Employer of record in South Korea: costs, rules and how to hire

Three of the rows below moved during 2026 and one moves again in 2027, which makes the effective dates as important as the rules themselves.

Resolve these points before the offer

Ask the provider to answer each of these against the actual role, workplace and person.

On workplace size, the Labor Standards Act generally applies to workplaces regularly employing at least five workers, with some protections applying to smaller workplaces too. Statutory annual leave, the ordinary working-time limits, premium pay and unfair-dismissal protections each need a specific coverage check, and one hire through a larger provider does not automatically make the relevant workplace a one-worker business.

On shared duties, the agency statute divides the employment obligations between the agency and the user business, so the client can have working-time, rest, maternity and safety responsibilities and can share wage liability in specified circumstances. Put the assignment's work, location, period, hours and responsibilities in writing and check the covered equal-treatment duties against comparable client employees.

Two dated items to build into a plan. From 18 September 2026, the announced changes allow spouse childbirth leave to begin within 50 days before the expected birth, introduce five days of leave for a spouse's miscarriage or stillbirth with the first three paid, and add parental leave for an employee whose pregnant spouse faces specified miscarriage or premature-birth risks. Those are future rules at this guide's 14 September review date.

Separately, the labour ministry has set the 2027 minimum wage at KRW10,700 an hour, equivalent to KRW2,236,300 on the official 209-hour monthly basis, applying from 1 January 2027. Keep the 2026 rate in current payroll until the applicable date, and check any offer or budget that runs into the new year.

Give the employee written or electronic terms covering the wage components, the calculation and payment, the agreed hours, the holidays and the annual leave, including relevant changes, and identify the actual employer, the role, the work location, the duration and the benefits. A bilingual contract can help the employee and an overseas client read the same agreement, and the local requirements should be checked before signing.

Put the employment and assignment terms in writing

The agency statute divides the employment duties between the agency and the user business, so the client can have working-time, rest, maternity and safety responsibilities and can share wage liability in specified circumstances. Put the assignment's work, location, period, hours and responsibilities in writing, and check the covered equal-treatment duties against comparable client employees.

Fixed terms and probation

Covered fixed-term employment is generally limited to two years including successive contracts, and continuing beyond that normally creates indefinite employment unless an exception applies, such as a defined project, absence cover or a qualifying specialist category. Comparable treatment and additional written terms also matter, and the rule is a two-year limit rather than a limit of one renewal.

Agree a reasonable probation period and assessment process in the contract, remembering that the Labor Standards Act continues to apply and probation is no general exemption from employment rights or the covered just-cause requirements. The notice exception for service under three months does not create a universal three-month statutory probation period, and any proposed minimum-wage reduction needs checking separately.

Workplace rules and changes to terms

Employers regularly using at least ten workers must prepare and report rules of employment covering the required subjects, with changes requiring the relevant employee or union consultation and changes unfavourable to workers generally needing consent. Check those rules, any collective agreements and the individual contract before changing pay, benefits or working arrangements.

Confidentiality and work product

Ask the provider to explain how confidentiality, intellectual-property ownership and any assignment to your business are documented, have role-specific restrictions checked for enforceability, and agree the access removal and return of information at the end. The EOR service description establishes no automatic transfer of rights to the client.

Misclassification risk, and the definition of a worker

Korea's statutory definition is short and it does not care what you call the arrangement. The Labour Standards Act defines a worker by providing work for wages, regardless of occupation, so the actual working relationship has to be assessed before choosing a contractor contract for someone who will function as your employee. Source: the approved Korean contractor guidance, Labour Standards Act via law.go.kr, checked 18 September 2026.

"Regardless of occupation" closes the door that hirers usually try: the idea that a senior or specialist role is somehow outside the definition. It is not. Calling the person a freelancer does not settle employment status or remove the payroll and employment obligations that come with it. Source: the approved Korean contractor guidance, checked 18 September 2026.

What a hirer does about it: have the relationship assessed before the engagement, and where the person will work for wages under your direction, employ them. The exposure in Korea is not only wage claims, it is the accrued severance and the insurance contributions that would have been due, which is why the arrangement gets more expensive to fix the longer it runs. There is one Korean consequence I can now quote, and it is the one that bites an arrangement run through an intermediary: where a business fails to directly employ a dispatched worker in breach of the direct-employment obligation, an administrative fine of up to 30 million won is imposed on it. Source: Act on the Protection of Dispatched Workers, articles 6-2 (1) and 46 (2), law.go.kr, checked 18 September 2026. That is a rule about unlawful worker dispatch rather than about contractor status as such, so read it as the adjacent exposure it is: the obligation it enforces is an obligation to employ the person yourself, which is the same outcome a misclassification finding produces. I have not found a Korean government source setting out a penalty schedule for misclassification itself, so I am not quoting one.

Korean social insurance is four schemes plus an employer-only charge that varies with the size and category of the employing business, so the employer rate depends on the provider as much as on the employee.

