Mercans Logo
SUBMIT RFP CONTACT US
South Korea countryintel banner
Country Intel

Employer of Record and Payroll Services in South Korea South Korea flag

mercans logo

Mercans-owned legal entity
union We have our own legal entity to protect your business from risk and provide you and your employees with a distinctive experience.

Services available

  • Employer of record
  • Contractor management
  • Global payroll
  • In-country payroll
Global Payroll Team
Written by Global Payroll Team
Last updated May 1, 2026
Expert Reviewed
South Korea map

eor

Mercans offers complete payroll, PEO and HR services in South Korea

A mature, industrialized economy, South Korea remains one of the world’s leading advanced economies, with strong capabilities in semiconductors, automobiles, shipbuilding, electronics, biotechnology, batteries, AI, and advanced manufacturing. The country continues to invest heavily in research and development and remains an attractive destination for international business, although employers should closely monitor labour, payroll, social insurance, and immigration developments.

eor

Doing Business in South Korea

Seoul and other major business centers continue to offer a strong business environment supported by advanced digital infrastructure, deep manufacturing capability, and a well-developed innovation ecosystem. The government continues to use grants, subsidies, tax incentives, and industrial policy tools to support strategic sectors and economic growth.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in South Korea is straightforward. Choose how your company operates from a range of entity types that suit your individual circumstance.

Banking

Banking hours vary by institution, with many branches operating from Monday to Friday during standard business hours.

Working Week

The standard working week is generally from Monday to Friday. Under the Labor Standards Act, the standard statutory working week is 40 hours, usually 8 hours per day.

Labor Law

Relevant laws pertaining to wages, working hours, leave, dismissal, and other employment terms are primarily prescribed by the Labor Standards Act. Many core statutory protections apply broadly, while certain provisions apply differently depending on workforce size.

Main Industries

Semiconductors, electronics, automobiles, shipbuilding, steel, petrochemicals, batteries, biotechnology, and information technology.

GDP Growth

1.0%

Dates & Numbers

yyyy/mm/dd

Official State Name

The Republic of Korea

Population

51.6 million

Capital

Seoul

Major Languages

Korean

Currency

South Korean Won

Internet Domain

.kr

International Dialing Code

+82

loader-image
South Korea
Seoul, KR
12:00 am, May 6, 2026
10°C
clear sky
76 %
Wind Gust: 0 mph
Clouds: 0%
Sunrise: 5:31 am
Sunset: 7:25 pm

eor

Payroll

The government continues to conduct labour inspections and issue guidance on wage payment, minimum wage compliance, working time, and employment practices. From 1 January 2026, the statutory minimum wage is KRW 10,320 per hour.

It is mandatory to provide employees with payslips

Payslip

Payroll and labour-related records must generally be kept for 3 years

Reports

Employees receive 11 days of paid annual leave during the first year, and 15 days after one year of service subject to attendance requirements

Annual Leave

Employees are not generally entitled to statutory paid sick leave under the Labor Standards Act

Sick Leave

Employees are entitled to 90 days of maternity leave.

eorRead more
A portion of maternity leave must be taken after childbirth. Eligible employees are also entitled to paid paternity leave, which has been expanded under recent reforms to 20 days.

Maternity & Paternity Leave

30 days’ notice or payment in lieu is generally required to terminate employment

Employee Termination

There are no provisions mandated by law regarding the 13th month salary

13th month salary

10,320 KRW per hour

Minimum Wage

Employees are entitled to overtime pay calculated at 150% of their regular rate, with higher premiums applying for night work and certain holiday work

Overtime

Employees who are paid monthly are generally entitled to one month’s average wage for each year of continuous service

Severance Pay

eor

Tax and Social Security

Taxes include personal income tax, local income tax, and value-added tax. South Korea also operates mandatory payroll-linked social insurance schemes, including national pension, national health insurance, long-term care insurance, employment insurance, and workers’ compensation insurance, with some rates varying by category and sector.

Tax

A taxpayer pays income tax on their income. A resident is subject to income tax on worldwide income, while non-residents are taxed on Korean-source income. Corporate income tax in South Korea is progressive, not a single flat rate.

