South Korea is one of Asia’s most advanced economies and a hub of innovation, technology, and global trade. Known for its world-leading industries in semiconductors, electronics, automotive, and biotechnology, South Korea also boasts a vibrant startup ecosystem driven by strong government support and high R&D investment.

The country offers a highly educated and skilled workforce, with one of the world’s highest rates of tertiary education. Cities like Seoul, Busan, and Incheon are key hubs for white-collar professionals, ranging from software engineers and data scientists to finance experts and life sciences specialists. English proficiency is improving, especially among younger professionals, making the workforce increasingly attractive for multinational employers.

However, South Korea’s labor market can be challenging for foreign companies. The Labor Standards Act strictly regulates working hours, contracts, and employee protections. Employers must also navigate complex social insurance contributions, payroll compliance, and tax reporting. Setting up a local subsidiary is bureaucratic and time-consuming, often taking several months.

Partnering with an Employer of Record (EOR) like Gloroots enables companies to:

• Hire employees in South Korea in days instead of months without opening a local entity.
• Ensure full compliance with the Labor Standards Act and social security obligations.
• Streamline payroll, tax filings, and benefits.
• Focus on scaling while Gloroots manages HR, compliance, and contracts.

What are the key facts about South Korea’s economy and workforce?

South Korea is the fourth-largest economy in Asia and the 13th-largest globally, with a GDP of over USD 2 trillion. It is a leader in advanced manufacturing, technology, and innovation, and a critical hub in global supply chains.

Economic Highlights

• Major Industries:
  • Electronics & Semiconductors: Samsung, SK Hynix, LG are global leaders.
  • Automotive: Hyundai, Kia, and Genesis anchor South Korea’s auto exports.
  • Shipbuilding & Heavy Industry: Hyundai Heavy Industries, Daewoo Shipbuilding.
  • Biotechnology & Pharma: Celltrion, Samsung Biologics, Hanmi Pharm.
  • Finance & IT Services: Seoul is Asia’s financial and fintech hub.
• R&D Powerhouse: South Korea invests over 4.5% of GDP in R&D, one of the highest globally.
• Global Trade: A top exporter of semiconductors, cars, ships, and electronics.
• Startup Ecosystem: Seoul is an innovation hub, supported by government programs like K-Startup Grand Challenge.

Workforce Characteristics

• Highly Educated: Over 70% of young adults have tertiary education, one of the highest OECD rates.
• STEM Strength: Strong emphasis on engineering, IT, and life sciences.
• Workforce Size: ~28 million employed individuals.
• Aging Demographics: Median age is ~44, with a shrinking youth workforce but strong graduate inflow.
• Languages: Korean is official; English proficiency is moderate, but improving, especially in tech and business roles.

South Korea’s combination of cutting-edge industries, skilled professionals, and global market connectivity makes it a strategic choice for multinational hiring.

Contact us to learn how Gloroots can help you access South Korea’s workforce.

What is the work culture and talent pool like in South Korea?

South Korea’s work culture is shaped by a mix of Confucian values, rapid modernization, and global business influence. Traditionally, workplaces have been hierarchical, with seniority and respect for authority playing a major role. However, in recent years, especially in technology, startups, and multinational companies, there has been a shift toward collaboration, agility, and merit-based recognition.

Employees are known for their discipline, technical skills, and strong work ethic, but younger professionals increasingly prioritize work-life balance and flexibility over rigid schedules. Remote and hybrid work models, once uncommon, are becoming more accepted in white-collar industries.

White-Collar Talent Strengths

• Technology & Engineering: Highly ranked globally in IT, electronics, and mechanical engineering.
• Life Sciences & Biotech: Rapidly expanding talent pool in pharma and medical research.
• Finance & Consulting: Seoul is a leading Asian hub for finance and professional services.
• Multilingual Services: Growing demand and availability of bilingual professionals (Korean-English, Korean-Chinese, Korean-Japanese).

