How to Hire Employees in South Korea
Hire employees in South Korea without setting up a local entity. Gloroots manages payroll in KRW, all four statutory contributions, and Labour Standards Act compliance, so you can onboard in weeks. Start hiring in South Korea today.
Begin your Journey with Gloroots
Schedule a call with our solution expert
- An Employer of Record (EOR) is the fastest compliant route to hire in South Korea without a local entity.
- Total employer social insurance contributions range from approximately 9% to 12% of salary.
- Termination requires 30 days' notice or pay in lieu of notice.
- The 2026 minimum hourly wage is KRW 10,320.
- Employees are entitled to statutory severance after one year of continuous service.
Hiring in South Korea requires written employment contracts, registration with all four social insurance programs, and full compliance with the Labour Standards Act.
Foreign employers face strict worker classification rules, a 52-hour weekly working cap, and mandatory severance obligations after one year of service. These requirements add meaningful compliance complexity for companies without a local entity.
This guide covers hiring models, employment contracts, payroll, taxes, social insurance, onboarding, and termination requirements for foreign employers operating in South Korea.
Gloroots operates as a Global Employer of Record and global employment platform. It employs workers on behalf of international companies, managing contracts, payroll, statutory filings, and compliance under South Korean law.
Job Market and Hiring Trends in South Korea
South Korea's ICT and semiconductor sectors drove record export growth in 2024, with chip exports exceeding USD 130 billion, according to the Korea Customs Service.
Engineering, AI, and semiconductor design roles remain difficult to fill despite South Korea's highly educated and technically skilled workforce.
- South Korea ranked 19th in the IMD World Competitiveness Yearbook 2024, reflecting strong institutional and economic fundamentals.
- IT and software employment grew 6.2% year-on-year in 2023, according to Statistics Korea.
- The semiconductor industry employs over 300,000 workers, with a projected shortfall of 50,000 skilled workers by 2030 (Ministry of Trade, Industry and Energy, 2023).
- Youth unemployment stood at 5.9% in Q1 2025, per Statistics Korea.
- South Korea's K-Digital Training programme upskilled more than 50,000 workers in AI and cloud technologies in 2023.
Your Options for Hiring in South Korea: Entity vs. EOR vs. Contractor
Foreign companies entering South Korea can choose three paths: entity setup, employer of record, or contractor engagement. The right choice depends on timeline, budget, risk tolerance, and how permanent the South Korean operation will be.
Entity setup requires a minimum investment of KRW 100 million and full local compliance infrastructure, including payroll registration, tax filings, and labour law management.
Contractor engagement suits short-term projects but carries high misclassification risk. Korean courts apply a substance-over-form test that can override any contract label.
| Path | Setup Time | Cost | Compliance Burden | Best For |
|---|---|---|---|---|
| Entity | 2 to 4 months | High | Full, direct | Long-term, large-scale operations |
| EOR | Days to weeks | Predictable monthly fee | Outsourced to EOR | Controlled market entry without an entity |
| Contractor | Immediate | Low upfront | Low initially, high if reclassified | Short-term, project-based work |
Foreign companies should also consider permanent establishment risk. Under South Korea's Corporate Tax Act, employees providing services in South Korea for six or more months in a 12-month period may trigger a permanent establishment obligation for the foreign company. In those cases, entity setup or an how does EOR work arrangement is essential to manage that exposure correctly.
Employees vs. Contractors in South Korea
Misclassification risk in South Korea is high. Korean courts apply a substance-over-form test regardless of what the contract states.
South Korea's practical classification test examines several factors: control over work schedule, the degree of supervision, economic dependence on a single employer, and whether the worker is integrated into the employer's core business operations.
| Factor | Employee | Contractor |
|---|---|---|
| Control | Employer sets schedule, methods, and location | Worker controls how and when work is done |
| Benefits and social security | Entitled to National Pension, Health Insurance, Employment Insurance, and Workers' Compensation | Not entitled to statutory benefits |
| Taxation | Income tax withheld at source by employer | Worker files and pays taxes independently |
| Contractual agreement | Written employment contract required under the Labour Standards Act | Service or project agreement |
| Exclusivity | Typically works exclusively for one employer | May work for multiple clients simultaneously |
A worker who meets the employee criteria under this test will likely be reclassified by a court, regardless of the contractor label in the agreement. Reclassification results in retroactive payment of statutory benefits and potential penalties.
