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Employer of Record South Korea

Our Employer of Record in South Korea service enables clients to hire employees without the need to operate a local legal entity there.

It makes a big difference to develop a new market with your own personnel on the ground. Particularly for functions related to sales & marketing, business development, distributor management, and service & maintenance, our customers are very satisfied using our South Korea Employer of Record Service. 

Our customers and their local teams can be free of the distractions of administrative tasks and complex local requirements. So you can fully focus on the development of your core business.

If your local business grows large enough, you can easily transfer the employees to your own subsidiary. It also provides a quick exit strategy if necessary. In addition to South Korea, we offer Employer of Record services in several other countries.


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Stephan Dorn FMC Group

Employer of Record South Korea - FMC Group's Approach

  • Quick, flexible, and easy entry into Netherlands in compliance with local employment laws
  • Complete control over business development with your own team
  • Good option for building up, managing, and supporting your distributors and key accounts by directly observing local developments and adjusting the strategy whenever necessary
  • Using our comprehensive recruitment experience for international clients, we can form a local team that fits your corporate culture.
  • Focusing on your core business instead of dealing with the time-consuming and complex local administrative tasks
  • Allowing for easy market exit if necessary
  • Integrating your employees into our team through motivational events and special meetings

EOR South Korea Management & Reporting Flow

Management and Reporting Flow Chart

Hiring an Employee

In South Korea, various employment laws play a crucial role in regulating the relationship between employers and employees. These laws include the Act on Equal Employment and Support for Work-Family Reconciliation, the Framework Act on Employment Policy, and the Employment Security Act, among others.

One important requirement stipulated by South Korean employment laws is the necessity of having an employment agreement in place with employees. This agreement outlines the terms and conditions of employment and is a fundamental aspect of the employment relationship, serving to protect the rights and obligations of both employers and employees.

Employment Contract – indefinite vs. fixed term

In South Korea, when drafting an employment contract, there are mandatory elements that must be included, such as details related to wages, working hours, weekly paid days off, paid annual leave, and notice periods. These elements are essential to outline the terms and conditions of the employment relationship.

While the contract should ideally be in the local language, it is also permissible to draft it in a foreign language if both parties agree to it.

South Korean employment contracts can take two main forms:

  • Indefinite Employment Agreement: This type of contract does not have a specific end date and continues until terminated by either party according to the agreed-upon terms.
  • Fixed-Term Employment Agreement: Fixed-term contracts can be concluded, but they cannot extend beyond a period of 2 years. If the employment relationship continues beyond the 2-year limit without a new contract, the employee gains permanent employee status. This ensures job security for employees who have been on fixed-term contracts for an extended period.

Probation Period

In South Korea, the typical probation period for employees usually ranges from three to six months. During this probationary period, employers have the discretion to terminate the employment relationship without providing notice to the employee. This allows employers to assess an employee’s suitability for the role and make decisions about their continued employment within the specified probation period.

Work Week, Overtime & Maximum Working Hours

In South Korea, a typical workweek consists of 40 hours, with a full working day lasting 8 hours. Within an 8-hour workday, employees are entitled to a 1-hour rest break. Additionally, every employee must be granted at least one rest day per week, commonly observed on Sundays.

Any working hours exceeding the standard 40-hour workweek are considered overtime. Overtime work is typically compensated at a rate of 150% of the employee’s regular wages. It’s important to note that the total weekly overtime hours should not exceed 12 hours. This regulation is in place to ensure reasonable working hours and fair compensation for employees who work beyond their standard schedules.

Income Tax

In South Korea, individual income tax is calculated using a progressive tax rate system. The income tax rates range from 6% to 45%, with higher rates applied to higher income levels. This means that individuals with higher incomes are subject to a higher percentage of income tax on their earnings.

Taxable Income (KRW) Tax Rate (%)
Less than 12,000,000 6%
12,000,001 – 46,000,000 15%
46,000,001 – 88,000,000 24%
88,000,001 – 150,000,000 35%
150,000,001 – 300,000,000 38%
300,000,001 – 500,000,000 40%
500,000,001 – 1,000,000,000 42%
More than 1,000,000,000 45%

Typical Benefits

South Korea offers free healthcare to all its citizens through the National Health Insurance Program, which is an integral part of the country’s universal healthcare system. This program ensures that healthcare services are accessible and affordable for all residents of South Korea, providing them with essential medical coverage and services.

Visa for the Employees

In South Korea, there is no distinct concept of “work permits” as you might find in some other countries. Instead, the immigration process primarily revolves around visas. Foreign nationals who intend to work in South Korea typically obtain the appropriate work visa that corresponds to their employment status and purpose in the country.