Key Hiring Hubs in South Korea

• Seoul: Technology, finance, consulting, biotech, and startups.
• Busan: Shipping, logistics, and financial services.
• Incheon: Aviation, trade, and manufacturing.
• Daejeon: Science and technology research hub.
• Gwangju & Daegu: Automotive and heavy industries.

Workforce Snapshot – South Korea

Q: What is the process of setting up an entity in South Korea?

Establishing a legal entity in South Korea is possible for foreign companies but involves navigating a bureaucratic and documentation-heavy process. The most common structures are:

• Local Corporation (Chusik Hoesa or Yuhan Hoesa) – Similar to a limited liability company.
• Branch Office – An extension of a foreign company, limited to the parent’s scope of business.
• Liaison Office – Can conduct market research but cannot generate revenue.

Steps to Set Up an Entity in South Korea

1. Choose Entity Type – Decide between a subsidiary (more flexibility) or branch office (simpler but limited).
2. Company Name Registration – File with the Supreme Court Registry Office.
3. Articles of Incorporation – Draft and notarize.
4. Capital Deposit – Minimum capital for a local subsidiary is KRW 100 million (~USD 75,000) to qualify for certain visa sponsorships.
5. Business Registration – File with the Tax Office (within 20 days of incorporation).
6. Foreign Investment Registration (if applicable) – Required for foreign ownership under the Foreign Investment Promotion Act (FIPA).
7. Open Corporate Bank Account – Needed for salary and tax payments.
8. Social Security Registration – Register with the National Health Insurance Service (NHIS), National Pension Service (NPS), Employment Insurance, and Workers’ Compensation Insurance.

Timelines

• Entity incorporation typically takes 2–3 months.
• Additional time may be required for FIPA approval if foreign investment is involved.

Ongoing Compliance Requirements

• Monthly payroll filings with NHIS, NPS, Employment Insurance, and Tax Office.
• Corporate tax filings with the National Tax Service (NTS).
• Compliance with the Labor Standards Act and statutory severance obligations.

Entity Setup vs. Gloroots EOR in South Korea

Q: What are the key employment laws in South Korea that employers should know?

Employment in South Korea is regulated by the Labor Standards Act (LSA) and enforced by the Ministry of Employment and Labor. The law is highly protective of workers and sets clear rules for contracts, working time, leave, and termination. Employers must also consider mandatory social insurance schemes.

Key Employment Regulations

• Employment Contracts
  • Must be in writing, signed before work begins.
  • Must specify job duties, work hours, salary, holidays, and termination conditions.
  • Permanent contracts are the default; fixed-term contracts are capped at 2 years.
• Working Hours
  • Standard: 40 hours per week, 8 hours per day.
  • Overtime allowed up to 12 hours per week, subject to premium pay.
• Overtime Pay
  • Minimum 150% of regular wage.
  • 200% for night work (10pm–6am) or holidays.
• Minimum Wage (2025)
  • KRW 10,300 per hour (~USD 7.80).
  • Applies nationwide, adjusted annually.
• Annual Leave
  • 15 days after 1 year of service.
  • Increases to 25 days after 10 years.
• Public Holidays
  • 15 national holidays (including Lunar New Year, Chuseok, Independence Day).
• Sick Leave
  • No statutory paid sick leave. Many employers provide it voluntarily or via CBAs.
• Maternity Leave
  • 90 days (12 weeks) paid at 100% (employer + Employment Insurance).
  • At least 45 days must be postnatal.
• Paternity Leave
  • 10 days paid leave, funded by Employment Insurance.
• Parental Leave
  • Up to 1 year per parent, paid at 80% of salary (capped).
• Severance Pay
  • Mandatory: At least 30 days’ average wage per year of service, payable upon termination (regardless of reason).

Employment Law Snapshot – South Korea

Q: What are the key employment laws in South Korea that employers should know?