Cost to Hire an Employee in South Korea
Total employment cost in South Korea equals gross salary plus mandatory employer contributions across four statutory insurance programs.
Employer contribution rates vary by industry risk classification for Workers' Compensation Insurance and by payroll size for Employment Insurance surcharges. Understanding the full cost structure matters before committing to a hiring model. For a broader view of how these costs compare across hiring structures, see employer of record cost.
| Contribution | Employer Rate | Employee Rate | Notes |
|---|---|---|---|
| National Pension | 4.50% | 4.50% | Monthly salary cap: KRW 6,590,000 effective July 2026; max monthly employee contribution KRW 313,025 from July 2026 |
| National Health Insurance | ~3.545% | ~3.545% | NHI and Long-Term Care combined rate ~8.135% as of January 2026; monthly cap KRW 10,390,220 |
| Long-Term Care Insurance | ~0.459% | ~0.46% | Calculated as a percentage of NHI contribution |
| Employment Insurance (base) | 0.90% | 0.90% | Applied to all insured employees |
| Employment Insurance (employer surcharge) | 0.25%–0.85% | None | Rate varies by payroll size |
| Workers' Compensation Insurance | 0.70%–18.60% | None | Rate set by industry risk classification |
| Resident Tax | 0.50% | None | Employer-only contribution |
The 2026 minimum monthly wage is KRW 2,156,880 before tax, based on a standard 40-hour work week. Employers must budget above this floor for most professional roles.
Compliance Risks While Hiring in South Korea
Non-compliance with South Korean labour law triggers penalties, audits, and potential criminal charges for responsible managers.
- Worker misclassification: Retroactive reclassification requires back-payment of all four social insurance programs. Responsible managers may face criminal liability under the Labour Standards Act.
- Payroll errors: All contributions must be remitted by the 10th of the following month. Late remittance incurs statutory surcharges on the outstanding amount.
- Contract non-compliance: Employment contracts missing mandatory terms covering wages, working hours, leave, and termination conditions void employer protections in disputes.
- Termination without just cause: The Labour Relations Commission can order reinstatement and award back-pay to employees dismissed without a justifiable reason.
- Permanent establishment risk: An unregistered foreign employer with employees working in South Korea for six or more months may face Korean corporate tax on profits attributable to those activities.
- Personal Information Protection Act violations: Improper handling of employee personal data under the Personal Information Protection Act carries administrative fines and regulatory scrutiny.
Each risk category carries distinct financial and legal consequences. Employers operating without a registered entity or a compliant employment structure face compounding exposure across multiple regulatory frameworks.
Key Labor Laws in South Korea
South Korea's employment framework is built on the Labour Standards Act, which sets minimum standards for wages, working hours, leave, and termination across all industries.
The Act applies to all workplaces with five or more employees. Smaller workplaces receive partial coverage. Employers must comply regardless of whether the employee is a Korean national or a foreign hire.
Several additional statutes govern specific areas of employment:
- The Act on the Protection of Fixed-Term and Part-Time Workers limits fixed-term contracts to two years and requires equal treatment for part-time staff
- The Act on the Protection of Dispatched Workers regulates temporary staffing arrangements and sets conditions for worker dispatch
- The Gender Equal Employment and Work-Family Balance Assistance Act mandates equal pay and governs parental leave entitlements
- The Occupational Safety and Health Act requires employers to maintain safe working conditions and conduct regular risk assessments
- The Employee Retirement Benefit Security Act requires employers to fund severance pay equivalent to at least 30 days of average wages per year of service
Violations of the Labour Standards Act can result in criminal penalties, including fines and imprisonment for responsible managers. Administrative fines apply for procedural breaches such as late payslip issuance or missing contract clauses.
Foreign employers operating through an employer of record transfer primary compliance responsibility to the EOR, which acts as the legal employer under South Korean law.
