South Korea Country Profile

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Learn more about Korea and the Korean Market

Working Hours

Maximum working hours in Korea is 52 hours a week. Full time job is considered as 40 hours a week. The additional 12 hours are considered as overtime work in should agreed in advance between the employee and employer. The payment for overtime work hour is 50% higher than regular working hour.

Minimum Wage

As of Jan. 2020, the minimum wage stands at 8,590 KRW (around US$7.4) per hour. The minimum wage is applied to all employees in Korea, local or foreign. Based on 209 working hours every month, the monthly wage will be 1,795,310 KRW. From Jan. 2021, the minimum wage will be increased by 1.5% to 8,720 KRW (around US$ 7.58) per hour.

Annual Leave (Paid Holiday)

Employees in Korea are entitled to minimum of 15 days as paid leave for one year of employment. Additional one day of paid leave will be given to employee who has worked for three years on the 4th year of employment. From the 4th year, additional one day of paid leave will be added every two years. The total number of annual leaves with pay shall be limited to 25, unless agreed otherwise with the employer.

Public Holidays

The number of public holidays ranges from 10 to 16 days depending on the year. Those days are: New Year's Day, Seollal, March 1st Movement Day, Children's Day, Buddha's Birthday, Memorial Day, Liberation Day, Chuseok, National Foundation Day, Hangul Day, Christmas Day

Menstruation Leave

A female employee is entitled to one day of menstruation leave per month once requested. Such day is unpaid.

Employment Contract

Drafting an employment contract isn’t always mandatory, but recommended. The contract can be written in English if the employee understands the language. In any case, certain terms of employment such as wage amount, working hours, weekly holidays and other should be in writing. Common employment periods are 3 months, 6 months or 12 months. Employment by contract with a fixed period cannot be longer than 2 years.

Probationary Period

It's allowed to set a Probationary period as part of the employment agreement. The most common practice is to set it for no more than 3 months.

Retirement Pay

Each employee who worked more than 1 year, shall be entitled by the end of the employment period to a Retirement Pay (also called Severance Pay) of 30 days’ average wage for each year of consecutive years of employment. The reason for the retirement or termination of the employment agreement by the employee or the employer does not affect the entitlement to the retirement pay.

Notice of Dismissal

Employer is required to give notice of employment termination at least 30 days in advance for employee who worked more than one year, or pay in lieu of notice. Under the probationary period which not exceeding three months, the notice of dismissal can provided in less than 30 days.

Payroll Tax & Insurances

Four major social insurance schemes currently enforced as a type of social security system. National Health insurance, National Pension insurance, Employment insurance and Industrial Accident Compensation Insurance. The employee and the employer should contribute to these accounts on every paid salary.

Republic of Korea, also known as South Korea is located in Eastern Asia, southern half of the Korean Peninsula. The country territory is surrounded by sea at the east, south and west. At north the country has border with North Korea. South Korea area is 99,720 square kilometre and the population is about 51 million. Out of the total population, 10 million, or roughly 20% of the population, live in Seoul which is a capital of Korea. Other large and financially advanced cities such as Busan (population of 3.5 million), Incheon (2.8 million), Daegu (2.5 million), Daejeon (1.5 million), Gwangju (1.5 million) have a higher population density than other cities in Korea.

The Korean ethnic group accounts for approximately 96% of the total population of the Korean Republic. The official language is Korean which is called 'Hangeul'. All Koreans use the same language. It has been a decisive factor in forging strong national identity.

Religion in South Korea is characterized by Buddhism and Christianity. The freedom of religion selection is guaranteed. As of 2015, 29% of South Korean population is declared as Christian, 23% for Buddhists and the rest (46%) with no religious affiliation.

South Korea was originally agricultural nation and started the industrialization from the 1960s. Korea grew rapidly as say "a miracle of the Han River". Rapid growth over the past 3 decades transformed Korea into the world's 13th largest economy.

Today South Korea is a member country of the OECD and one of the G-20 major economies.

GDP per capita(PPP) of South Korea is US$ 39,400 in 2017. The volume of trade in 2017 is 1,034 billion USD (Export: 577.4 billion USD, Import: 457.5 billion USD), ranks 6th in the world. The unemployment rate of Korea is 3.7% in 2017, ranked 43rd in the world.

Main export products are semiconductors, petrochemicals, automobile/auto parts, ships, wireless communication equipment, flat display displays, steel, electronics, plastics, computers and Main import products are crude oil/petroleum products, semiconductors, natural gas, coal, steel, computers, wireless communication equipment, automobiles, fine chemical, textiles. Main export countries are China (25.1%), US (12.2%), Hong Kong (6.9%), Japan (4.7%) - 2017 est. Main import countries are China (20.5%), Japan (11.5%), US (10.5%), Germany (4.2%), Saudi Arabia (4.1%)– 2017 est.

South Korea is a democratic republic whose president is the head of state and whose prime minister is the head of government. It is a multi-party system.

President Moon Jae-in was elected the 19th president of South Korea on May 10, 2017 by direct vote for a single five-year term. Prime minister is Lee Nak-yeon, and Left-wing political party, Democratic Party, is the ruling party now.

Like many democratic states, South Korea has a government divided into three branches: executive, judicial, and legislative. The executive and legislative branches operate primarily at the national level, although various ministries in the executive branch also carry out local functions. Local governments are semi-autonomous, and contain executive and legislative bodies of their own. The judicial branch operates at both the national and local levels. South Korea is a constitutional democracy

Korea culture was developed on the Confucianism values, therefore it is very hierarchical. Ranking and position are important and should be respected. Because of the hierarchical structure in the companies, written reports are created and hard copy of marketing materials are still very important as part of new business.

Most of Korean companies have vertical structure, so it takes long time to review new project and product or make a decision regarding that.

Koreans do not like to do business with arrogant people and the best way to be respected by them is by showing understanding of their position and point of view.
In addition, "Trust" is important to Korean company to develop business, based on our experience, face-to-face meetings is important in order to build trust and commitment. In the business meeting, Korean prefers to wear a suit (tie isn't a must), and it is very important to exchange business cards. Also most Korean prefers to use the Korean language when performing business, although they are understand English very well. The language barrier is very much connected to the culture and the way parties build trust with each other.

Taxable income bracket		Total tax on income below bracket	Tax rate on income in bracket
From KRW	To KRW	KRW	Percent
-	12,000,000	-	6%
12,000,001	46,000,000	720,000	15%
46,000,001	88,000,000	5,820,000	24%
88,000,001	150,000,000	15,900,000	35%
150,000,001	50,000,000	37,600,000	38%
300,000,001	500,000,000	94,600,000	40%
500,000,001	Over	170,600,000	42%