Employer of Record in South Korea: 2026 Cost and Compliance Guide

South Korea combines a highly skilled workforce in Seoul, Pangyo and Busan with strong technology, gaming, manufacturing and consumer markets. Employer costs are moderate by OECD standards, but they come in several parts: four social insurances (pension, health with long-term care, employment and industrial accident insurance), a small wage claim guarantee levy, and severance pay of a month's wages for each year of service.

The Korea-specific issue is structure. Supplying workers to another company that directs their work is worker dispatch, which only licensed agencies may do, only for jobs listed by decree, and generally for no more than two years. Break the rules and the client can be required to employ the worker directly.

This guide covers costs, the dispatch rules that shape EOR arrangements, the main employment rules, provider comparison and when to set up your own company. Figures link to official sources. We do not test or use the providers listed; see our methodology.

An Employer of Record in South Korea employs staff on behalf of foreign businesses: it signs the employment contract in its own name, enrols the employee in the four social insurances, runs payroll and withholding, and handles leave, severance and termination.

Because your business directs the day-to-day work, Korean law can treat the arrangement as worker dispatch (geullo-ja pagyeon). Dispatch requires a licence from the Minister of Employment and Labor, is allowed only for jobs listed by Presidential Decree (and never for direct production work in manufacturing), and is generally capped at two years for the same worker.

Ask each provider whether it employs your hire as a licensed dispatch agency, which listed job the role falls under, and what happens when the two-year limit approaches.

Korea's Act on the Protection of Temporary Agency Workers regulates worker dispatch: an agency employs a worker and sends them to work for a client under the client's direction. Running a dispatch business needs a licence from the Minister of Employment and Labor, and clients may not use workers from an unlicensed agency.

Dispatch is allowed only for jobs listed by Presidential Decree, chosen for their specialist knowledge, skills or nature, and never for direct production work in manufacturing. Some work, such as construction sites and hazardous work, is always excluded. Separately, dispatch for any job is allowed to cover absences (such as childbirth, illness or injury) or a temporary or intermittent need, the latter for up to three months, extendable once by three months.

For listed jobs, a dispatch may last one year, extendable by agreement to a total of two years (longer for older workers). If the client uses a dispatched worker beyond these limits, in a job that isn't permitted, or from an unlicensed agency, it must employ the worker directly unless the worker objects.

What to ask an EOR

Korean employment cost has five layers: gross salary, the employer's share of pension, health, long-term care and employment insurance, employer-only industrial accident insurance and the wage claim guarantee levy, severance pay accruing at a month's wages a year, and the EOR fee.

Rates below are for 2026. The employment stability rate depends on the employer's size and the industrial accident rate on its industry; the defaults are an employer with fewer than 150 workers in professional services.

Annual cost at example salaries

What these figures include and exclude

• The pension ceiling of ₩6,590,000 a month applies from July 2026 to June 2027, so above about ₩79 million a year the pension cost stops rising.
• The employment stability rate rises with the employer's total Korean workforce, from 0.25% (under 150 workers) to 0.85% (1,000 or more). Industrial accident rates are set by industry each year; the defaults here are for professional services.
• Severance becomes payable once an employee has a year of service. Many employers fund it through a defined benefit or defined contribution retirement pension plan.
• Employee contributions (pension 4.75%, health 3.595%, long-term care 0.4724%, unemployment 0.9%) and income tax are deducted from pay and are not employer costs.

Estimate your own cost

Enter a salary to see the estimated annual cost, including mandatory employer contributions and an EOR fee. Change the fee to match the quotes you receive. For worked examples at four salary levels, see cost to hire an employee in South Korea.

Korean employment law is mainly set by the Labor Standards Act, which applies in full to workplaces with five or more regular employees, together with separate acts on retirement benefits, fixed-term work and worker dispatch.

Scope of the Labor Standards Act

The Labor Standards Act applies to every business or workplace that regularly employs five or more employees. For workplaces with four or fewer, only some provisions apply, as set by Presidential Decree.[10]

Working hours

Working hours may not exceed 40 a week and 8 a day, excluding breaks. By agreement, they can be extended by up to 12 hours a week.[10]

Overtime, night and holiday pay

Overtime and night work (10 p.m. to 6 a.m.) are paid at least 50% on top of ordinary wages. Holiday work is paid at least 50% extra for up to 8 hours and 100% extra beyond 8 hours.[10]

Weekly paid holiday

Employees get at least one paid holiday a week on average, given to those who worked all their scheduled days that week.[10]

Public holidays

Workplaces with five or more employees must give the public holidays in the Regulation on Holidays of Government Offices (other than Sundays) as paid holidays, plus substitute holidays. Under the regulation as amended with effect from May 2026, these are 1 January, the three days of Seollal, 1 March, Buddha's Birthday, Labour Day (1 May), Children's Day (5 May), Memorial Day (6 June), Constitution Day (17 July), Liberation Day (15 August), the three days of Chuseok, 3 October, Hangul Day (9 October) and Christmas, plus national election days.[11]

A written agreement with employee representatives can substitute another working day.