Employment Contracts
Written employment contracts are mandatory under the Labour Standards Act and must be issued before or on the employee's first working day. South Korea recognises three contract types: indefinite, fixed-term (capped at two years), and part-time.
Probationary periods typically run three months. Termination during probation still requires a justifiable reason under the Act.
Non-compete clauses are enforceable but courts cap them at 12 months and require the employer to provide compensation to the employee in exchange. Courts may nullify restrictions they consider excessive.
Working Hours and Overtime
The standard work week in South Korea is 40 hours. The maximum, including overtime, is 52 hours per week.
Employees working shifts of four or more hours are entitled to a 30-minute rest break. Shifts of eight hours or more require a one-hour break. Breaks are unpaid, and employees must be fully relieved of duties during that time.
At least one rest day per week is required by law.
South Korea also permits a selective working hours system. Under this arrangement, total hours are agreed over a one-to-three month period, and employees choose their own daily schedule. This system requires a written employee agreement and approval from the Ministry of Employment and Labor.
Minimum Wage
South Korea's minimum wage is set annually by the Minister of Employment and Labour. It applies to all workers regardless of nationality or employment type.
For 2026, the minimum monthly wage is KRW 2,156,880 before tax, calculated on a 40-hour week that includes the paid weekly holiday. Minimum wage applies to base pay. Meal allowances and other non-regular payments may be excluded from the calculation.
Leave Entitlements
South Korean law provides annual leave, public holidays, and family leave. Annual leave accrues from 11 days in year one to a maximum of 25 days. Public holidays total 12 days per year. Full details appear in the Employment Benefits section below.
What to Include in an Employment Contract or Offer Letter in South Korea
A compliant South Korean employment contract protects both parties and is legally required before the employee's first working day.
Every contract or offer letter should cover the following items to meet Labour Standards Act requirements and reduce the risk of disputes after hiring begins.
- Job title, duties, and reporting line: State the role clearly and identify the direct manager.
- Gross monthly salary in KRW and payment date: Specify the exact amount and the scheduled payment day each month.
- Working hours, weekly schedule, and overtime terms: Confirm the standard 40-hour week and the 50% premium rate for overtime.
- Probationary period duration and conditions: Typically three months; termination during probation still requires justifiable cause.
- Annual leave entitlement and public holiday schedule: Include the accrual scale from 11 days in year one up to 25 days, plus the 12 statutory public holidays.
- Notice period: A minimum of 30 days applies to employees with three or more months of service.
- Confidentiality and NDA terms: Define the scope of protected information and the duration of the obligation.
- IP ownership clause: Reference the Employee Invention Promotion Act, which allows employers with pre-existing contracts to receive automatic ownership of employee inventions.
- Non-compete scope, duration, and compensation: Courts may void clauses that impose excessive burdens; limit duration to a maximum of 12 months and include compensation for the restriction.
- Governing law: State the Republic of Korea Labour Standards Act as the applicable legal framework.
Payroll and Taxes in South Korea
South Korean payroll runs monthly in Korean won. Employers must withhold income tax and social insurance contributions at source before each payment.
Foreign employers without a local entity must use an EOR or a registered payroll provider. This ensures compliance with withholding obligations, remittance deadlines, and National Tax Service registration requirements. See Gloroots pricing for country-specific cost details.
Income tax is withheld monthly using progressive brackets. Employees complete an annual year-end tax settlement in February covering the prior calendar year. This settlement reconciles any over- or under-withholding from the previous year.