Employment in South Korea is regulated by the Labor Standards Act (LSA) and enforced by the Ministry of Employment and Labor. The law is highly protective of workers and sets clear rules for contracts, working time, leave, and termination. Employers must also consider mandatory social insurance schemes.

Key Employment Regulations

• Employment Contracts
  • Must be in writing, signed before work begins.
  • Must specify job duties, work hours, salary, holidays, and termination conditions.
  • Permanent contracts are the default; fixed-term contracts are capped at 2 years.
• Working Hours
  • Standard: 40 hours per week, 8 hours per day.
  • Overtime allowed up to 12 hours per week, subject to premium pay.
• Overtime Pay
  • Minimum 150% of regular wage.
  • 200% for night work (10pm–6am) or holidays.
• Minimum Wage (2025)
  • KRW 10,300 per hour (~USD 7.80).
  • Applies nationwide, adjusted annually.
• Annual Leave
  • 15 days after 1 year of service.
  • Increases to 25 days after 10 years.
• Public Holidays
  • 15 national holidays (including Lunar New Year, Chuseok, Independence Day).
• Sick Leave
  • No statutory paid sick leave. Many employers provide it voluntarily or via CBAs.
• Maternity Leave
  • 90 days (12 weeks) paid at 100% (employer + Employment Insurance).
  • At least 45 days must be postnatal.
• Paternity Leave
  • 10 days paid leave, funded by Employment Insurance.
• Parental Leave
  • Up to 1 year per parent, paid at 80% of salary (capped).
• Severance Pay
  • Mandatory: At least 30 days’ average wage per year of service, payable upon termination (regardless of reason).

Employment Law Snapshot – South Korea

How to hire Foreign Talent in South Korea?: Work Visas and Immigration

South Korea attracts global professionals, especially in technology, R&D, education, and finance. While the country has a large domestic talent pool, hiring foreign nationals requires navigating a structured immigration system managed by the Korean Immigration Service (KIS) under the Ministry of Justice.

Common Work Visa Options in South Korea

1. E-7 Visa (Special Occupation)
   • For skilled foreign professionals in designated fields such as IT, engineering, teaching, and finance.
   • Requires employer sponsorship and approval from the Ministry of Justice.
2. E-1 to E-6 Visas (Specialist Visas)
   • For professors, researchers, instructors, and other specialist roles.
3. D-8 Visa (Corporate Investment)
   • For foreign employees working at foreign-invested companies.
4. D-7 Visa (Intra-Company Transfer)
   • For employees transferred from overseas offices of multinational corporations.
5. E-9 Visa (Non-professional Employment)
   • For foreign workers in labor-intensive industries (not typically relevant for white-collar hiring).

Employer Responsibilities

• Sponsorship: Employer must obtain visa issuance approval before employee applies.
• Work Permit Registration: Register foreign employee with the Employment Center and Immigration Office.
• Social Security Enrollment: Mandatory registration with the National Pension Service (NPS), National Health Insurance Service (NHIS), Employment Insurance, and Industrial Accident Compensation Insurance.
• Residence Card: Employees must obtain an Alien Registration Card (ARC) within 90 days of arrival.

How Gloroots Simplifies Immigration in South Korea

Gloroots helps companies hire non-Korean talent by:

• Acting as the legal employer of record, enabling sponsorship of E-7 and other work visas.
• Handling visa issuance approval, Immigration filings, and ARC registrations.
• Managing social security enrollment (NPS, NHIS, Employment Insurance, Industrial Accident Insurance).
• Ensuring contracts and employment terms comply with the Labor Standards Act.
• Providing relocation support and onboarding assistance for smooth integration.

Result: You gain access to South Korea’s international talent pool while avoiding immigration bottlenecks and compliance risks.

Q: What are the risks of misclassification in South Korea?

In South Korea, the line between employees and independent contractors is closely monitored under the Labor Standards Act and enforced by the Ministry of Employment and Labor. Misclassification is a common compliance pitfall for foreign employers, especially in IT, consulting, and creative industries where companies prefer flexible contractor arrangements.