These work visas serve as the authorization for foreign nationals to work legally in South Korea, and they are granted based on specific criteria and documentation provided by the employer and employee. So, while South Korea may not have a formal “work permit” per se, the work visa essentially serves the same purpose by allowing foreign workers to engage in employment within the country legally

Time off Policies

Public Holidays

South Korea typically observes 11 public holidays each year. However, it’s important to note that the government may declare additional public holidays in certain years, depending on special circumstances or events. Therefore, the total number of public holidays may vary from year to year in South Korea, as additional holidays can be designated by the government as needed.

New Year’s Day January 1
Lunar New Year’s According to the Lunar Calendar
Independence Movement Day March 1
Children’s Day May 5
Buddha’s Birthday April 8 (Lunar Calendar)
Memorial Day June 6
Liberation Day August 15
Chuseok August 15 (Lunar Calendar)
National Foundation Day October 3
Hangeul (Hangul) Day October 9
Christmas Day December 25

Annual Leave

In South Korea, employees’ entitlement to paid time off (PTO) typically follows a progressive structure based on their length of service with the employer:

  • First Year of Employment: During the first year of employment, employees are entitled to one paid day off for every month they have worked with the employer. This means that their total annual leave entitlement for the first year would depend on the number of months they have been with the company.
  • After Completing the First Year: Upon completing their first year of service, employees’ annual leave entitlement increases to 15 days.
  • After 3 Years of Service: After working for three years with the same employer, employees’ annual leave entitlement increases by 1 day for every additional 2 years of service. The maximum annual leave entitlement is typically capped at 25 days.

This structure encourages long-term employment relationships and rewards employees with additional time off as they accumulate more years of service with the same employer. The specific details and calculations may vary slightly depending on the employer’s policies and employment contracts.

Sick Leave

In South Korea, it is not mandatory for employers to provide employees with leave for non-work-related illnesses or injuries. However, many employers choose to offer some form of paid sick leave to their employees as part of their employment benefits and policies.

For employees who sustain work-related injuries and are on work-related injury leave, they typically earn 70% of their salary for a period of up to three months. This compensation helps support employees who are unable to work due to injuries sustained in the course of their employment.

It’s important to note that the availability and terms of sick leave, whether for work-related or non-work-related illnesses or injuries, can vary among employers, and specific details are often outlined in employment contracts or company policies.

Other Leave Types

In South Korea, the maternity leave policy provides female employees with 90 days of maternity leave, which includes 45 days before and 45 days after the birth of the child. During the first 60 days of maternity leave, the employee typically receives her full wages. However, for the remaining 30 days, Social Security pays at a reduced rate.

In the case of multiple births, such as twins, maternity leave is extended to 120 days, with 75 of those days being fully paid.

For male employees, South Korea allows up to ten days of paid paternity leave, which can be divided into two separate leave periods. This paternity leave must be taken within 90 days after the birth of the child.

Parents in South Korea are also entitled to parental leave, which can be taken until their child reaches the age of 8. This leave is paid by Social Security at varying rates:

  • 80% of the employee’s wages for the first 3 months.
  • 50% of the employee’s wages for months 4 to 6.

These leave policies aim to support parents during important stages of their family life, ensuring that both mothers and fathers have the opportunity to spend time with their newborns and young children while still receiving some income

Terminating an Employee

In South Korea, employment termination procedures and entitlements are regulated by labor laws. Here are key points related to termination and severance:

  • Notice Period: Employers are generally required to provide employees with at least 30 days’ notice prior to termination. Alternatively, employers can choose to pay 30 days’ salary in lieu of the notice period. This notice period allows employees time to prepare for their departure or seek new employment opportunities.
  • Severance Pay: Full-time employees who meet specific criteria may be entitled to severance pay. This severance pay is typically equal to one month’s salary for each year of company service. To be eligible, an employee must have at least one year of company service and work more than 15 hours per week or more than 60 hours per month. Severance pay must be paid within two weeks of the employee’s termination.
  • Fixed-Term Contracts: Fixed-term employment contracts automatically end on the specified expiration date mentioned in the contract. There is no need for additional termination procedures in such cases.

These regulations aim to protect employees’ rights and provide them with certain benefits in the event of termination while also offering employers clear guidelines for handling employment terminations.

Disclaimer: Although we carefully researched and compiled the above information, we do not give any guarantee with respect to the actuality, correctness, and completeness.