25%

Corporate Income Tax

45%

Personal Income Tax

10%

Sales Tax

10%

VAT

Social Security

South Korea’s payroll social insurance framework includes mandatory employer and employee contributions for pension, health insurance, long-term care, and employment insurance, while workers’ compensation is employer-funded and varies by industry classification.

Varies

Social Security Rate

Varies

Social Security Rate for Employers

Varies

Social Security Rate for Employees

eor

eor

Employment Law

South Korea’s employment framework is centered on the Labor Standards Act and related labour legislation. Employers must comply with rules on written terms, wage payment, working time, dismissal, leave, and statutory benefits, while the government continues to support small employers with compliance guidance.

Employment Agreement

Key terms of employment must be provided to employees in writing, including wages, working hours, holidays, and leave. Employers are strongly advised to use written employment agreements that clearly set out the main employment conditions.

Working condition

The standard statutory working week is 40 hours, usually with a maximum of 8 hours per day, although overtime is permitted within legal limits. Many labour protections apply differently depending on workforce size and employee category.

Leaves

Employees are entitled to statutory annual leave if attendance requirements are met. In general, employees are not legally entitled to statutory paid leave for non-work related illness or injury, although employers may provide this contractually or by policy.

Employment termination

Employers are prohibited from dismissing an employee without just cause. Dismissal generally requires at least 30 days’ notice or payment in lieu, and collective redundancies are subject to stricter standards and procedures.

eor

30 days

Minimum notice period for terminating an employee

eor

15

Total number of public holidays

eor

40

Working hours per week

eor

No entitlement

Total number of days for Compassionate & Bereavement Leave

eor
eor

Immigration

There are multiple visas available for short-term visits, study, investment, business, and employment. Foreign professionals may enter South Korea under various work-authorized visa categories depending on the nature of the role, and applications may be processed through overseas missions or authorized electronic systems where available.

eor

Residency permits

A foreign worker who plans to enter Korea must possess a valid passport and a valid visa or stay status matching the purpose of entry, unless exempt. Foreign nationals planning to stay for more than 90 days must generally register with the competent immigration office within 90 days of arrival.

Work Permit Validity

Varies by visa category and status granted

Required Documents

A copy of the employment contract or supporting employment documents

Educational and professional certificates

Criminal record certificate where required

Recommendation or supporting letters where applicable

Original passport and copies

Passport-size photo

Any additional immigration documents required for the relevant visa category

Compliant, reliable, error-free and touchless payroll in South Korea

Build the best team and hire top talent compliantly in South Korea. Get in touch with South Korea payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
Tell us where you want to grow.
Our team regional experts are here to support you with global expansion plans.

    I’m interested in

    Sample message

    1. We want to expand in $country

    2. We want you to employ 'X' number of employees on our behalf

    3. Contract duration – 3/6/9/12/18/24 months

    4. Number of legal entities (if any exist today)

    5. Employment type: EOR employee or contractor?

    6. Any benefits requirement or “standard statutory only”?

    FAQs

    What is an Employer of Record (EOR) in South Korea and how does it work for foreign companies?

    Mercans’ EOR services in South Korea let global companies hire local talent without setting up a legal entity. We act as the legal employer, managing contracts, payroll, taxes, and compliance with Korean labor laws.

    Why should businesses use an EOR instead of establishing a legal entity in South Korea?

    Using Mercans as your EOR enables fast, compliant market entry. You avoid the cost and complexity of entity setup, licensing, and local administration while we handle employment and compliance obligations.

    How does payroll outsourcing in South Korea ensure compliance with tax and labor laws?

    Mercans ensures accurate payroll processing, tax withholdings, and social insurance contributions in line with Korean regulations, reducing compliance risks and ensuring transparency.

    Can an Employer of Record in South Korea hire employees and manage work visas for international companies?

    Yes. Mercans can hire local and foreign employees, manage visa applications, and ensure compliance with South Korean immigration and labor requirements.

    What are the main benefits of using EOR and payroll services in South Korea for global expansion?

    Key benefits include quick market entry, lower costs, full legal compliance, expert local HR support, and flexible workforce scaling without forming a local entity.

    FAQ
    Learn how we can help you comply with Local labor law
    Discover the best-in-class Payroll solution
    Countries we serve