Authorities and courts apply a “subordination test” — looking at the actual work relationship rather than the contract label.

Criteria for Employee vs. Contractor Status

A worker is likely an employee if:

• The employer controls working hours, location, and method of work.
• The worker uses company-provided equipment.
• Compensation is a fixed salary, not per project.
• The worker is economically dependent on one client.
• The employer supervises or evaluates performance.

A true contractor should:

• Work independently with control over hours and tasks.
• Use their own tools and equipment.
• Invoice multiple clients.
• Bear financial risk and operate as a business entity.

Penalties for Misclassification in South Korea

• Reclassification: Contractors may be legally reclassified as employees.
• Back Payments: Employer liable for unpaid National Pension (NPS), National Health Insurance (NHIS), Employment Insurance, and Severance Pay.
• Employee Entitlements: Retroactive claims for annual leave, overtime, and parental leave.
• Fines & Sanctions: Employers may face administrative penalties and be ordered to reinstate workers.
• Reputational Risk: Investigations can lead to disputes and negative publicity.

Misclassification Risk Snapshot – South Korea

‍Use our Misclassification Risk Calculator to check your compliance exposure in South Korea.

Q: How does an EOR help you run payroll in South Korea?

Payroll in South Korea is highly regulated and requires strict compliance with the Labor Standards Act, National Tax Service (NTS), and the country’s four mandatory social insurance programs. Employers must calculate salaries, deductions, and contributions accurately each month, while also managing year-end reconciliations.

Payroll Compliance Requirements in South Korea

• Payroll Cycle
  • Salaries are paid monthly, typically on the 25th or last working day of the month.
  • Must include base salary, overtime, allowances, and bonuses.
• Mandatory Deductions
  • Income Tax (PIT): Withheld at source, progressive rates.
  • Local Income Tax: 10% of national income tax.
  • Employee Social Insurance: Includes NPS, NHIS, Employment Insurance.
• Employer Contributions
  Employers must contribute to four major social programs:
  • National Pension Service (NPS): 4.5% employer + 4.5% employee.
  • National Health Insurance (NHIS): ~3.5% employer + 3.5% employee (adjusted annually).
  • Employment Insurance: ~0.9% employer + 0.9% employee (rates vary by company size/industry).
  • Workers’ Compensation Insurance: Employer-only, rate depends on industry risk.
• Severance Pay Accruals
  • Employers must accrue severance (at least 30 days’ wages per year of service).
• Payslips
  • Employers must issue detailed payslips with salary, deductions, and contributions.
• Reporting
  • Monthly tax and social insurance filings with NTS and relevant agencies.
  • Annual year-end tax reconciliation for employees.

Risks of In-House Payroll

• Miscalculating social insurance rates or tax deductions can lead to penalties.
• Missing severance accruals is a common foreign employer mistake.
• Late or incorrect filings may trigger audits by the NTS or Ministry of Labor.

How Gloroots Simplifies Payroll in South Korea

As your Employer of Record, Gloroots ensures payroll is accurate, compliant, and on time:

• Salary Processing: Manages monthly payroll, including overtime and bonuses.
• Tax Withholding: Calculates and remits PIT and local income tax.
• Social Insurance Compliance: Registers employees with NPS, NHIS, Employment Insurance, and Workers’ Comp.
• Severance Management: Accrues and pays severance correctly.
• Payslips: Issues compliant payslips in Korean and English.
• Reporting: Handles monthly and annual filings with NTS and insurance bodies.

Result: Employees are paid correctly and on time, while employers avoid administrative and compliance risks.

Q: How does tax compliance work in South Korea?

Tax compliance in South Korea is regulated by the National Tax Service (NTS) and requires strict adherence to income tax rules, social insurance obligations, and corporate tax laws. Employers must calculate, withhold, and remit contributions accurately each month, as well as manage year-end filings.

