South-Korea

Understanding market competitive salaries is crucial for both employers and employees in South Korea. It ensures employers attract and retain top talent, while employees secure fair compensation for their skills and experience. This guide explores key factors influencing competitive salaries in South Korea.

Factors Affecting Market Competitive Salaries

Several factors influence what constitutes a competitive salary in South Korea:

• Job Title and Industry: Different industries and job titles have varying salary ranges. For instance, the average marketer earns around ₩55,111,388 annually, while a secondary school teacher makes an average of ₩3,090,000.
• Experience and Skills: Employees with more experience and specialized skill sets typically command higher salaries.
• Education: Educational attainment can play a role, though its influence might vary depending on the industry.
• Location: Salaries often differ geographically. Seoul, the capital, generally offers higher salaries compared to other regions.
• Company Size: Multinational corporations or larger domestic companies may offer more competitive salaries compared to smaller firms.

Researching Competitive Salaries in South Korea

When researching competitive salaries in South Korea, consider using reputable resources that provide salary surveys and compensation analysis for various positions. These resources offer salary information based on job titles, locations, and company sizes in South Korea. They also offer insights into average salaries and salary ranges in South Korea, including breakdowns by industry and location.

South Korea has a national minimum wage established by the Minimum Wage Act. This act outlines the regulations for employers and employees regarding minimum wage.

Determining the Minimum Wage

The Minister of Employment and Labour determines the minimum wage annually by August 5th. This decision is based on proposals from the Minimum Wage Commission. The commission considers several factors, including the cost of living for workers, wages of similar workers in other industries, labor productivity, and the ratio of worker compensation to national income. The minimum wage may be set on an hourly, daily, weekly, or monthly basis. There are also different rates established for trainees, contractors, and piece-rate workers.

Employer Obligations

The Minimum Wage Act requires all employers, except for those with specific exemptions outlined in the Act, to pay their employees at least the minimum wage. Employers cannot reduce existing wages to meet the minimum wage increase or include the minimum wage in any calculations to justify lower wages. If an existing labor contract specifies a wage below the minimum wage, the wage clause becomes null and void. The employee is legally entitled to receive the minimum wage amount.

Current Minimum Wage

The current minimum wage in South Korea is ₩9,860 per hour, effective January 1, 2024.

In South Korea, employers often offer a variety of bonuses and allowances to attract and retain talent, which can significantly impact an employee's total compensation package.

Common Bonuses

• Performance Bonus: A performance-based bonus is a common incentive in South Korea, typically awarded annually based on individual or company performance. The amount can vary depending on the industry, company size, and individual performance metrics.

• Year-End Bonus (Yong-End Bonus): Year-end bonuses are a widespread practice in South Korea, often referred to as "Yong-End Bonus." The amount can be substantial, sometimes exceeding several months' salary. It may be influenced by factors like company profitability, employee performance, and tenure.

• Signing Bonus: Signing bonuses are becoming increasingly common in South Korea, particularly for in-demand skills or attracting experienced professionals.

Allowances

• Meal Allowance: Many companies in South Korea provide a meal allowance to help offset employees' lunch expenses. This can be a fixed daily or monthly amount or a meal voucher system.

• Transportation Allowance: Companies might offer a transportation allowance to cover commuting costs. This could be a fixed amount or reimbursement for public transportation expenses.

• Housing Allowance: Housing allowances are less common but can be offered by companies in areas with a high cost of living or to attract employees relocating for work.

• Overtime Pay: South Korea has mandated regulations for overtime pay, typically at a higher rate than regular wages. This can be a significant source of additional income for employees who work long hours.

In South Korea, the payroll system adheres to specific regulations and common practices. The dominant payroll cycle is monthly, with employees typically receiving their salaries on the last working day of the month.

There's no legal mandate for a specific pay frequency in South Korea. However, companies must ensure timely payments as per their employment contracts.

Unlike some countries, South Korea doesn't have legislation requiring a mandatory 13th-month payment for employees.

Frequency

• Monthly Cycle: Employees typically receive their salaries on the last working day of the month.

Legality

• Companies must ensure timely payments as per their employment contracts.

Additional Considerations

• South Korea doesn't have legislation requiring a mandatory 13th-month payment for employees.