Table of Contents

South Korea

Table of Contents


South Korean Won (KRW)

Payroll Frequency


Employer Taxes

10.67% - 29.17%

About South Korea

South Korea is an Asian nation, occupying the southern portion of the Korean peninsula, bordering North Korea, the Yellow Sea, and the Sea of Japan. The country has a wide coastal plain as well as numerous hills and mountains, with unfortunately frequent typhoons as part of its climate. South Korea also has a number of natural resources including coal, molybdenum, graphite, lead, and tungsten. At the end of WWII, the Korean peninsula was divided into Soviet and U.S. zones of occupation, culminating in the Korean War when the northern forces invaded the south in 1950. The border between the two countries remains one of the most heavily militarized in the world. South Korea is considered a developed economy and a regional powerhouse. It is a global leader in technology and is primarily an export-driven economy with a focus on electronics, automobiles, ships, petrochemicals, and robotics. With a population of about 50 million, South Korea is relatively homogenous in terms of represented ethnic groups, with Korean and English as its official languages. South Korean culture borrows heavily from the Chinese and Japanese cultures evident by the nation’s focus on Confucianism. The country is also one of the top-performing countries in reading literacy, math, and the sciences and has one of the most highly educated labor forces in the world.

Employment Relationship

• Permanent Employment

Under South Korea's Labor Standards Act, the term of a labor contract cannot exceed 1 year, except in cases where no term is fixed, or a term is fixed as necessary for the completion of a certain project. There are no statutory requirements for a probationary period for permanent employees. However, industry standards dictate that a probation term should be between 3 to 6 months.

• Fixed-Term or Specific-Purpose Contracts

The Labor Standards Act of South Korea stipulates that the duration of a labor contract cannot exceed 1 year, except where no term is set, or a term is deemed necessary to complete a certain project. If a fixed-term employment contract is renewed, the total period of continuous employment under a fixed-term contract cannot exceed 2 years unless: The period required to complete a particular project or task is specified A fixed-term employee is needed to fill a vacancy arising from a worker's temporary suspension from duty or dispatch  A period required for an employee to complete their schoolwork or vocational training is specified An employer enters into an employment contract with a senior citizen in compliance with the Employment Promotion for the Aged Act Certain other instances prescribed by Presidential Decree If an employer hires a fixed-term employee for more than 2 years, and none of the above exceptions apply, such a fixed-term employee shall be deemed an employee subject to an indefinite-term employment contract. No notice is required to dismiss employees hired for a fixed term contract lasting less than 6 months. 

• Temporary Employment Contratcs

Employees can hire temporary employees through temporary work agencies in South Korea by concluding a written contract. Such employees can be hired for up to 1 year, plus a 1-year extension. Temporary placement is prohibited in case of construction work, and harmful or hazardous jobs. South Korea's labor law states that the salaries and benefits of non-permanent workers should be equivalent to those of permanent employees with the same or similar jobs. If the employer violates these obligations in a manner that constitutes unreasonable discrimination, the affected non-permanent workers can request remedial action by filing a detailed statement with the relevant Regional Labour Relations Commission (RLRC) within three months of the alleged violation.

Probationary Period

South Korea's Labor Standards Act (LSA) does not limit the length of employee probationary periods. The LSA stipulates that employers do not need to provide the traditional 30-day notice of dismissal during an employee's probationary period. Typically, probationary periods are governed by the employee's individual labor contract and last between 3-6 months.

Working Hours

Per the amended Labor Standards Act of South Korea, standard work hours are 40 hours per week or 8 hours per day. An employer can extend work hours in a particular week or day according to the employee's contract. However, the average work hours per week during a specific period (of not more than 2 weeks) must not exceed 40 hours, and work hours in any particular week shall not exceed 52 hours or 12 hours a day.

Holidays / PTO

• Statutory Holidays

New Year’s Day: 1 January; Lunar New Year’s Day (Seollal): 31 December – 2 January by Lunar calendar; Independence Movement Day (Sam Il Jul): 1 March; Children’s Day (Uhrininal): 5 May; Buddha’s Birthday: 8 April by Lunar calendar; Memorial Day: 6 June; Independence Day (Kwang Bok Jul): 15 August; Harvest Moon Festival; (Chuseok): 14 August – 16 August by Lunar calendar; National Foundation Day (Kae Chun Jul): 3 October; Christmas Day: 25 December.

