Effortless Hiring in South Korea

Employment Contracts

• Employment contracts in South Korea must be provided in writing and include essential details such as:
• Job responsibilities.
• Salary.
• Working hours.
• Leave entitlements.
• Termination conditions.
• While oral contracts are legally valid, written contracts are strongly recommended for clarity and mutual agreement.

Probationary Period

• A probationary period may last up to three months. During this time, either party can terminate the contract with shorter notice. Employers often prefer not to terminate contracts after this period due to associated unemployment costs.

Payroll Frequency

• Most companies operate on a monthly pay cycle, with employees paid once a month for work performed during that period.

Minimum Wage

• As of 2024, the minimum wage is set at KRW 9,860 per hour, which amounts to approximately KRW 2,060,740 per month for a standard 40-hour workweek.

Overtime

• The standard working hours are eight hours per day and 40 hours per week. Overtime is compensated as follows:
• 1.5 times the regular pay rate for hours exceeding the standard.
• 2 times the regular pay rate for night work after 10 PM.
• 2 times the regular pay rate for work on holidays.
• There is a cap of 12 hours on weekly overtime, and total work hours, including overtime, must not exceed 52 hours per week.

Employee Contributions

1. National Pension: Employees contribute approximately 4.5% of their gross salary.
2. National Health Insurance: Employees contribute approximately 3.55% of their gross salary.
3. Long-Term Care Insurance: Employees contribute approximately 0.46% of their gross salary.
4. Employment Insurance: Employees contribute approximately 0.9% of their gross salary.

Employer Contributions

1. National Pension: Employers match employee contributions at approximately 4.5% of gross salary.
2. National Health Insurance: Employers also match contributions at approximately 3.55% of gross salary.
3. Long-Term Care Insurance: Employers contribute approximately 0.46% of gross salary.
4. Employment Insurance: Employers contribute approximately 1.25% of gross salary.
5. Workers' Compensation Insurance: Employers contribute between 0.76% and 18.6% of gross salary, depending on the industry risk level.

Income Tax

• South Korea employs a progressive income tax system with rates ranging from 6% to 45% depending on income levels.

Types of Leave in South Korea

1. Annual Leave

• Employees are entitled to:
• 11 days of paid leave after one year of service, increasing to 15 days in the second and third years.
• From the third year onwards, one additional day is added every two years, up to a maximum of 25 days.

2. Sick Leave

• There is no statutory sick leave entitlement; however, companies may implement their own policies. Employees often use vacation days or claim through social insurance systems.

3. Maternity Leave

• Female employees are entitled to:
• 90 days of paid maternity leave (or 120 days for multiple births), with at least 45 days taken post-childbirth. The employer pays for the first 60 days and is reimbursed by social security for the remainder.

4. Paternity Leave

• Fathers are entitled to:
• 10 days of paid paternity leave.

5. Childcare Leave

• Available to both parents starting the day after maternity leave ends for up to one year.

Social Insurance

• Covers health insurance, pension contributions, employment insurance, and workers' compensation, with contributions from both employer and employee.

Notice Period

• Employers must provide at least 30 days' notice or pay 30 days' wages in lieu of notice.

Grounds for Dismissal

• Termination must be for justifiable reasons such as misconduct or inability to perform duties. Grounds should be clearly stated in work rules.

Restrictions on Dismissal

• Termination is prohibited during periods such as maternity leave and for 30 days thereafter.

Severance Pay

• Employees who have worked for at least one year are entitled to severance pay equivalent to at least 30 days' average wages for each year of continuous employment.