In 2025, the Ministry of Employment and Labor in South Korea announced a minimum hourly wage of 10,030 Korean won, which translates to a monthly salary of 2,096,270 Korean won (based on 209 hours per month).
Note: The minimum wage standard is updated annually.
Overtime Pay and Maximum Working Hours
Employers should pay employees at least 50% more than the normal wage for overtime work. For night shifts (overtime work between 10 p.m. and 6 a.m. the next day), employers should also pay at least 50% more than the normal wage. In addition, if the holiday overtime is within 8 hours, employers should pay 50% more than the normal wage. If the overtime exceeds 8 hours, employers should pay at least 100% more than the normal wage.
The maximum overtime per week is 12 hours, so the total working hours per week can be up to 52 hours.
Employers should provide employees with at least 30 minutes of rest for a 4 – hour workday and at least 1 hour of rest for an 8 – hour workday.
Personal Income Tax
The personal income tax rate ranges from 6% to 45%, and the income tax is calculated on a progressive basis. Various factors such as family status and the number of children may affect the tax rate and amount.
Local Income Tax Surcharge
In South Korea, individuals who need to pay income tax are subject to a 10% local income tax surcharge on the income tax amount.
Various factors such as family status and the number of children may affect the tax rate and amount.
Annual Leave
Employers should provide employees with 15 days of paid annual leave in the second year if they have an attendance rate of over 80% in the previous year. After 3 consecutive years of service, the annual leave increases by 1 day every two years, with a maximum of 25 days. Employees who have worked for less than 1 year should be given 1 day of paid leave if they have full attendance in a month.
If the employer fails to arrange or refuses the employee’s annual leave, the employer must pay corresponding compensation. However, if the employee voluntarily does not take the leave and the employer has actively arranged and encouraged it, the annual leave becomes invalid, and the employer does not need to compensate.
Statutory Holidays
In 2025, the statutory holidays in South Korea include: New Year’s Day; a temporary public holiday for the Lunar New Year on January 27th; the Lunar New Year (3 days); Samiljeol (Independence Movement Day); Labor Day; Children’s Day; Buddha’s Birthday; a temporary public holiday for the presidential election on June 3rd; Memorial Day; Liberation Day; Gaecheonjeol (National Foundation Day); Chuseok (Korean Thanksgiving Day, 3 days); Hangul Day; Christmas.
When a public holiday coincides with a weekend or another public holiday, it should be postponed by one day or a compensatory holiday should be arranged.
Note: 2025 South Korean public holidays
Other Leave
Maternity Leave
Pregnant women should be given a total of 90 days of leave before and after childbirth (120 days for multiple births). In the leave arrangement, at least 45 days (60 days for multiple births) should be after childbirth.
If a premature baby is born and the newborn is admitted to the intensive care unit, the maternity leave will be increased from 90 days to 100 days.
The first 60 days are paid leave. Therefore, employers are obliged to pay employees 100% of their wages on top of the amount reimbursed by the employment insurance. The remaining 30 days (45 days for multiple births) can be reimbursed from the employment insurance.
Special note: Even if the prenatal leave exceeds 45 days due to delayed childbirth, the leave period must be extended to at least 45 days after childbirth.
Paternity Leave
Employers should grant employees 20 days of paid paternity leave when they apply for leave due to the birth of their spouse’s child. The paternity leave should start within 120 days from the date of the child’s birth.
Employment insurance reimbursement: For the first 5 days of paternity leave, an amount equivalent to the normal wage will be paid (with a maximum of 401,910 won and a minimum of the minimum wage).
South Korea’s parental leave system is quite complex. Employees who have worked continuously for more than 6 months in one place and are raising one or more children aged 12 or above and in primary school sixth – grade or below are eligible to apply for parental leave.
For each child, each parent can enjoy a maximum of 1 year and 6 months of parental leave.
Starting from 2025, from the start of the parental leave to the third month, the maximum leave subsidy will be increased to 2.5 million won; from the fourth to the sixth month, the maximum leave subsidy is 2 million won; after the seventh month, the leave subsidy is 1.6 million won.
In 2024, 75% of the wage during parental leave was paid monthly, and the remaining amount was paid in a lump sum after the employee returned to work and worked continuously for more than 6 months after the parental leave. However, in 2025, after the system is abolished, the full wage during parental leave needs to be paid from the beginning.