National income tax brackets
| Annual taxable income (KRW) | Tax rate |
|---|---|
| 0 to 14,000,000 | 6% |
| 14,000,001 to 50,000,000 | 15% |
| 50,000,001 to 88,000,000 | 24% |
| 88,000,001 to 150,000,000 | 35% |
| 150,000,001 to 300,000,000 | 38% |
| 300,000,001 to 500,000,000 | 40% |
| 500,000,001 to 1,000,000,000 | 42% |
| Over 1,000,000,000 | 45% |
Local income tax brackets
| Annual taxable income (KRW) | Local tax rate |
|---|---|
| 0 to 14,000,000 | 0.6% |
| 14,000,001 to 50,000,000 | 1.5% |
| 50,000,001 to 88,000,000 | 2.4% |
| 88,000,001 to 150,000,000 | 3.5% |
| 150,000,001 to 300,000,000 | 3.8% |
| 300,000,001 to 500,000,000 | 4.0% |
| 500,000,001 to 1,000,000,000 | 4.2% |
| Over 1,000,000,000 | 4.5% |
Foreign employees covered by equivalent home-country insurance may apply for a National Health Insurance exemption. Employment Insurance obligations differ by visa type: D-7, D-8, and D-9 visa holders are required to enroll, while others may qualify for exemption under reciprocity rules. National Pension contributions are exempt where a bilateral social security agreement exists between South Korea and the employee's home country.
A US company paying a South Korean employee has three options. First, register a local entity and manage Korean payroll compliance directly. Second, use an EOR that handles local contracts, payroll processing, and social insurance enrollment. Third, engage a global payroll provider that integrates Korean tax and insurance rules into a centralised system. All three options require KRW currency handling and withholding tax compliance.
Employment Benefits in South Korea
South Korean law mandates annual leave, public holidays, maternity and paternity leave, and enrollment in all four social insurance programs. Many employers supplement statutory minimums with meal allowances, education subsidies, and performance bonuses to remain competitive in the local talent market.
Leave entitlements in South Korea
| Leave type | Entitlement | Pay rate | Key conditions |
|---|---|---|---|
| Annual leave | 15 days after 1 year of service; up to 25 days based on tenure | Full pay | Employees with less than 1 year accrue 1 day per month worked |
| Public holidays | 16 public holidays per year | Full pay | Work on public holidays requires a 50% wage premium |
| Sick leave | No statutory minimum; employer policy applies | Varies by employer | Employees may use annual leave for illness if no separate sick leave policy exists |
| Maternity leave | 90 days total (120 days for multiple births) | Government-funded for first 60 days; employer-funded for remaining days up to ordinary wage | At least 45 days must be taken after birth; applies to all female employees |
| Paternity leave | 10 days | Full pay for first 5 days (employer-funded); government-funded for remaining days | Must be taken within 90 days of the child's birth |
| Childcare leave | Up to 1 year per parent for children under 8 or in second grade or below | Government-funded at 80% of ordinary wage for first 3 months, then 50% thereafter | Both parents may take leave; employer cannot refuse a qualifying request |
Statutory benefits set the floor for employment in South Korea. Employers offering supplemental benefits such as meal allowances and education subsidies typically see stronger retention, particularly in the technology and professional services sectors.
Paid Time Off and Public Holidays
Annual leave in South Korea accrues based on length of service and an 80% attendance threshold. Employees who do not meet the attendance requirement do not qualify for that year's entitlement.
Leave entitlements by service length:
- Less than 1 year: 11 days (1 day per month worked)
- 1 to 2 years: 15 days
- 3 to 4 years: 16 days
- 5 to 6 years: 17 days
- Every 2 additional years beyond 6: plus 1 day
- Maximum: 25 days at 21 or more years of service
South Korea recognises 12 public holidays each year. These include New Year's Day (January 1), Seollal over three days for Lunar New Year, March 1st Movement Day, Children's Day (May 5), Buddha's Birthday, Memorial Day (June 6), Liberation Day (August 15), National Foundation Day (October 3), Chuseok over three days for the Harvest Festival, Hangeul Day (October 9), and Christmas Day (December 25). The government may declare additional public holidays.
A 13th month payment is not legally required in South Korea. Many employers offer performance bonuses or seasonal allowances around Seollal and Chuseok as a cultural practice, but these are discretionary.
Sick Leave
South Korea has no statutory paid sick leave for non-work-related illness. Employees typically use their annual leave entitlement to cover sick days.
For work-related injury or illness, the Labour Standards Act requires the employer to pay 60% of the employee's average wage throughout the treatment period. This obligation applies regardless of the length of service.
Many employers offer paid sick leave as a voluntary benefit. This is common practice but not a legal requirement.
