appreciated and more prepared for leadership positions.

According to the Global Leadership Forecast of 2021, only 28% of HR professionals believe that their companies have high-quality leadership. That shows how critical it is to develop better leaders at all levels inside a business. This is to say that leadership courses are a great way to stand out among other companies while attracting and retaining the best talent possible.

Financial incentives for studies

This one is very straightforward. To keep the workforce engaged, it is good to offer financial incentives for workers to study and continue to grow in their field of action. Research co-authored by Bayes Business School showed that one in four workers are considering leaving their job in the next 12 months, and 34% said that it's to them the feeling of not being valued by their companies. 

This study also revealed that productivity is not only boosted when workers believe that their efforts will enhance rewards in the future but also because they feel they’re appreciated by the organisations. Financial incentives for education are a way for companies to invest in their top talent and can include postgraduate, extension and even language courses.

Termination of employment

Termination of employment is a highly regulated area of South Korean labour law. Under the Labour Standards Act, an employer may only dismiss an employee where there is a justifiable reason, such as serious misconduct, poor performance that has been properly documented and managed, or an urgent managerial necessity. The burden of proving that a dismissal is justified rests with the employer.

Employers are generally required to provide employees with at least 30 days' notice of termination or 30 days' pay in lieu of notice. Failure to meet these requirements may expose an employer to legal claims and financial penalties. In cases involving collective redundancies due to urgent business necessity, employers must follow additional procedures, including advance consultation with employee representatives or trade unions and notification requirements under Korean labour law.

Severance Pay

Employees who have completed at least one year of continuous service are generally entitled to statutory severance pay upon termination of employment. The minimum entitlement is equivalent to one month's average wage for each year of service.

Employers may provide this benefit through a traditional severance payment arrangement or through a registered retirement pension plan, such as a defined benefit (DB), defined contribution (DC), or individual retirement pension (IRP) scheme, in accordance with the Employee Retirement Benefit Security Act.

Unfair Dismissal Protections

Employees who believe they have been unfairly dismissed may file a claim with the Labour Relations Commission. Claims generally must be submitted within three months of the dismissal. If a dismissal is found to be unjustified, remedies may include reinstatement, back pay, or other corrective measures.

Given South Korea's strong employee protections and detailed procedural requirements, employers should ensure that all disciplinary and termination processes are carefully documented and compliant with local labour laws.

Labour Relations Developments

South Korea continues to review and modernise its labour relations framework. Recent amendments to the Trade Union and Labor Relations Adjustment Act have expanded certain protections relating to industrial disputes and collective labour relations. Employers should monitor legislative developments and seek local legal advice when managing complex workforce restructurings, collective bargaining matters, or dismissals involving trade unions.

What are my options for hiring?

If you’re looking to expand your company to South Korea, Airswift can help! 

We can provide employment solutions for you to stay in compliance with local requirements of payroll, taxes, working hours, termination procedures and many other needs.

Our teams have the expertise you need to protect your business from unnecessary risk, freeing up time and resources to focus your company’s demands, prospects and international growth.

Talent acquisition

We can help you source and deliver the people you need across a wide variety of sectors by using our extensive network of employees in South Korea.

We're here to help you find a contractor who fits your needs. If you're looking for someone to fill a short term role, we offer flexible contracts that fit into your busy schedule.

Finally, if you're looking to hire people who can grow with your company, we have professional search services that provide access to highly qualified workers who are ready for work. We also handle everything from shortlisting potential employees to screening and hiring them.

Employer of record

For businesses that want to hire people remotely without having to set up a physical office, an Employer of record (EoR) makes it easy for them to do so with minimal compromises on time and expenses.

An employer of record allows you to skip the hassle of setting up an actual company structure and focus on growing your own business instead. An EOR can assist you with tasks including overseeing locally compliant payroll and administering statutory benefit schemes.

*Although the information provided has been produced from sources believed to be reliable, no warranty, express or implied, is made regarding the accuracy, adequacy, completeness, legality or reliability of any information. For the latest information and specific queries regarding particular cases, please contact our team.