Annual leave

Employees who attend at least 80% of a year get 15 days' paid leave. In the first year, they get one day for each full month worked. From the third year, one day is added for every two years of service after the first, up to 25 days.[10]

Dismissal

An employer may not dismiss an employee without justifiable cause, and must give the grounds and timing of dismissal in writing; a dismissal without written notice has no effect. Dismissal for managerial reasons needs an urgent managerial necessity, efforts to avoid it, fair selection criteria and 50 days' consultation.[10]

Notice of dismissal

At least 30 days' notice, or at least 30 days' ordinary wages instead. This doesn't apply to employees with less than three months' continuous service, among other exceptions.[10]

Severance pay

Employers must set up a retirement benefit scheme for employees with a year or more of service working 15 or more hours a week. Severance pay is at least 30 days' average wages for each year of service; under a defined contribution plan, the employer pays at least one twelfth of annual wages each year.[12]

Fixed-term contracts

Fixed-term employees can be used for up to two years in total, including renewals. An employee kept on beyond two years without a legal exception is treated as employed on an open-ended contract.[13]

Worker dispatch (EOR relevance)

Only agencies licensed by the Minister of Employment and Labor may dispatch workers, only to jobs listed by Presidential Decree (excluding direct production work in manufacturing), for up to one year, extendable to two years in total. A client that breaks these limits must employ the worker directly, and dispatched workers may not be treated less favourably than comparable employees.[14]

Minimum wage

₩10,320 an hour from 1 January 2026, or ₩2,156,880 a month for a 40-hour week (209 hours including the paid weekly holiday). It applies to all businesses alike. It rises to ₩10,700 an hour (₩2,236,300 a month) on 1 January 2027.[8]

• From 1 January 2027

  Korean national pension rate rises to 10%

  Employer cost rises by 0.25% of pay up to the pension ceiling: at most ₩197,700 a year per employee at the ₩6,590,000 monthly ceiling.

• From 1 January 2027

  Korean minimum wage rises to ₩10,700 an hour

  Check junior salaries and part-time pay close to the minimum.

• Effective 1 July 2026

  Korean pension income ceiling rises to ₩6,590,000 a month

  For employees earning above the old ceiling, the employer pays up to ₩10,450 a month more.

• Effective 1 January 2026

  Korean wage claim guarantee levy rises to 0.09%

  A small increase: ₩18,000 a year on a ₩60 million salary.

See every country in the employment law changes tracker.

These EOR providers publish South Korea pages and starting prices that apply across their country coverage. Prices are their own published starting rates in USD, from our pricing tracker.

In South Korea, ask whether the provider holds a worker dispatch licence, which permitted job your hire falls under, and how it handles the two-year limit.

Compare providers for South Korea

• RemoFirst vs PlayrollIn South Korea: US$199 vs US$399 a month (published starting prices).
• Remote vs Globalization PartnersIn South Korea: US$599 vs US$599 a month (published starting prices).
• Deel vs Globalization PartnersIn South Korea: US$599 vs US$599 a month (published starting prices).
• Deel vs RemoFirstIn South Korea: US$599 vs US$199 a month (published starting prices).

For each provider's products, pricing model and fit signals, see the EOR provider directory.

The usual alternatives are a Korean subsidiary company or a registered branch of your foreign company. Employing directly removes the dispatch question: your own entity is the employer and directs the work.

Running costs include accounting, payroll and social insurance administration, tax filings and registered office costs.

For a step-by-step version of this calculation, see EOR vs local entity: a break-even framework.

1. 1

   Define the role and salaryDay 0

   Agree the annual gross salary, working hours, and whether the role is temporary or long term.

2. 2

   Check the legal basis1–2 days

   Ask the provider about its dispatch licence, the permitted job the role falls under, and the plan for the two-year limit.

3. 3

   Compare itemised quotes1–3 days

   Request Korean quotes covering the fee, the four social insurances, the wage claim levy, severance funding and offboarding. Use the estimator to sanity-check totals.

4. 4

   Sign the commercial agreement

   Review the legal basis, liability if the client must employ the worker directly, severance on exit, IP assignment and personal data protection.

5. 5

   Contract and enrolment1–2 weeks

   The provider issues the employment contract and enrols the employee in the four social insurances.

6. 6

   Ongoing administrationMonthly

   Monthly payroll and withholding, social insurance payments, annual leave records and severance funding.

Rates and rules on this page are based on the following official sources. Numbers in brackets in the tables above link to these entries.