Individual income-tax bands

The national marginal rates apply to annual taxable income after the relevant deductions, with local income tax and credits assessed separately.

Local income tax is generally 10% of the national income-tax amount, and deductions and credits affect the calculation, so these are not flat percentages of anyone's gross salary.

An eligible foreign employee can elect the special 19% national flat tax, with local tax normally taking the combined rate to 20.9%, instead of the ordinary progressive calculation. The regime has first-work-date and other conditions and can apply over a qualifying 20-year period, and it does not allow the usual deductions and credits on top, so have payroll compare the actual alternatives rather than assuming the flat rate is better.

Payroll deadlines and business taxes

The employer withholds income tax through payroll and normally pays it by the tenth of the following month, with employment-income year-end settlement generally made with the following February payroll and the applicable reporting by 10 March. Set up the employee's declarations and supporting information before calculating the final liability.

For business years beginning from 1 January 2026, the standard national corporate income-tax schedule uses marginal rates of 10%, 20%, 22% and 25%, with local corporate tax and special categories assessed separately, and standard VAT is 10% subject to exemptions and zero-rating. Those are not employee salary deductions, and an EOR contract settles nothing about your own business's Korean tax exposure.

Retirement benefits are separate from National Pension

This is the item to budget for from the first month. Qualifying employees with at least one year's service and an average of at least 15 hours a week over four weeks must be covered by a retirement-benefit arrangement, and under a retirement-allowance scheme the minimum is 30 days' average wages per year of continuous service. It can be due on resignation as well as dismissal, so it is not a redundancy payment.

Under a defined-contribution retirement pension the employer contributes at least one-twelfth of annual wages, with statutory funding and payment deadlines, as an alternative way of providing the retirement benefit rather than an extra charge on top of a separate full retirement allowance. On termination, benefits normally move to an individual retirement pension account, subject to statutory exceptions.

The 2026 minimum wage is KRW10,320 an hour, with an official monthly equivalent of KRW2,156,880 on a 209-hour basis that includes the paid weekly rest allowance for the standard 40-hour week. That monthly figure is not the right calculation for every working pattern, so check the employee's hours and which payments count towards the floor.

Set the salary and fixed payday

Note the date on the next figure before using it. The labour ministry has set the 2027 minimum wage at KRW10,700 an hour, equivalent to KRW2,236,300 on the official 209-hour monthly basis, applying from 1 January 2027, so keep the 2026 rate in current payroll until then.

For a benchmark, the labour ministry reported average gross monthly earnings of KRW4,094,000 for June 2026 at establishments with at least one regular employee, including regular and temporary or daily workers, in a release published on 27 August 2026. That is a broad average affected by worker mix and bonuses rather than a median or a quote for a particular role.

Wages must generally be paid directly and in full in currency, at least once a month on a fixed date, subject to statutory exceptions. Record the payday and the lawful deductions in the payroll setup, and note that the tenth of the following month is a common remittance deadline for the employer rather than a universal employee payday.

Provide a written or electronic payslip showing the required wage components, the calculation and the deductions, keep the wage ledger and the relevant employment records for at least three years under the Labor Standards Act, and check any longer tax or other retention requirement. Wage claims ordinarily have a three-year limitation period.

Hours, breaks and premium pay

The 52-hour ceiling is the headline, and the premiums underneath it stack.

For workplaces covered by the ordinary working-time rules, hours are generally limited to eight a day and 40 a week excluding breaks, with agreed overtime normally limited to another 12 hours a week for an ordinary total of 52. Flexible schedules and statutory exceptions require a separate assessment, and remote work creates no exemption by itself.

Coverage matters before any of that. The Labor Standards Act generally applies to workplaces regularly employing at least five workers, with some protections applying to smaller workplaces, so statutory annual leave, the working-time limits, premium pay and unfair-dismissal protections each need a specific check rather than an assumption.

Covered overtime generally needs agreement and must stay within the applicable limit, and hours beyond a part-time employee's agreed schedule have their own consent, limit and premium rules even where total hours remain below a full-time week. Check any flexible arrangement with the required employee representatives before using it.

The ordinary minimum break is 30 minutes for four hours of work and one hour for eight hours, provided during working hours, and employees must be free to use it. Record the actual working and rest time rather than treating a period spent working or waiting under the employer's control as a free break.

Covered employees generally receive at least one paid weekly rest day on average, subject to the attendance rules, while employees averaging less than 15 hours a week over four weeks are excluded from the weekly-holiday and annual-leave provisions. A five-day schedule does not automatically make both Saturday and Sunday statutory paid holidays.

Where the premium rules apply, overtime attracts at least a 50% addition to ordinary wages and night work from 22:00 to 06:00 attracts a separate 50% addition, while holiday work carries 50% for the first eight hours and 100% beyond eight. Applicable premiums can overlap, and compensatory leave requires the prescribed written representative agreement and must reflect the premium entitlement.