Employers are not obliged to pay employees’ wages when they apply for sick leave for personal reasons.
Labor Contracts
Labor contracts should clearly define core working conditions such as wages and working hours to protect the rights of both employees and employers. The contract must be written in Korean and English (bilingual is acceptable), and it must be in written form and signed by both parties.
The contract must include details such as wages, working hours, holidays, annual leave, workplace, duties, leave, and severance pay.
Note: Regardless of the name, it refers to employees who have signed fixed – term labor contracts. Employers can hire fixed – term employees for a maximum of 2 years. If the employment period exceeds 2 years, it is considered an open – ended labor contract. Employers should not discriminate against regular employees and fixed – term employees who perform the same or similar work in the workplace.
Probationary Period
The probationary period is not mandatory. There is no minimum probationary period, and the maximum probationary period is 6 months.
Note: Generally, the probationary period in the market is 3 months, which is set according to the company’s internal regulations. Employees during the probationary period are also subject to the Labor Standards Act, so they cannot be dismissed without just cause.
Employer Costs
Employer costs are generally estimated to be about 11% of the employee’s salary. Specifically, it includes the national pension – 4.50%; national health insurance – 3.545%; long – term care insurance – 0.4591%; employment insurance – 1.15%; workers’ compensation insurance – 0.923% (including work – related injury insurance 0.8%, commuting accident insurance 0.06%, wage guarantee fund 0.06%, asbestos contribution 0.006%); local income tax – 0.5%; and severance pay accrual.
Employer costs will be calculated based on the employment materials (including identification and dependents’ certificates) submitted by employees and their actual dependents’ situation.
Termination of Employment (Legal Requirements and Best Practices)
Notice Period
The notice period is 30 days.
Special note: Whether an employee leaves voluntarily or involuntarily, employers need to pay the severance pay to the departing employee at a rate of at least 30 days’ average wage per year of service.
Voluntary Resignation
Employees are allowed to resign at any time according to the employment agreement.
Termination during Probationary Period
Employers or employees are allowed to terminate the employment relationship at any time during the probationary period. Reasons include poor performance, bad behavior, frequent lateness or absence.
Compliance requirements: Employers must follow a specific process, including warnings and performance improvement plans (PIPs), before terminating the labor contract. It must be due to continuous and repeated mistakes of the employee. Employers must conduct an objective and quantitative assessment of the employee and inform the employee of these assessment criteria in advance. Employers must develop a performance improvement plan (PIP) for the affected employee. Only when the employee’s performance does not improve can the labor contract be terminated.
Termination by Agreement
Employers and employees are allowed to mutually agree to terminate the employment relationship for any reason (including layoffs or other business reasons).
Common reasons: Business reasons (such as layoffs, downsizing, restructuring); potential disputes or lawsuits involving the employee; employees should not be dismissed without just cause; employees have negotiated the termination of the labor contract with the client.
Termination for Just Cause
Employers are allowed to immediately terminate the employment relationship without notice due to intentional misconduct. Reasons include serious performance issues, attendance problems, theft of company money or property, improper behavior or violation of the employment agreement or law, falsification of records, harassment, and violence.
Compliance requirements: Before terminating the employment, employers must send employees a written notice of the reason. Employers must also establish a panel to investigate the issue and give employees an opportunity to explain. After that, if the panel is satisfied with the reason for termination, they can proceed with the termination. The company manual must emphasize the proof of the reason.
Severance Pay
According to the Labor Standards Act in South Korea, employers are required to pay severance pay to employees who have worked continuously for more than 1 year. (For details, refer to: [smartdeer South Korea Severance Pay Explanation.docx](https://ideal – careerbridge.feishu.cn/file/VQk3bzB54owqENx8csacMRBLnjb?from=from_copylink))
Generally, severance pay should be paid within 14 working days after the employee’s departure, but it can be negotiated with the employee to be paid together with the salary. If it is an IRP account, it needs to be paid within 14 days because the bank needs to confirm the source invoice.
If an employee leaves after using parental leave and has worked continuously for more than 1 year before taking the leave, they are entitled to severance pay; the parental leave period is included in the continuous service years; the severance pay amount will not be reduced due to parental leave because the parental leave period is excluded from the average wage calculation.