1. 1
   국민연금법 (National Pension Act) art. 88 and addenda art. 4

   Ministry of Government Legislation (law.go.kr)

   Employer contribution of 4.75% of standard monthly income in 2026, 5.00% in 2027, rising by 0.25 points a year to 6.5% from 2033.

2. 2
   국민연금 · 기초연금 급여 올해 2.1% 인상 확정 (2026 pension ceiling)

   Ministry of Health and Welfare

   Standard monthly income ceiling rises from ₩6,370,000 to ₩6,590,000 and floor from ₩400,000 to ₩410,000 from July 2026.

3. 3
   국민건강보험법 시행령 (National Health Insurance Enforcement Decree) art. 44; Act art. 76

   Ministry of Government Legislation (law.go.kr)

   Health insurance rate of 7.19% (719/10,000) for employees, split equally between employer and employee.

4. 4
   노인장기요양보험법 시행령 (Long-Term Care Insurance Enforcement Decree) art. 4

   Ministry of Government Legislation (law.go.kr)

   Long-term care insurance rate of 0.9448% (9,448/1,000,000) from 1 January 2026, collected with health insurance and split in the same way.

5. 5
   고용산재보험료징수법 시행령 (Insurance Premium Collection Enforcement Decree) art. 12

   Ministry of Government Legislation (law.go.kr)

   Unemployment benefit rate 1.8%, half paid by the employee (Act art. 13); employment stability and skills development rate 0.25%, 0.45%, 0.65% or 0.85% by employer size.

6. 6
   2026년 평균 산재보험료율 올해 수준(1.47%) 유지 (2026 industrial accident rates)

   Ministry of Employment and Labor

   MOEL notice of 31 December 2025: rates by industry (for example 6/1,000 for professional services, 8/1,000 for business support services, 5/1,000 for finance), 0.6/1,000 for commuting accidents, average 1.47%.

7. 7
   임금채권보장기금 사업주 부담금비율 (MOEL notice 2025-100)

   Ministry of Employment and Labor

   Employer levy of 0.9/1,000 of total pay for all industries from 1 January 2026.

8. 8
   2026년 적용 최저임금 시간급 10,320원

   Ministry of Employment and Labor

   Minimum wage of ₩10,320 an hour for 2026, ₩2,156,880 a month on 209 hours, for all businesses.

9. 9
   2027년도 적용 최저임금 시간급 10,700원

   Ministry of Employment and Labor

   Minimum wage of ₩10,700 an hour from 1 January 2027, ₩2,236,300 a month on 209 hours.

10. 10
    근로기준법 (Labor Standards Act)

    Ministry of Government Legislation (law.go.kr)

    Scope (art. 11), dismissal (arts. 23, 24, 26, 27), working hours (arts. 50, 53), holidays (art. 55), premiums (art. 56) and annual leave (art. 60). English translation on elaw.klri.re.kr.

11. 11
    관공서의 공휴일에 관한 규정 (Regulation on Holidays of Government Offices) art. 2

    Ministry of Government Legislation (law.go.kr)

    Public holidays as amended on 30 April 2026 (in force from 1 May, and for national holidays from 11 May 2026), including Labour Day and all national holidays under the National Holidays Act; applied to private employers by the Labor Standards Act Enforcement Decree art. 30.

12. 12
    근로자퇴직급여 보장법 (Act on the Guarantee of Employees' Retirement Benefits)

    Ministry of Government Legislation (law.go.kr)

    Retirement benefit scheme required for employees with a year's service and 15+ weekly hours (art. 4); severance of 30 days' average wages per year (art. 8); DC contributions of at least 1/12 of annual wages (art. 20).

13. 13
    기간제 및 단시간근로자 보호 등에 관한 법률 (Fixed-Term and Part-Time Employees Act) art. 4

    Ministry of Government Legislation (law.go.kr)

    Two-year limit on fixed-term employment, after which the employee is treated as open-ended, with listed exceptions.

14. 14
    파견근로자 보호 등에 관한 법률 (Act on the Protection of Temporary Agency Workers)

    Ministry of Government Legislation (law.go.kr)

    Permitted jobs (art. 5), dispatch periods (art. 6), direct employment obligation (art. 6-2), licensing (art. 7) and equal treatment (art. 21).

South Korea's statutory employer costs are moderate: about 10.7% for the four social insurances and levies in 2026, plus severance of a month's wages a year, so roughly 1.19× salary before the EOR fee.

The bigger question is structure. Korea's dispatch rules limit EOR-style arrangements to licensed agencies, listed jobs and generally two years, after which the client may have to employ the worker directly. Ask any provider about its licence and the permitted job, and for a long-term role plan to employ through your own entity.

For a long-term team, compare an EOR against your own company with our EOR vs local entity guide. For other Asia-Pacific markets, see Japan, Singapore and the Philippines.