Personal Income Tax (PIT) in South Korea – 2025

South Korea applies a progressive income tax system:

• Up to KRW 14 million → 6%
• KRW 14M – 50M → 15%
• KRW 50M – 88M → 24%
• KRW 88M – 150M → 35%
• KRW 150M – 300M → 38%
• KRW 300M – 500M → 40%
• KRW 500M – 1B → 42%
• Above KRW 1B → 45%

Additional: Local Income Tax = 10% of PIT (effective rates 6.6%–49.5%).

Foreign workers option: Eligible foreign employees may elect a 19% flat rate (20.9% effective with local tax) for up to 20 years from their first employment in Korea.

Social Security Contributions (Payroll Deductions)

South Korea requires enrollment in four mandatory social insurances:

• National Pension Service (NPS): 4.5% employer + 4.5% employee.
• National Health Insurance (NHIS): ~4.004% employer + 4.004% employee (includes long-term care levy).
• Employment Insurance: 0.9% employee; ~1.15%–1.75% employer (+0.25%–0.85% for stabilization/skills funds depending on sector).
• Workers’ Compensation Insurance: Employer-only; 0.56%–18.56% depending on industry risk.

Employers must also accrue severance pay equal to one month’s wages per year of service.

Corporate Income Tax (CIT) in South Korea

• National CIT: 9% / 19% / 21% / 24% by profit bands.
• Local CIT: Additional 0.9% / 1.9% / 2.1% / 2.4%.
• From 2026, brackets are expected to rise to 10% / 20% / 22% / 25% (pending final approval).

Employer vs. Employee Contributions

• Employer Pays:
  • 4.5% NPS
  • ~4.004% NHIS
  • ~1.15%–1.75% Employment Insurance (+0.25%–0.85% stabilization funds)
  • Workers’ Comp (risk-rated)
  • Withhold & remit PIT/local tax
  • Severance accruals
• Employee Pays (via payroll):
  • 4.5% NPS
  • ~4.004% NHIS
  • 0.9% Employment Insurance
  • Progressive PIT/local tax (or 19% flat option for foreigners)

Tax Compliance: Direct Entity vs. Gloroots EOR in South Korea

Q: What benefits and entitlements do employees in South Korea receive?

South Korea provides employees with a mix of statutory benefits under the Labor Standards Act and coverage under the country’s four mandatory social insurances. Employers often add supplemental perks to remain competitive in a talent-driven market.

Statutory Benefits

• Annual Leave
  • 15 days of paid leave after 1 year of service.
  • Increases by 1 day per 2 years of service up to a maximum of 25 days.
• Public Holidays
  • 15 national holidays (e.g., Seollal/Lunar New Year, Chuseok, Independence Day).
  • Many are paid holidays under the LSA.
• Maternity Leave
  • 90 days (12 weeks) fully paid, with at least 45 days postnatal.
  • Funded by employer and Employment Insurance.
• Paternity Leave
  • 10 days paid, reimbursed via Employment Insurance.
• Parental Leave
  • Up to 1 year per parent, reimbursed by Employment Insurance (up to 80% salary, capped).
• Sick Leave
  • No statutory paid sick leave. Employers may provide voluntarily or via CBAs.
• Severance Pay
  • Mandatory: At least 30 days’ average wages per year of service.
• Social Insurance Coverage
  • National Pension Service (NPS)
  • National Health Insurance (NHIS) (+ long-term care)
  • Employment Insurance
  • Workers’ Compensation Insurance

Common Additional Employer-Provided Benefits

• Private Health Insurance – Complements NHIS, common in white-collar roles.
• Meal & Transport Allowances – Often provided as cash or prepaid cards.
• Performance Bonuses – Widely used, especially in finance and IT.
• Housing Allowances – More common for expatriates.
• Flexible Work Options – Increasingly expected by younger professionals.
• Training & Education Support – Language classes, certifications, MBA sponsorships.

