Easily manage employment in South Korea

Payroll services in South Korea

South Korea has a strong economy with key industries in technology, automotive, and manufacturing. With specific labor laws and tax regulations, employers in South Korea must ensure compliance with local payroll requirements, including social security contributions, employment contracts, and tax obligations. Understanding these regulations is essential for smooth payroll operations and legal compliance.

Payroll breakdown in South Korea

Employers in South Korea must adhere to national payroll regulations regarding wages, taxes, and social contributions. Below is an overview of key payroll components:

Minimum wage and working hours

• Minimum wage: South Korea’s minimum wage is KRW 9,860 per hour.
• Payroll frequency: Salaries are generally paid monthly.
• Standard working hours: The normal workweek in South Korea is 40 hours, typically spread over five days.
• Overtime: Employees are entitled to additional pay for overtime work, calculated at 150% of the regular wage for extra hours and 200% for work on public holidays.

Taxation and social security contributions

• Personal income tax: South Korea has a progressive income tax system with rates ranging from 6% to 45% depending on income levels.
• Employer contributions:
• National Pension Service (NPS): 4.5% of the gross salary.
• National Health Insurance (NHI): 3.676% of the gross salary.
• Employment Insurance: 0.9% to 1.65% of the gross salary.
• Workers' Compensation Insurance: Varies by industry.
• Employee contributions:
• National Pension Service (NPS): 4.5% of the gross salary.
• National Health Insurance (NHI): 3.676% of the gross salary.
• Employment Insurance: 0.9% of the gross salary.
• Corporate tax: The corporate income tax rate in South Korea ranges from 10% to 25% depending on taxable income.
• Tax reporting : Employers must file payroll taxes and contributions with the National Tax Service (NTS) and relevant social security institutions regularly.

Payroll compliance in South Korea

• Employment contracts must be provided in writing and specify terms such as salary, working hours, and job responsibilities.
• Payroll deductions: Employers must ensure accurate deductions for social security, health insurance, and income tax.
• Employers must stay updated on changes to South Korea’s labor laws and tax regulations to avoid penalties.

Run payroll in South Korea with Remote

Managing payroll in South Korea requires careful attention to tax regulations, employment laws, and social security requirements. Employers must stay informed about tax rates, wage laws, and reporting deadlines to ensure smooth payroll processing and avoid penalties.

The good news is, you can pay anyone, anywhere — from your team in the office to your team abroad, all with Remote Payroll. To see just how easy global payroll can be with Remote, book a demo today.