Employer of Record (EOR) in South Korea
South Korea’s innovative economy and strategic location make it an attractive destination for business expansion. Our Employer of Record South Korea services help you navigate the country’s complex employment regulations, ensuring full compliance. By managing payroll, taxes, and employee benefits, our EOR South Korea solutions enable you to operate efficiently without the need for a local entity.
Employment Benefits
Mandatory benefits
Korea mandates several employee benefits to ensure their well-being and social security. These benefits are designed to provide financial stability and health support to employees.
| National Pension Scheme | The National Pension Scheme is a mandatory social insurance program in South Korea, requiring both employers and employees to make regular contributions.
The contribution rate is 9% of the employee’s monthly salary (it is split equally between employer and employee, with each contributing 4.5%). |
| National Health Insurance | National health insurance is designed to provide comprehensive medical coverage for employees, funded by contributions from both employers and employees.
The approximate contribution rate is 6.99% of the employee’s monthly salary (which is split equally between employer and employee – each contributing around 3.495%). |
| Employment Insurance | Employment insurance provides a safety net for employees who become unemployed, offering financial assistance and job-seeking support during their transition to new employment.
The contribution is about 1.6% of the employee’s monthly salary (with employers contributing approximately 1.3% and employees contributing 0.3%). |
| Industrial Accident Compensation Insurance | This insurance program compensates employees for work-related injuries or illnesses, providing financial support for medical treatment and lost wages. Employers are responsible for funding this insurance – the rate varies based on the industry but generally ranges from 0.7% to 3% of the employee’s monthly salary. |
In South Korea’s competitive job market, offering a comprehensive benefits package is crucial for attracting and retaining top talent. Employers often provide additional benefits such as private health insurance, performance-based bonuses, flexible work arrangements, and opportunities for professional development, in addition to mandatory contributions to National Pension and Health Insurance.
These supplementary perks not only enhance employee satisfaction and productivity but also encourage long-term loyalty, helping you build a dedicated and motivated workforce. By offering a well-rounded benefits package, you can strengthen your employment offer and create a supportive environment that fosters both personal and career growth.
Our Employer of Record (EOR) service in South Korea can help you design a benefits package tailored to your industry and workforce requirements. We ensure that your benefits offerings are fully compliant with local regulations and meet the expectations of skilled professionals. By partnering with us, you can create a compelling benefits package that strengthens your employment offer and supports both employee well-being and career growth.
Additional perks and benefits
In addition to mandatory contributions, employers in South Korea frequently offer extra perks to boost employee satisfaction and retention. These additional benefits help create a positive workplace culture and can set companies apart in a competitive job market. By investing in their employees’ well-being and happiness, employers can foster loyalty and enhance overall productivity.
| Performance bonuses | Many companies in Korea implement performance-based bonuses as a way to incentivize employees for their hard work and contributions.
These bonuses are often linked to individual, team, or company performance metrics, encouraging employees to excel and align their efforts with organisational goals. |
| Housing allowances | To assist employees with accommodation costs, employers may provide housing allowances or offer company housing as part of their benefits package.
This support not only alleviates financial burdens but also helps attract talent, particularly in urban areas where housing costs can be high. |
| Education and training programs | Investment in employee development through various educational and training programs is a common practice among Korean companies.
By offering access to workshops, courses, and certifications, employers not only enhance their workforce’s skills but also demonstrate a commitment to the professional growth and career advancement of their employees. |
| Wellness programs | Many companies prioritise employee health and well-being by offering wellness programs that include gym memberships, health screenings, and mental health support services.
These initiatives promote a healthy work-life balance, reduce stress, and contribute to a more engaged and productive workforce. |
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Working Hours and Leave Policies
Standard working hours
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Statutory working hours
Korea has well-defined statutory working hours designed to balance work and personal life.
- Standard working hours: The standard working hours in Korea are set at 8 hours per day, and 40 hours per week, which is usually distributed over 5 days.
- Rest days: Employees are entitled to rest days on weekends, providing them with regular time off to recharge.
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Overtime regulations
Overtime work is regulated to ensure fair compensation and prevent excessive working hours. Employees are entitled to additional pay for overtime work, which is capped to prevent overwork.
- Employees receive 150% of their regular wage for overtime work.
- Overtime is limited to 12 hours per week to prevent excessive working hours.
- Employees working at night or on holidays are entitled to higher overtime pay, typically 200% of their regular wage.
- Instead of overtime pay, employers may offer compensatory leave for overtime hours worked.
Leave entitlements
Employees in Korea enjoy various leave entitlements to ensure work-life balance and personal well-being.
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Annual leave:
Employees are entitled to a minimum of 15 days of paid annual leave after completing one year of service.
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Sick leave:
Employees receive paid sick leave, which typically requires a medical certificate to validate the absence.
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Maternity leave:
Female employees are entitled to 90 days of paid maternity leave, with a portion of the leave funded by social insurance. This benefit supports mothers during their recovery and bonding period after childbirth, ensuring a smoother transition into parenthood.
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Paternity leave:
Male employees are entitled to up to 10 days of paid paternity leave to support their families.
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Public holiday leave:
Employees are entitled to paid leave on designated 15 public holidays established by the government.