Employee Benefits Snapshot – South Korea

How Gloroots Helps

Gloroots ensures your South Korean workforce receives all statutory entitlements while helping you build competitive global benefits packages. From private insurance and allowances to equity and flexible work perks, Gloroots manages benefits seamlessly with payroll.

Q: What’s involved in hiring and onboarding employees in South Korea?

Hiring in South Korea requires strict compliance with the Labor Standards Act (LSA) and prompt registration with social insurance schemes. Foreign companies without a local entity must partner with an Employer of Record (EOR) like Gloroots to hire employees legally.

Steps for Hiring and Onboarding Employees in South Korea

1. Employment Contract
   • Must be in writing and in Korean (can include bilingual versions).
   • Should outline: role, salary, working hours, leave entitlements, and termination conditions.
   • Permanent contracts are the norm; fixed-term contracts limited to 2 years.
2. Probation Periods
   • Common but not mandatory.
   • Typically 3–6 months, with reduced notice obligations during probation.
3. Mandatory Registrations
   • Employer must register the employee with:
     • National Pension Service (NPS)
     • National Health Insurance Service (NHIS)
     • Employment Insurance
     • Workers’ Compensation Insurance
   • Must be completed within 14 days of employment start.
4. Onboarding Obligations
   • Provide orientation on company policies and compliance with Korean workplace laws.
   • Occupational health & safety training may be required depending on role/industry.
   • Assign company equipment (laptop, phone, access cards).
5. Payroll Setup
   • Register employee with the National Tax Service (NTS) for income tax withholding.
   • Ensure severance accrual begins from day one.

Hiring & Onboarding: Direct Entity vs. Gloroots EOR in South Korea

How Gloroots Simplifies Onboarding in South Korea

• Drafts bilingual employment contracts.
• Registers employees with social insurances and tax authorities.
• Manages payroll, severance accruals, and benefits integration.
• Provides devices (laptops, mobiles) for EOR employees when required.
• Delivers a smooth and compliant onboarding experience.

Q: How do you successfully manage a workforce in South Korea?

Managing employees in South Korea requires balancing compliance with strict labor laws and adapting to cultural expectations. The workforce is highly skilled and disciplined, but management styles must align with local norms around hierarchy, communication, and work-life balance.

Key Considerations for Workforce Management

1. Compliance with the Labor Standards Act (LSA)
   • Employers must track working hours (capped at 52 hours/week, including overtime).
   • Maintain accurate payroll, leave, and severance records.
   • Provide equal opportunity and non-discrimination protections.
2. Workplace Culture
   • Traditionally hierarchical, with respect for seniority and formal communication.
   • Increasingly shifting toward collaborative, flexible, and innovation-driven cultures in startups and multinational firms.
   • Employees value clear direction but also respect for work-life balance, especially among younger professionals.
3. Benefits & Retention
   • Beyond statutory benefits, employees expect meal allowances, private health insurance, performance bonuses, and training opportunities.
   • Flexible and hybrid work options are becoming increasingly important.
4. Performance Management
   • Employees appreciate structured feedback, regular evaluations, and visible career progression paths.
   • Investment in language training, IT certifications, and leadership development helps retain top talent.
5. Employee Relations
   • Unions are active in South Korea, especially in manufacturing, transport, and public services.
   • Employers must respect collective agreements and consultation rights.

How Gloroots Supports Workforce Management in South Korea

Gloroots helps you manage your South Korean workforce effectively by:

• Ensuring compliance with the LSA, CBAs, and social insurance rules.
• Handling payroll, severance accruals, and benefits administration.
• Offering curated global benefits to attract and retain employees.
• Providing devices (laptops, mobiles) to EOR employees for hybrid/remote work setups.
• Acting as a local HR partner, ensuring smooth communication and employee engagement.

Result: With Gloroots, you get the benefits of South Korea’s world-class workforce without the compliance burden.

Q: What are the key steps and requirements in terminating employees in South Korea?