Maternity and Paternity Leave
South Korea provides 90 days of maternity leave, extended to 120 days for multiple births such as twins. The employer and government share the cost across the leave period.
Employers fund the first 60 days of maternity leave (75 days for multiple births). The government funds the remaining 30 days. Employees who experience a stillbirth or miscarriage receive between 5 and 90 days of leave, depending on the stage of gestation.
Nursing employees are entitled to two 30-minute paid breastfeeding breaks per workday until the child turns one year old.
Fathers receive 10 days of paid paternity leave. The employer pays for 5 days and the government covers the remaining 5 days. This leave can be taken all at once or in increments.
Each parent is also entitled to one full year of childcare leave per child, plus one additional year of reduced-hours work. Reduced hours may be cut by up to five hours per day. This leave must be taken before the child turns eight or completes second grade. Adoption leave mirrors the entitlements available to birth parents.
Public Health Insurance
All employees in South Korea must be enrolled in National Health Insurance (NHI). NHI covers medical treatment and long-term care for enrolled workers and their dependants.
As of January 2026, the combined NHI and Long-Term Care contribution rate is approximately 8.135% of monthly wages. The employer share is approximately 4.0674% and the employee share is approximately 4.0674%. Monthly contributions are capped at KRW 10,390,220.
Foreign employees covered by equivalent health insurance in their home country may apply for an NHI exemption.
Work Permits and Visas in South Korea
Foreign nationals must hold a visa that specifically permits paid employment. The E-7 visa is the most common route for skilled professionals entering South Korea.
Employers must supply an employment contract, company registration certificate, and job description to immigration authorities when sponsoring a visa. The E-7 and D-8 visas typically take two to six weeks to process from the date of submission.
| Visa Type | Purpose | Validity |
|---|---|---|
| E-7 | Specialised occupations requiring professional qualifications | Varies by role; renewable |
| E-9 | Non-professional employment in manufacturing or agriculture | Up to 3 years; extendable |
| D-8 | Corporate investment: managers, experts, and investors in foreign-invested businesses | Up to 2 years; renewable |
| F-4 | Overseas Koreans with Korean ancestry | Up to 2 years; renewable |
| F-6 | Spouses of Korean nationals | Up to 2 years; renewable |
Onboarding New Hires in South Korea
Onboarding in South Korea is a compliance step as much as a welcome process. Statutory registrations must be completed before the first working day.
- Before Day One: Register the employee with the National Pension Service, National Health Insurance Service, Employment Insurance, and Workers' Compensation Insurance. Issue the signed employment contract. Collect all required identity and payroll documentation. Verify work authorisation for any foreign national hires.
- Day One: Provide the payslip format and explain all deductions. Issue a workplace safety briefing as required under the Occupational Safety and Health Act. Confirm system access and equipment.
- First Week: Complete Personal Information Protection Act (PIPA)-compliant data handling consent. Introduce the team and confirm the reporting structure. Verify that all system access is active.
- Beyond the First Week: Schedule 30-day and 90-day check-in meetings. Confirm the probation review date in writing and align on performance expectations.
Missing statutory registration deadlines before Day One can result in contribution arrears and administrative penalties. Completing each phase in order keeps the employment record clean from the start.
NDAs, Confidentiality and IP Protection in South Korea
NDAs and confidentiality agreements are enforceable in South Korea but must be carefully drafted to withstand judicial scrutiny.
IP ownership is governed by the Employee Invention Promotion Act. Under this law, employers with pre-existing assignment contracts can claim ownership of employee inventions. Non-compete clauses must be reasonable in scope, capped at 12 months post-employment, and must include compensation to the employee to remain enforceable.
NDAs and data-handling clauses must also align with the Personal Information Protection Act (PIPA). PIPA governs how employers collect, store, and use employee personal data. Any confidentiality agreement that involves personal data processing must reflect PIPA requirements to be valid and compliant.
Termination and Offboarding in South Korea
South Korean law prohibits at-will termination. Employers must demonstrate just cause, follow a fair procedure, provide 30 days' notice or pay in lieu, and pay severance within 14 days of the termination date.