Korean annual leave accrues monthly in the first year and then annually, which means a first-year hire and a second-year hire follow different rules for the same calendar.

Annual leave and public holidays

At covered workplaces an employee attending at least 80% of the year earns 15 paid annual-leave days, while during the first year one day accrues for each month of full attendance, normally up to 11 days before the first anniversary. From three years' service one extra day is added for each two years beyond the first, up to 25 days overall, and the short-hours exclusion applies throughout.

Annual leave generally expires if unused for one year, with first-year monthly accrual ordinarily running to the first anniversary, though employer fault and the statutory rules on encouraging leave use can change the outcome. Do not forfeit unused pay without following the applicable process, and note that maternity leave, parental leave and specified pregnancy or parental reduced hours count towards attendance under the current rules.

For covered workplaces, prescribed public holidays are paid, with a written employee-representative agreement required for a permitted substituted working day. The 2026 changes restored Constitution Day on 17 July and extended public-holiday status to Labour Day on 1 May with substitute-day rules, though Labour Day already had private-sector paid-holiday protection. Check the annual dates for lunar holidays and any separately designated holidays before setting the work calendar.

Maternity, spouse and parental leave

Korean family leave changed twice in 2026 and changes again on 18 September, so the effective dates matter as much as the entitlements.

Maternity leave is generally 90 days, 100 days for a qualifying premature birth, or 120 days for multiple births, with at least 45 days falling after childbirth or 60 for multiple births, and the employee must return to the same work or work with equivalent pay. Miscarriage and stillbirth leave have separate duration and eligibility rules.

The first 60 days of maternity leave, or 75 days for multiple births, are paid by the employer, reduced to the extent covered by the applicable employment-insurance benefit, with insurance eligibility, limits and employer category affecting the payment arrangement. Do not promise that the employer or the insurance will pay full salary throughout every maternity-leave period.

Pregnant employees cannot be required to work overtime, and qualifying employees in the first 12 weeks or from week 32 can request a two-hour daily reduction without a wage cut, with broader protection for specified high-risk pregnancies. Necessary prenatal examination time is protected, and a nursing employee with a child under one can request two paid breastfeeding periods of at least 30 minutes each day.

As reviewed on 14 September 2026, spouse childbirth leave is 20 paid days to be used within 120 days of the birth, splittable three times for up to four periods, with employment-insurance reimbursement following separate eligibility rules that do not remove the employee's paid-leave entitlement. The changes to pre-birth use take effect on 18 September.

From 18 September 2026 the announced changes allow spouse childbirth leave to begin within 50 days before the expected birth, introduce five days of leave for a spouse's miscarriage or stillbirth with the first three paid, and add parental leave for an employee whose pregnant spouse faces specified miscarriage or premature-birth risks. Those are future rules at this guide's 14 September review date.

Qualifying employees can generally take up to one year of parental leave for a child aged eight or younger or in second grade or below, with a six-month service requirement, and the limit can rise to 18 months where both parents each use at least three months, or for qualifying single parents or parents of a specified disabled child. Leave counts as service, and the statutory leave and the employment-insurance payments are separate entitlements.

Since 20 August 2026, qualifying employees can use one or two consecutive weeks of parental leave once per child each year for specified needs such as school holidays, closures, hospital admission or infectious-disease measures. It comes out of the existing parental-leave balance without using up an ordinary split, and while standard requests need advance notice, listed urgent situations allow a request by the start date.

Qualifying employees with a child aged 12 or younger or in sixth grade or below can request a reduced schedule of 15 to 35 hours a week, with an ordinary entitlement of one year and twice any unused ordinary parental leave potentially added, up to three years overall. Minimum blocks, eligibility, employer exceptions and benefit calculations all need checking, because it is not automatically full salary for reduced hours.

Qualifying family-care leave can reach 90 days a year including up to ten days of short family-care leave, with longer leave generally using blocks of at least 30 days and short leave able to be taken by the day. The covered relatives, the care grounds and the employer exceptions matter, and none of these rights creates an automatic obligation to pay full salary for the absence.

Infertility-treatment leave is six days a year with the first two paid, subject to the statutory process and privacy protections, and the Labor Standards Act also provides one day of menstrual leave per month on request where covered, without requiring that day to be paid. Keep both separate from annual leave and from contractual sickness benefits.

Sickness and other employment benefits

Set out how the employee reports illness, supplies evidence and receives any contractual sick pay in the employment rules or the contract. Do not substitute occupational injury compensation for an ordinary sickness policy or assume the provider's quoted package includes a fixed paid-sick-leave allowance, and check work-related illness and injury separately, including the compensation and the dismissal protection.

Check the contract, the employment rules and any collective agreement for bonuses, allowances, private medical cover and other benefits, explaining the payment conditions and whether each item counts in the applicable wage or insurance base. Not every Korean employee has the same thirteenth-month salary or benefit percentage.