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South Korea

Basic Economic Summary

Overview

In Korea, a wave of digital innovation is sweeping across all areas from online shopping to finance. Korea is thus likely to experience a sharp increase in demand for the following jobs: Technical Sales Representatives, Application Developers, SoC Design Engineers, Data Scientists, Deep Learning and Autonomous System Platform Specialists. (Robert Walters’ 2020 salary guide)

Basic Information

  • Local Languages: Korean (official)
  • Major Economic Hubs: Seoul, Busan, Incheon
  • Capital: Seoul
  • Currency: South Korean Won (KRW)
  • Population: 51.33 million (2021)
  • Date Format: yy/mm/dd

Useful Information

  • English Proficiency: Medium
  • GDP Per Capita (in USD): 31264.94 (2020)
  • Exchange Rate (KRW/USD): 0.00084
  • PISA Ranking (2018): 7
  • Number of University Graduates (2011): 4,206,673

Local Universities

Top Local Universities:

University Rankings
Seoul National University Ranking in South Korea: 1, World Ranking: 228
Korea Advanced Institute of Science and Technology (KAIST) Ranking in South Korea: 2, World Ranking: 461
Sogang University Ranking in South Korea: 3, World Ranking: 547
Pusan National University Ranking in South Korea: 4, World Ranking: 631
Korea University Ranking in South Korea: 5, World Ranking: 642

Salary Data

Average Salary of Jobs (Per Month):

Job Title Average Salary Range (KRW) Average Salary Range (USD)
Finance Manager 4,020,000 - 13,500,000 3,384.58 - 11,366.12
Front-End Developer 1,630,000 - 5,200,000 1,372.35 - 4,378.06
Back-End Developer 2,890,000 - 4,920,000 2,433.19 - 4,142.32
Data Scientist 1,820,000 - 5,810,000 1,532.32 - 4,891.64
UI/UX Designer 1,790,000 - 5,260,000 1,507.06 - 4,428.58
Product Owner 2,840,000 - 8,350,000 2,391.10 - 7,030.16
Retail Sales Manager 2,540,000 - 8,100,000 2,138.52 - 6,819.67

For Professionals working in the tech sector, 29% expect a 1-3% annual salary increment, 38% expect a 4-6% increase while 17% expect a 7-10% increase.

Talent Sourcing Tips

Taxes

Employer Payroll Tax

Type of TaxContribution (%)Notes
National Pension5%The monthly contributions are capped at KRW218,700 a month.
Employment Insurance1.05%-1.65% 
Industrial Accident Insurance0.73%-18.63% 
National Medical Insurance3.68%There is an income ceiling of KRW99.62 million per month for the monthly contributions.

Link to Employer Payroll Tax.

Employee Payroll Tax

Type of TaxContribution (%)Notes
National Pension4.5%The monthly contributions are capped at KRW218,700 a month.
National Medical Insurance3.68%There is an income ceiling of KRW99.62 million per month for the monthly contributions.
Employment Insurance0.8% 

Link to Employee Payroll Tax.

Employee Monthly Income Tax

Income Group (KRW)Contribution (%)
≤ 1,000,0006.6%
1,000,000 – 3,833,333.3316%
3,833,333.33 – 7,333,333.3326.4%
7,333,333.33 – 12,500,00038.5%
12,500,000 – 25,000,00041.8%
25,000,000 – 41,666,666.6744%
> 41,666,666.6746.2%

South Korea follows a progressive income tax model. Link to Employee Income Tax.

Minimum Wage & Payroll

Minimum Wage

The minimum wage is 8,950 KRW per hour.

Payroll Cycle

Employees are paid monthly.

Bonus

13th Month Salary

Not mandatory.

Working Hours & Statutory Leave

Maximum working hours

The average full time working hours is 40 hours a week or 8 hours a day.

The maximum working hours is 52 hours a week.

Overtime pay

The maximum weekly overtime is 12 hours.

Working after 10 pm is paid 200% of hourly salary, and each additional working hour beyond 40 hours a week or 8 hours a day is paid 150% of hourly salary.

Public Holidays

The public holidays can be found here.

Leaves

Annual Leave
Years of Employment Number of Annual Leave
1 11
2 15
≥ 3 15+1 day leave every 2 years of employment (max 25)

Sick Leave

No paid leave.

Only sick leave due to work-related injury must be paid by the company.

Parental Leave

Maternity Leave

90 days maternity leave

  • If the business is small, first 60 days are paid by the government (up to 2 million won) and the company must pay the remaining salary if the salary is more than 2 million won. The last 30 days is not compulsory to be paid.
  • If the company is large, the first 60 days is paid by the company and the last 30 days (up to 2 million won) is paid by the government.
Paternity Leave

10 days of paid paternity leave, of which 5 days is paid by the company and the remaining by the government. They may request for unpaid paternity leave of up to 90 days from the day of the child’s birth.

Parental Leave

Government-paid parental leave of up to 1 year until the child reaches the age of 8.

Work-injury Leave

Employees are entitled to 70% of monthly salary for 3 months

Offboarding & Termination

Termination Process

The termination process is relatively simple.

The termination notice should be in writing and include the reasons for the termination.

Where employment rules provide for a particular process for dismissal (e.g disciplinary committee hearing), if not followed, the termination may be invalid.

Notice Period

30 days advance notice of termination or 30 days pay in lieu of notice. However, notice may not be required if the company is unable to continue business, or the employee has committed intentional misconduct or omission that has a serious implication on the company’s business or operation, or the employee has worked for <3 months.

Severance Pay

For full-time employees, the severance pay is equal to 1 month’s salary for each year of employment if they are employed for at least 1 year and have worked for >15 hours per week or >60 hours per month.

Alternatively, with the consent of the employee, the company may set up a retirement pension system.

Probation period

Not mandatory. However, most organisations offer a maximum of 3 months of probation.

Employee Benefits

Insurance

The Worker's Compensation and Welfare Service is in charge of employment insurance. It encourages vocational training and provides financial security while the insured seeks new employment.

Both the employer and the employee are covered by benefits and coverage. In most cases, the employer applies for employment insurance on behalf of their employees, and this must be done within 14 days of the employee's first day on the job. Self-employed people can also apply for employment insurance.

However, there are two exceptions to employment insurance: those over 65 and those working fewer than 15 hours a week (60 hours per month). Employment insurance is not available to foreigners who do not have a foreign registration card.

Employee Stock Ownership Plan (ESOP)

It is a common practice for companies in South Korea to offer stock options to their employees. Most large-sized companies adopt share plans for their employees via Employee Share Ownership Associations (ESOAs).

Small and mid-sized companies usually give share options as a part of the employees’ compensation under the Special Act on Promotion of a Venture Company of Korea.

VAT

South Korea levies a standard rate of 10%

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