Final pay, including all severance, must be settled within 14 days. Failure to meet this deadline exposes the employer to statutory penalties under the Labour Standards Act.
Four-step termination checklist
- Document just cause thoroughly. Retain misconduct records, performance reviews, and written warnings before initiating any termination process.
- Follow fair procedure. Issue warnings, apply progressive discipline, or communicate restructuring plans clearly and in writing to the affected employee.
- Provide notice and pay severance. Give 30 days' written notice or pay in lieu, then settle all severance within 14 days of the termination date.
- Complete final documentation. Issue a final wage statement, confirm return of company property, and provide references or career transition support as agreed.
Offboarding steps
- Revoke system access and collect company equipment on the final working day.
- Issue a final payslip showing all deductions and the severance calculation.
- Provide an employment certificate (경력증명서) on request.
- Notify the National Pension Service, National Health Insurance Service, and Employment Insurance agency of the termination.
Business Culture in South Korea
South Korean workplace culture is strongly hierarchical, shaped by Confucian values. Seniority commands respect, and decisions typically flow top-down. Address colleagues by title and surname, not given name.
The balli-balli (빨리빨리) mentality drives a fast-paced work environment with high expectations for speed and responsiveness. Foreign managers should set clear timelines and communicate deadlines explicitly.
Direct criticism is avoided in group settings. Feedback is delivered privately to preserve face and maintain group harmony. Building trust takes consistent engagement over time, and initial meetings focus on relationship rather than transaction.
- Work-life balance reforms: Government reforms since 2018 reduced maximum working hours to 52 per week. Younger workers increasingly prioritise work-life balance alongside career progression.
- Union awareness: Labour unions are active in major industries including automotive and electronics. Understanding collective bargaining agreement obligations is important for workforce stability.
- Seasonal bonus expectations: Seollal and Chuseok bonuses are culturally expected, even where not legally required. Employers who omit them risk damaging employee relations.
Top Sectors to Hire From in South Korea
South Korea's workforce is concentrated in five high-growth sectors that attract consistent international hiring interest. Each sector offers distinct talent pools and in-demand roles.
- Semiconductors and electronics: South Korea accounts for approximately 20% of global memory chip production (SEMI, 2024). In-demand roles include semiconductor process engineers, chip design engineers, and fab operations managers.
- Information technology and software: South Korea's IT services sector grew 6.2% year-on-year in 2023 (Statistics Korea). In-demand roles include full-stack developers, AI/ML engineers, and cloud architects.
- Automotive and EV: Hyundai and Kia combined global sales exceeded 7.3 million vehicles in 2023. In-demand roles include EV battery engineers, autonomous driving software developers, and supply chain managers.
- Biotechnology and pharmaceuticals: South Korea's bio-health exports reached USD 13.6 billion in 2023 (KOTRA). In-demand roles include clinical research associates, regulatory affairs specialists, and bioinformatics scientists.
- Financial services and fintech: Seoul ranked 16th in the Global Financial Centres Index 2024. In-demand roles include quantitative analysts, compliance officers, and fintech product managers.
Companies hiring across these sectors often operate in markets with overlapping talent dynamics. For a regional comparison, see how employers hire employees in China across similar technology and manufacturing industries.
Top Cities to Hire From in South Korea
South Korea's talent is concentrated in distinct regional clusters, each tied to a specific industry. Companies hiring here can also compare regional hiring strategies with those used when they hire employees in Singapore, another major APAC hub.
- Seoul: The capital and primary business hub. Home to most tech startups, financial institutions, and multinational headquarters. Talent specialisation covers software engineering, finance, marketing, and management consulting.
- Busan: South Korea's second-largest city and a major port. Talent specialisation includes logistics, maritime engineering, international trade, and manufacturing operations.
- Daejeon: Home to the Daedeok Innopolis science and technology cluster, one of Asia's largest R&D parks. Talent specialisation covers semiconductor research, biotechnology, and government-funded science roles.
- Incheon: Location of South Korea's main international airport and Songdo International Business District. Talent specialisation includes aerospace, logistics, and international business development.
