Employee Leasing in South Korea
South Korea is known as one of the world’s leading trading powers. Expanding business activity in South Korea means getting access to a global consumer market that represents around three-quarters of the world population. South Korea’s advanced communication and technology infrastructure, as well as its friendly business environment, are also some of the reasons that have attracted thousands of multinationals to expand in the country.
Through employee leasing, companies can safely measure their business potential in South Korea. The employee leasing services we offer at FMC Group allow clients to focus on their growth strategy without having to worry about administrative and regulatory procedures relating to the recruitment and management of local employees. Our employee leasing services also provide clients with great flexibility that significantly reduces their investment cost and risk.
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- Advantages of Employee Leasing in South Korea
- Employee Leasing Services Offered by FMC Group
- Advantages of the South Korean Market
- Recruitment in South Korea
- Minimum Wage and Payroll
- Social Contributions and Taxes
- Working Hours and Overtime
- Vacation Days
- Parental Leave and Sick Leave
- Notice Period
Advantages of Employee Leasing in South Korea
- Expanding business activity into South Korea through employee leasing puts your company in the heart of East Asia, one of the most economically-thriving regions in the world.
- Employee leasing gives you the opportunity to instantly expand your business activity in South Korea and have control of a local team.
- Through employee leasing, you can have quick and easy access to the highly-skilled workforce established in South Korea.
- South Korean workers are known for their very strong work ethics and high familiarity with international business standards and practices.
Employee Leasing Services Offered by FMC Group
- We select the best candidates that match your needs from the labor market and our growing employee database.
- We negotiate and sign employment contracts according to your terms.
- We provide payroll accounting services that respect international standards.
- We pay all the necessary social contributions and taxes according to local law.
- We monitor paid vacations of your employees according to local law.
- We negotiate and establish a private health insurance policy for your employees if needed.
- We maintain regular contact with you regarding your employees.
Management and Reporting Flow of Employee Leasing Services
Advantages of the South Korean Market
- South Korea is one of the strongest countries in the world in the field of information and communication technology. The country is known for its innovation and its heavily digitalized administration. It is also one of the world’s leading producers of computer software, multimedia, and communication devices. South Korea’s internet infrastructure is one of the fastest and most reliable in the world. Furthermore, South Korea was among the first countries globally to offer countrywide 5G mobile internet services.
- South Korea is one of the world’s top 10 trading powers, with a positive trade balance valued at over USD 60 billion. This is mainly attributed to the country’s large number of free trade agreements that cover nearly three-quarters of the world’s population. Some of the most important trade agreements that South Korea has signed are with the United States, the European Union, the Asia-Pacific Economic Cooperation Forum, the Association of Southeast Asian Nations, etc.
- South Korea has a highly diversified and stable economy. While the South Korean economy was mostly reliant on electronics, cosmetic products, and the automotive industry, it has become in the past decades a major global actor in the entertainment industry, notably through music, cinema, television, video games, and comics.
- The South Korean economy is very open to international companies and foreign investors. The country has implemented a variety of benefits to attract foreign investments, notably tax incentives, cash support, and mitigation of land-related regulations. South Korea is also known for its strong protection system for intellectual property rights and foreign exchange transactions.
- Invest Korea is a comprehensive source of information on investment opportunities and business regulations in South Korea.
Recruitment in South Korea
Minimum Wage and Payroll
- The national minimum wage in South Korea is set at KRW 9,160 (EUR 6.83) per hour, KRW 73,280 (EUR 54.6) per day, and KRW 1,914,440 (EUR 1,427) per month.
- Salaries in South Korea are generally paid monthly, before the last working day of each month.
Social Contributions and Taxes
|Long-Term Care Insurance||5.76%|
|National Health Insurance||3.92%|
|Employment Insurance||1.05% – 1.65%|
|Worker Accident Compensation Insurance||0.70% – 18.60%|
|Total||16.43% – 34.93%|
|Long-Term Care Insurance||6.86%|
|National Health Insurance||3.92%|
|Employee Income Tax|
|Up to KRW 12 million per year (EUR 8,946)||6.00%|
|Between KRW 12 million and KRW 46 million (EUR 8,946 – EUR 34,291)||15.00%|
|Between KRW 46 million and KRW 88 million (EUR 34,291 – EUR 65,601)||24.00%|
|Between KRW 88 million and KRW 150 million (EUR 65,601 – EUR 111,820)||35.00%|
|Between KRW 150 million and KRW 300 million (EUR 111,820 – EUR 223,639)||38.00%|
|Between KRW 300 million and KRW 500 million (EUR 223,639 – EUR 372,732)||40.00%|
|Between KRW 500 million and KRW 1 billion (EUR 372,732 – EUR 745,464)||42.00%|
|From KRW 1 billion (EUR 745,464)||45.00%|
Working Hours and Overtime
- The legal working hours limit in South Korea is set at eight hours per day and 40 hours per week.
- Overtime work in South Korea is legally capped at 12 hours per week.
- Overtime work has to be paid at a rate of 150% of the regular salary during the day and 200% during the night (after 10 p.m.).
- Employees in South Korea have the right to an annual paid leave of at least 11 days in their first year of service. In the second and third years of service, employees are entitled to 15 days of paid leave. Afterward, employees earn one additional day of annual leave every two years, up to a maximum of 25 days.
- South Korea celebrates 12 public holidays:
- New Year’s Day: January 1st
- Korean New Year: Between January and February (moveable)
- Independence Movement Day: March 1st
- Children’s Day: May 5th
- Buddha’s Birthday: Between April and May (moveable)
- Memorial Day: June 6th
- Constitution Day: July 17th
- Liberation Day: August 15th
- Chuseok: Between August and September (moveable)
- National Foundation Day: October 3rd
- Hangul Day: October 9th
- Christmas Day: December 25th
Parental Leave and Sick Leave
- All pregnant employees in South Korea are entitled to 90 days of fully paid maternity leave, increasing to 120 days for multiple or complicated births. Maternity leave is generally divided equally before and after birth. For large companies, the employer has to pay the salary for the first 60 days, while social security covers the remaining 30 days. For small companies, social security covers pay during the entire duration of the leave.
- New fathers can take 10 days of fully paid paternity leave within the first 90 days after the child is born. Pay during paternity leave is covered by the employer for five days and by social security for the remaining five days.
- Parents of children under the age of eight can request a full-time or part-time childcare leave for up to one year. Employees are eligible for an allowance paid by social security during this period.
- Employees who get injured during work are entitled to three months of paid leave with 70% of their regular salary.
- There is no legal provision for sick leave in South Korea. It is usually subtracted from the annual paid leave.
- There is no legal requirement for a notice period in South Korea. It usually varies based on the employment contract and it is common for it to be set at one month.
Further Useful Information
- South Korea’s Ministry of Employment and Labor has a large public database of Questions & Answers about labor laws.
Disclaimer: Although we carefully researched and compiled the above information, we do not give any guarantee with respect to the actuality, correctness, and completeness.