• Paid Annual Leave

Under the labor law of South Korea, full-time salaried employees are entitled to 15 days of paid annual leave after one year of service with an organization. During their first year of service, employees earn one day of leave for every fully worked month (for a total of 11 days of leave). Employees must have no less than 80% attendance during any year of service to qualify for paid leave. Employees are entitled to an additional day of leave for every two years of consecutive service, not including their first year. However, the statutory leave days earned per year are capped at 25 days. Employee leave continues to accrue when the employee is away on childcare leave. Paid annual leave shall be forfeited if not used within one year. However, this shall not apply in cases where the employee has been prevented from using the employer's leave. An employer may conclude an agreement with the employee that has the employee take their paid leave on particular days.

• Sick Leave

The labor law of South Korea does not require employers to provide leave to employees for non-work related illnesses or injuries.  Employers are required under the Labor Standards Act to provide paid leave for work-related illnesses or injuries. An employer shall provide necessary medical treatment at their expense or bear corresponding expenses for an employee who suffers from an occupational injury or disease. An employer shall pay an employee who is under medical treatment for occupational injury or disease compensation for suspension of work equivalent to 60% of his or her average wages during the period of his or her medical treatment. If an employee suffers from an occupational injury or disease due to their own gross negligence and the employer obtains admission for said negligence from the Labor Relations Commission concerned, the employer shall not be required to provide compensation for suspension of work or disability. An employer shall not dismiss an employee during a period of suspension of work for medical treatment of an occupational injury or disease and within 30 days immediately thereafter.

• Maternity Leave

Per South Korea's Labor Standards Act, employers must grant pregnant female employees a total of 90 days of paid maternity leave (120 days in case of a pregnancy with more than one child), which can be used before or after childbirth. Compensation is funded by the employer for 60 days, while the remaining 30 (or 45 days in case of a pregnancy with more than one child) days are paid from the Employment Insurance Fund, a state-run fund established by the Ministry of Employment and Labor. The 90 days of statutory leave include holidays and Sundays. In addition, at least 45 days must be used after childbirth (but where more than 45 days were spent before birth, an employer must allow 45 days of maternity leave after childbirth). Any period over the statutorily prescribed 90 days need not be considered paid leave. Although certain limitations exist, maternity leave must be allowed for premature births, miscarriages, and stillbirths. Under the Equal Employment Opportunity and Work-Family Balance Assistance Act, up to 1 year of unpaid leave is provided a parent with a child up to age 8.

• Paternity Leave

South Korea provides a fully paid paternity leave of 10 days to new fathers. Employees are entitled to take this leave within 90 days from the date of birth. The father is entitled to divide the leave and use it on 2 separate occasions.   They can also request reduced working hours (which may come with a relative salary adjustment). The period of reduced working hours can last for up to one year. Large employers pay 100% of the employee's ordinary earnings during paternity leave, while small and medium-sized companies pay 5 days, and the Employment Insurance Fund pays the remaining 5 days, up to a maximum of ordinary monthly earnings of KRW 2,100,000 (South Korean won).  Employers are prohibited from taking any adverse action against employees on paternity leave.

Termination of Employment

• Notice Period

According to South Korea's labor law, when an employer intends to dismiss an employee (including dismissal for business reasons unrelated to the employee's conduct), the employer must give the employee a notice of dismissal of at least 30 days. If the employer fails to give such advance notice, the employer must pay that employee their ordinary wages for no less than 30 days. The notice requirement does not apply where a natural disaster, calamity, or other unavoidable circumstance prevents the continuance of the business, where the employee has caused a considerable hindrance to the business, or where the employee has intentionally inflicted damage to the employer's property. Employers are not required to provide notice to the following employees: An employee employed daily, who has been employed for less than 3 consecutive months An employee who has been employed for a fixed period not exceeding 2 months An employee who has been employed for less than 6 months as a monthly paid employee An employee who has been employed for any seasonal work for a fixed period not exceeding 6 months An employee on a probationary period

• Severance Benefits

Per South Korea's labor law, a full-time employee is entitled to receive severance pay equal to at least 1 month's average wages for each year of continuous employment if they have worked for at least 1 year. During the qualifying year, the employee must have worked for more than 15 hours per week or more than 60 hours per month. Severance pay is to be paid within 2 weeks of termination unless otherwise agreed. Additionally, it must be paid regardless of the reason for termination. The employee's "average wages" includes all wages paid by the employer to the employee for the 3 months before the date of departure divided by the total number of days during the same period.