Termination in South Korea is highly regulated under the Labor Standards Act (LSA), which provides strong employee protections. Dismissals must be based on just cause, follow due process, and include statutory severance payments. Mishandling termination can lead to disputes, reinstatement orders, or financial penalties.

Grounds for Termination

• Just Cause: Permissible for serious misconduct, poor performance, or business reasons (redundancy).
• Advance Notice Required: Employers must give at least 30 days’ notice or pay in lieu.
• Prohibited Dismissals: Employees cannot be terminated during maternity leave, industrial injury treatment, or without justifiable reason.

Severance Pay

• Mandatory under the Retirement Benefits Act.
• Employees with ≥1 year of service are entitled to 30 days’ average wage per year of service.
• Severance is payable regardless of termination reason (except in cases of resignation before 1 year).

Probationary Periods

• Allowed and commonly used.
• Terminations during probation are easier but still require objective justification and 30-day notice (or pay in lieu).

Termination Snapshot – South Korea

How Gloroots Supports Terminations in South Korea

• Ensures dismissals meet LSA standards for just cause and notice.
• Calculates and administers severance pay correctly.
• Prepares compliant termination documentation to reduce litigation risks.
• Manages final payroll, including unused leave and allowances.
• Provides HR guidance to ensure respectful and legally sound exits.

Result: With Gloroots as your EOR, terminations in South Korea are handled smoothly, compliantly, and with minimal risk.

Q: What is the offboarding process in South Korea?

Offboarding in South Korea is a structured, compliance-driven process that requires careful handling of payroll, severance, and deregistrations. Employers must follow the Labor Standards Act (LSA) and ensure employees receive all statutory entitlements at the end of employment.

Key Steps in Offboarding Employees in South Korea

1. Formal Termination Notice
   • Provide written notice at least 30 days in advance, or pay salary in lieu.
   • Termination must be based on just cause or mutual agreement.
2. Final Payroll Settlement
   • Pay all outstanding wages up to termination date.
   • Compensate for unused annual leave.
   • Pay statutory severance (1 month’s average wage per year of service for employees with ≥1 year of service).
3. Social Insurance Deregistration
   • Deregister the employee from:
     • National Pension Service (NPS)
     • National Health Insurance Service (NHIS)
     • Employment Insurance
     • Workers’ Compensation Insurance
4. Tax Filings
   • Submit final income tax withholding to the National Tax Service (NTS).
   • Issue an annual tax certificate to the employee.
5. Exit Documentation
   • Provide a certificate of employment upon request.
   • Confirm severance calculation details.
6. Company Assets and Handover
   • Collect laptops, phones, access cards, and other assets.
   • Ensure secure data return and proper knowledge transfer.
7. Optional Offboarding Support
   • Exit interviews and outplacement programs are not mandatory but recommended for maintaining employer brand.

How Gloroots Simplifies Offboarding in South Korea

• Ensures compliance with notice, severance, and final payroll requirements.
• Files deregistration with NPS, NHIS, Employment Insurance, and Workers’ Comp.
• Manages final tax filings with the NTS.
• Collects company assets and ensures secure data handover.
• Provides employees with required documentation and supports a smooth exit process.

Result: With Gloroots as your EOR, offboarding in South Korea is legally compliant, efficient, and employee-friendly.

Q: What costs and financial planning do you need with an Employer of Record in South Korea?

Hiring in South Korea involves more than just paying salaries. Employers must budget for mandatory contributions, severance accruals, and statutory allowances. The total cost of employment (TCE) is typically 25–35% higher than the base salary, depending on benefits and industry.