- Suwon and Hwaseong (Gyeonggi Province): Samsung Electronics' primary manufacturing and R&D campus is located here. Talent specialisation covers semiconductor engineering, electronics manufacturing, and hardware R&D.
Hire Compliantly in South Korea with Gloroots
The most practical compliant-hiring path for foreign companies entering South Korea without a local entity is to engage an Employer of Record. A Global Employer of Record manages contracts, payroll, and statutory registrations directly on your behalf.
This model works best for companies testing the South Korean market or hiring fewer than ten employees before committing to entity setup.
- No local entity required: Hire compliantly from day one without the KRW 100 million minimum investment.
- Fast onboarding: Employment contracts and social insurance registration completed within days.
- Local compliance and payroll: Income tax withholding, four statutory contributions, and Labour Standards Act adherence managed centrally.
- Predictable pricing: Fixed per-employee monthly fee with no hidden statutory surcharges. See EOR services for full details.
- Dedicated support: Local expertise covering contracts, termination, and compliance queries.
Companies planning long-term operations with ten or more permanent employees in South Korea should evaluate whether entity setup offers greater operational control at acceptable cost.
Frequently Asked Questions About Hiring in South Korea
Can a foreign company hire employees in South Korea without setting up a local entity?
Yes. A foreign company can hire employees in South Korea without a local entity by using a Global Employer of Record. The EOR acts as the legal employer, managing contracts, payroll, and statutory registrations on the company's behalf.
Foreign companies must also consider permanent establishment risk. Under South Korea's Corporate Tax Act, if employees provide services in South Korea for six or more months within a 12-month period, the company may trigger a taxable presence. Using an EOR mitigates this risk by establishing a compliant local employment structure.
What are the legal requirements for hiring employees in South Korea?
The Labour Standards Act governs minimum wages, working hours, leave, and dismissal. Employers must also comply with the Personal Information Protection Act (PIPA) when handling employee data. The Occupational Safety and Health Act requires employers to maintain safe working conditions for all staff.
What taxes and social security contributions do employers pay in South Korea?
Employers contribute to National Pension, National Health Insurance, Employment Insurance, and Workers' Compensation Insurance. Long-Term Care Insurance adds approximately 0.459% as a separate employer contribution. Employers also pay Resident Tax at 0.50%. See the Cost to Hire section for the full contribution table.
What work visas do foreign employees need to work in South Korea?
Foreign employees typically require one of five visa types. The E-7 covers specialised occupations. The E-9 applies to unskilled labour. The D-8 is for investors and managers in foreign-invested businesses. The F-4 applies to overseas Koreans, and the F-6 covers spouses of Korean nationals.
Processing takes approximately two to six weeks. Employers must supply a signed employment contract and company registration documents to support each application.
How does termination work in South Korea?
At-will termination is prohibited in South Korea. Employers must demonstrate just cause before ending an employment relationship.
Employees with three or more months of service are entitled to 30 days' notice or pay in lieu. Severance equals 30 days' average wage per year of service and must be paid within 14 days of the termination date.
What is the minimum wage in South Korea?
South Korea's minimum hourly wage for 2026 is KRW 10,320. The equivalent minimum monthly wage for a standard 40-hour week is KRW 2,156,880 before tax. The Minister of Employment and Labour reviews and sets the minimum wage annually. It applies to all workers regardless of nationality.
What statutory benefits are employees entitled to in South Korea?
Employees in South Korea receive 11 days of annual leave in year one, rising to 15 days from year two and capped at 25 days. There are 12 public holidays each year.
Maternity leave is 90 days. Paternity leave is 10 days. Each parent may take up to one year of childcare leave per child. All employees must be enrolled in the four mandatory social insurance programs. There is no statutory paid sick leave for non-work-related illness.
How long does it take to hire and onboard an employee in South Korea?
Using an EOR, most employers complete hiring and onboarding within one to two weeks. Foreign nationals requiring an E-7 visa add two to six weeks for visa processing before work can begin. Entity setup takes several months before a first hire is possible.
Ready to take the first step?
Request a demo now and learn how you can focus on building, without worrying for compliance, ever!
Get the Free hiring guide
