Employment Cost Calculator for South-Korea
Calculate the total cost of employing someone in South-Korea, including taxes, benefits, and our management fee.
Employer Tax Contributions
| Tax Type | Rate | Base |
|---|---|---|
| National Pension | 4.5% (employer share) | Monthly Salary (capped at KRW 6,170,000) |
| National Health Insurance | 3.545% (employer share) | Monthly Salary |
| Employment Insurance | 1.15%-1.75% (employer share, depending on industry) | Monthly Salary |
| Industrial Accident Compensation Insurance (IACI) | 0.644%-18.6% (employer paid, depending on industry/risk) | Monthly Salary |
Filing & Compliance
- Monthly withholding tax and social insurance contributions are typically due by the 10th of the following month.
- Employers must complete year-end tax settlement for employees by the end of February each year.
- Payment records (like income statements) for employees must be filed with tax authorities by March 10th following the tax year.
In South Korea, employees are subject to various tax deductions, impacting their net income. These deductions fund social security programs and other government initiatives.
Income Tax
Income tax is a progressive tax, meaning higher earners pay a larger percentage of their income in tax. Foreign workers have the option of a flat 19% income tax rate for up to 20 years, forgoing other deductions. As of 2025, general employees and daily workers follow separate deduction guidelines. Those earning below a certain threshold are exempt from filing a tax return. Specific progressive tax rates and thresholds are adjusted annually, so it is advisable to consult the latest National Tax Service guidelines for specific figures.
Social Security Contributions
- National Pension (NP): Employees contribute 4.5% of their salary, matched by their employer for a total of 9%. The monthly contribution is capped at KRW 277,650 (as of July 2024 - June 2025), based on a monthly salary ceiling of KRW 6,170,000.
- National Health Insurance (NHI): Both employees and employers contribute to NHI. Specific contribution rates vary based on income and are subject to annual revisions.
- Employment Insurance (EI): Employees and employers contribute to EI, providing benefits in case of unemployment. Rates are subject to change.
- Workers' Compensation Insurance (WCI): Employers are solely responsible for WCI contributions, covering work-related injuries or illnesses. Rates vary based on industry risk factors.
Other Deductions
- Year-end Tax Settlement: All foreign employees (excluding daily workers) must complete their year-end tax settlement by the end of February. This process reconciles taxes withheld throughout the year with the final tax liability, leading to either a refund or additional payment.
- Deductions and Allowances: Various deductions, allowances, and credits are permitted, including an earned income deduction, credits for qualifying medical expenses, certain educational expenses, and certain charitable donations. Specific details on eligible expenses and deduction limits are subject to change and should be verified.
- Special Deductions for Foreigners: Foreign engineers and researchers may qualify for a 50% income tax reduction for ten years. Some foreign teachers and professors may also be exempt from certain taxes. Eligibility criteria for these deductions should be confirmed with relevant authorities.
Note: This information is current as of February 5, 2025, and may be subject to change. Always refer to the official National Tax Service (NTS) publications and guidelines for the most up-to-date and accurate information.