In South Korea, detailed local laws govern employee leave entitlements, making strict compliance essential for your business. At AYP, we manage leave entitlements accurately and in full compliance with South Korea’s regulations. Let us manage the complexities of local compliance, so you can concentrate on growing your core business.
Visa and Work Permits
Employment visas
Employment visas in Korea are essential for foreign nationals seeking to work legally in the country. These visas are designed to facilitate the hiring of foreign talent in various industries while ensuring compliance with local immigration laws. The application process involves specific requirements, including job offers from Korean employers and relevant documentation to support the visa request.
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E-2 Visa (Foreign Language Instructor)
This visa is for foreign nationals who wish to teach a foreign language in Korean educational institutions, such as schools or language academies.
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E-7 Visa (Specially Designated Activities)
This visa is for individuals with specialised skills or qualifications in fields such as technology, engineering, or finance, allowing them to work in various professional roles.
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E-1 Visa (Professor)
This visa is for foreign professors and researchers who are invited to teach or conduct research at accredited higher education institutions in Korea.
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D-8 Visa (Corporate Investment)
This visa is for foreign investors or employees of foreign companies that have made significant investments in Korea, enabling them to work in connection with their investment activities.
Business visas
Business visas in Korea are designed for foreign nationals who wish to engage in various business-related activities, such as attending meetings, conferences, or exploring investment opportunities. These visas facilitate international business operations and promote foreign investment in the country, supporting Korea’s robust economy.
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B-1 Visa (General Business Visa)
This visa is for individuals visiting Korea for short-term business activities, such as attending meetings, conferences, or conducting market research.
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B-2 Visa (Business Training Visa)
This visa is for foreign nationals who come to Korea for training programs related to their work or professional development.
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D-9 Visa (Trade Management Visa)
This visa is for individuals involved in trade activities, including those managing or operating trade businesses in Korea.
Other relevant visa types
In addition to employment and business visas, Korea offers a variety of other relevant visas that cater to different purposes, such as study, family reunification, and cultural exchange. These visas facilitate the entry and stay of foreign nationals in the country, promoting international collaboration and understanding. Each visa category has specific requirements and application processes tailored to the individual’s situation and intended activities in Korea.
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F-1 Visa (Visiting and Joining Family Visa)
This visa allows foreign nationals to visit or join family members residing in South Korea, providing opportunities for family reunification.
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F-2 Visa (Residence Visa)
This visa is for foreign nationals who have been granted long-term residency in South Korea, typically for those with a stable income or family ties.
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H-1 Visa (Working Holiday Visa)
This visa is for young adults from specific countries who wish to travel and work in South Korea for an extended period, promoting cultural exchange and tourism.
Navigating South Korea’s employment visa and work permit regulations can be challenging due to strict rules and detailed requirements. Our Employer of Record (EOR) service simplifies the visa application process, ensuring full compliance with South Korea ’s immigration laws. We handle everything from documentation to approvals, allowing you to onboard international talent quickly and seamlessly without the usual complications. Avoid the stress and potential delays—partner with us to ensure a smooth, compliant visa process.
Termination and Offboarding Procedure
Under South Korean labor laws, employers cannot terminate, suspend, transfer, reduce pay, or lay off employees without valid justification. Employees must be given a 30-day notice prior to termination. However, notice is not required in the following situations:
- If the employee has been employed for less than 3 months.
- If the business is unable to continue due to natural disasters, bankruptcy, armed conflict, or other unavoidable circumstances.
- If the employee has intentionally committed a wrongful act that significantly harms the business or organization.
When terminating employment in South Korea, employers must ensure a smooth offboarding process by settling all final payments, including wages and unused leave entitlements. They must also provide written termination notice and a certificate of employment.
Offboarding and termination in South Korea require careful attention to local labor laws. AYP’s Employer of Record (EOR) services simplify these processes, ensuring smooth transitions and full compliance with South Korea’s regulations. Let us take care of the legal intricacies so you can focus on your business.
Advantages of Using Employer of Record through AYP
Partnering with AYP’s Employer of Record South Korea offers substantial benefits in navigating the country’s complex employment regulations. Our comprehensive service manages payroll, benefits, and tax compliance, protecting your business from the risks associated with direct hiring.
With our extensive knowledge of South Korean labor laws, your company can confidently meet all legal requirements related to wages, leave entitlements, and workplace safety. This proactive management streamlines your administrative processes and safeguards you from potential penalties and legal disputes.
By relying on AYP’s EOR South Korea for these essential functions, you can focus on growing your business and achieving your strategic goals. Let AYP be your trusted Employer of Record South Korea partner in providing a seamless and compliant employment experience in South Korea.
Contact us today, and allow our EOR South Korea experts to handle the complexities of employment on your behalf.
FAQs
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What is the process of hiring EOR employees in South Korea?
AYP’s onboarding process for employees in South Korea includes:
- Conducting a thorough analysis of the client’s requirements
- Performing a cost simulation for employee hiring
- Assisting with obtaining necessary work permits
- Preparing employment contracts that comply with local regulations
- Enrolling employees in benefits programs
- Sending a welcome email to new hires
Hire compliantly in the South Korea with no hidden cost
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