Korea · Hiring guide
Korea Hiring guide
Strong IT/manufacturing and talent; but statutory severance (toejikgeum, ~1 month/year) is a hard cost, dismissal needs a just cause, and the four major insurances cost employers ~10–11%. Hiring is shaped by strong labor protection.
What it costs
what one hire really costsStatutory severance (퇴직금) is a hard cost — from 1 year, every year of service = 30 days’ average pay, payable within 14 days of leaving. Firms often miss it: it effectively adds ~one month’s pay per year.
How hard
can you get in and out?- advanced IT/manufacturing, strong talent
- four insurances ~10–11% employer
- 3-month probation by custom (90% pay allowed)
- just cause + 30 days notice
- statutory severance 30 days’ avg pay per year
- unfair dismissal can go to the Labor Commission
- Needs a "just cause" (disciplinary or managerial) — a fairly high bar.
- Managerial layoff (adjustment dismissal) needs: urgent business necessity + efforts to avoid dismissal + fair, reasonable selection + 50 days’ prior consultation/notice to the union/labor side.
- Firms with 5+ employees are fully covered by Labor Standards Act dismissal limits.
- 1.Confirm a just cause and keep evidence; managerial layoffs run the 50-day consultation.
- 2.30 days’ written notice, or pay 30+ days’ wage (dismissal-notice allowance).
- 3.Pay the statutory severance toejikgeum (within 14 days of exit), settle unused leave.
- 4.Unfair dismissal → Labor Commission claim, often ordering reinstatement + back pay.
Statutory severance (toejikgeum) = 30 days’ average wage × each year of continuous service (from 1 year), paid within 14 days of exit; or a retirement pension (DB/DC).
Example: Wage ₩3,000,000, 4 years: toejikgeum ≈ 30 days’ average wage × 4 ≈ 4 months ≈ ₩12,000,000 (paid within 14 days of exit).
- Toejikgeum is a must-pay hard cost: ~1 month’s wage accrues per year, so hiring builds a liability from day one.
- Unfair dismissal → the Labor Commission often orders reinstatement + back pay, a high cost.
- Managerial layoffs have a strict procedure (50-day consultation + 4 requirements) — no layoffs at will.
Source: Labor Standards Act · Employee Retirement Benefit Security Act
Supporting detail
How to start
first stepsWhat bites you
what others got wrong- Toejikgeum is a must-pay hard cost: ~1 month’s wage accrues per year, so hiring builds a liability from day one.
- Unfair dismissal → the Labor Commission often orders reinstatement + back pay, a high cost.
- Managerial layoffs have a strict procedure (50-day consultation + 4 requirements) — no layoffs at will.
FAQ
What’s the all-in employer cost of one hire in Korea?
For a local employee on ₩3,000,000/month, employer monthly cost is about ₩3,318,000 (overhead +10.6%), ~₩39,816,000 annualized. Use the calculator for your actual wage.
How are employer social contributions paid in Korea?
4 insurances; pension 9% + health 7.09% + LTC + employment + WC; employer ~10–11%
How much is severance for dismissal in Korea?
Needs a just cause + 30 days’ notice (or 30 days’ wage); plus statutory severance toejikgeum = 30 days’ average wage/year of service (from 1 year), paid within 14 days of exit. Unfair dismissal can be ordered reinstatement + back pay by the Labor Commission.
How much do employers pay for the four major insurances in Korea?
~10–11%: National Pension 4.5% + health ~3.5% (+ long-term care) + employment ~1.15% + workers-comp ~0.7%. Employees also pay income tax (progressive) + ~10% local income tax.
Deeply researched and verified against official bodies, auto-updated; rates and processes are for reference — for major decisions rely on each country’s authorities and local counsel.