Key Employment Cost Components in South Korea

1. Base Salary
   • Salaries in South Korea vary by role and experience.
   • Example (2025 averages):
     • Software Engineer: KRW 55M–80M (~USD 42,000–61,000).
     • Finance Analyst: KRW 45M–65M (~USD 34,000–49,000).
     • Marketing Specialist: KRW 40M–60M (~USD 30,000–46,000).
2. Employer Social Contributions
   • National Pension Service (NPS): 4.5%
   • National Health Insurance (NHIS): ~4.004%
   • Employment Insurance: ~1.15%–1.75% (plus stabilization/skills funds)
   • Workers’ Compensation Insurance: 0.56%–18.56% (industry risk-based)
3. Employee Contributions (withheld at source)
   • NPS: 4.5%
   • NHIS: ~4.004%
   • Employment Insurance: 0.9%
   • Income Tax: Progressive (6%–45% + local surtax)
4. Statutory Severance
   • Employers must accrue at least 1 month’s average wages per year of service.
5. Paid Leave & Holidays
   • 15–25 days annual leave, 15 national holidays.
   • Employers must cover leave costs.
6. Additional Benefits (Common but not Mandatory)
   • Private health insurance, meal/transport allowances, performance bonuses, housing stipends (common for expats).

How Gloroots Optimizes Cost Planning

With Gloroots as your Employer of Record:

• You pay a transparent monthly service fee on top of employee salaries.
• All statutory contributions (NPS, NHIS, Employment Insurance, Workers’ Comp) are managed within payroll.
• Severance accruals are handled correctly from day one.
• Competitive employee benefits packages are designed without overinflating costs.
• Budgeting is simplified with predictable monthly invoicing.

Cost Comparison: Own Entity vs. Gloroots EOR in South Korea

Q: What challenges might you face, and how do you solve them using an EOR in South Korea?

South Korea offers a highly skilled, innovative, and tech-savvy workforce, but employers often face legal, cultural, and administrative challenges when entering the market. Without local expertise, compliance risks and bureaucratic delays can slow expansion.

Key Hiring Challenges in South Korea

1. Complex Employment Laws
   • Strictly regulated by the Labor Standards Act (LSA).
   • Overtime, severance, and leave entitlements are tightly enforced.
   • Challenge: Foreign employers risk penalties for non-compliance.
2. High Social Insurance Obligations
   • Employers must contribute to NPS, NHIS, Employment Insurance, and Workers’ Comp.
   • Challenge: Contribution rates vary by industry and are often misunderstood by foreign companies.
3. Severance Requirements
   • Employers must accrue at least 30 days’ wages per year of service.
   • Challenge: Many global employers fail to budget for this, leading to financial strain at termination.
4. Entity Setup Delays
   • Establishing a subsidiary takes 2–3 months, plus capital requirements.
   • Challenge: Market entry delayed, missing out on talent opportunities.
5. Cultural Differences
   • Hierarchical structures, indirect communication, and work-life balance expectations can be challenging for foreign managers.
   • Challenge: Misalignment with local workplace culture may impact retention.

How Gloroots Solves These Challenges

Gloroots acts as your Employer of Record in South Korea, handling compliance and HR operations:

• Full Compliance: Ensures adherence to the LSA, payroll, and social insurance laws.
• Payroll & Benefits Management: Automates deductions and contributions for NPS, NHIS, EI, and Workers’ Comp.
• Severance Planning: Accrues and pays statutory severance correctly.
• Faster Market Entry: Hire in 2–5 days without entity setup.
• Cultural Alignment: Provides local HR expertise to support retention and engagement.

Challenge vs. Solution: Direct Entity vs. Gloroots EOR

Conclusion

South Korea is a strategic hub for innovation and global business, offering a highly educated workforce and world-class industries in technology, semiconductors, automotive, and life sciences. However, hiring in Korea requires navigating strict labor laws, social insurance obligations, and severance rules, as well as adapting to a unique work culture.

With Gloroots as your Employer of Record in South Korea, you can:

• Hire employees in 2–5 days without opening a local entity.
• Stay compliant with the Labor Standards Act and social insurance regulations.
• Offer competitive employee benefits tailored to local market expectations.
• Simplify payroll management, severance accruals, and tax filings.
• Focus on scaling while Gloroots manages compliance and HR complexity.

Gloroots makes hiring in South Korea simple, compliant, and fast.

Start hiring in South Korea today.