Under the assumptions below, the first-year cost of hiring one employee in Korea is approximately KRW 36.4 million for a full-time employee paid on an hourly wage basis and KRW 41.6 million for a salaried employee. The key point is that the employer’s burden does not stop at base wages or salary. Additional employee-related costs amount to 68.7% of annual base wages in the hourly-wage example and 32.7% of annual salary in the salaried-employee example. If the business operates night shifts, the total cost can increase significantly, especially when night work overlaps with overtime or holiday work.

Note: Percentages are calculated as a percentage of annual base wages or annual salary, not as statutory contribution rates. Social insurance calculations assume a business with fewer than 150 employees and use an Industrial Accident Compensation Insurance rate applicable to the retail, food service, or accommodation industry, including the 0.06% commuting accident rate. For the hourly wage example, this row assumes 20 hours of overtime per month paid at 150% of the statutory minimum hourly wage.

Hourly Wage Basis

Although hourly wage arrangements are often used for part-time employees, this section focuses on a full-time employee paid on an hourly wage basis. The example assumes that the employee is contracted to work 40 scheduled hours per week and works 20 hours of overtime per month.

• Hourly Wages

The minimum hourly wage in Korea is KRW 10,320 for 2026. In practice, hourly wages often range from KRW 10,320 to KRW 13,000, depending on the type of job. Most part-time employees are paid at or near the minimum wage.

• Weekly Holiday Allowance

If employees are contracted to work 15 hours or more per week on scheduled working days and attend all of those days, a weekly holiday allowance must also be paid under Korean labor law. For a 20-hour-per-week employee, this allowance generally equals an additional 20% of base wages. For example, if you hire someone who agrees to work 14 hours per week, you generally do not need to pay this allowance.

• Premium Pay for Overtime, Night Work, and Holiday Work

Overtime work, night work, and holiday work must generally be compensated with an additional 50% premium on the applicable wage. If an employee works 30 hours in a week despite having contractual working hours of 20 hours, the additional 10 hours are subject to overtime premium pay. Employees who work between 10 p.m. and 6 a.m., or on weekly paid holidays, statutory holidays, or contractual holidays, may also be entitled to premium pay.

From a legal perspective, holidays should be distinguished from ordinary non-working days. In Korea, holiday work premium may apply when an employee works on a statutory holiday, a weekly paid holiday, or a contractual holiday. A statutory holiday refers to a public holiday designated under Korean law. A weekly paid holiday is the paid weekly rest day that must be provided when the employee satisfies the statutory requirements. A contractual holiday is a holiday separately agreed in the employment contract, work rules, or company policy.

By contrast, an ordinary non-working day is simply a day on which the employee is not scheduled to work. Therefore, if an employee is regularly scheduled to work on weekends, weekend work does not automatically qualify as holiday work. Holiday work premium is generally required only if the weekend falls on a statutory holiday, the employee’s weekly paid holiday, or another contractual holiday.

Let’s take an extreme example to make this clearer. Assume an employee is contracted to work eight hours on Monday and eight hours on Tuesday, and Friday is designated as the employee’s weekly paid holiday. If the employee is asked to work an emergency Friday shift from 12 a.m. to 6 a.m., additional premiums may apply for work exceeding contractual hours, night work, and holiday work.

• Paid Annual Leave

This rule generally applies only to businesses with five or more employees. For employees with less than one year of service, employers must generally provide one day of paid annual leave for each month in which the employee has fully attended the scheduled working days. Employees who have completed one year of service are generally entitled to 15 days of paid annual leave.

For part-time employees, paid annual leave is calculated in proportion to the working hours of a full-time employee who works eight hours per day and 40 hours per week. Therefore, for a part-time employee working 20 hours per week, one day of paid annual leave is generally treated as four hours of paid leave.

• National Pension

Employers must bear half of the employee’s National Pension contribution. The employer’s share amounts to 4.75% of monthly wages.

• Other Social Insurance Contributions

In addition to National Pension, employers must also pay the employer-side burden of other social insurance contributions. In this example, the employer-side burden amounts to 6.0774% of monthly wages, consisting of 3.595% for National Health Insurance, 0.4724% for Long-Term Care Insurance, 0.9% for Employment Insurance, 0.25% for the Employment Security and Vocational Skills Development Program, and 0.86% for Industrial Accident Compensation Insurance. The 0.25% rate assumes a business with fewer than 150 regular employees, and the 0.86% rate assumes retail, food service, and accommodation businesses, including the 0.06% commuting accident rate.

• Severance Pay

In principle, an employer must provide severance pay of approximately one month’s average wages when a part-time employee who has worked for more than one year and whose contractual working hours average at least 15 hours per week leaves employment. In practice, however, this may be less common for part-time employees because of their relatively high turnover rate.

Monthly Salary Basis

• Monthly Salary

Average monthly salary levels for employees with a bachelor’s degree and less than one year of work experience are based on data published by the Korean Ministry of Employment and Labor.

According to the data, average monthly salaries vary by enterprise size: KRW 2,610K for firms with 5–29 employees, KRW 2,852K for firms with 30–99 employees, KRW 3,071K for firms with 100–299 employees, and KRW 3,119K for large firms with 300 or more employees.

General managers, who usually have 15 years or more of work experience, are paid nearly twice as much as the employees mentioned above. However, it is important to note that salary levels can vary significantly depending on the industry, the employee’s performance, career background, and other factors.

• Special Bonuses

Employers often pay special bonuses to reward employee performance, celebrate Korean holidays, or provide other forms of additional compensation. According to data published by the Korean Ministry of Employment and Labor, special bonuses as a percentage of salary vary by enterprise size: 8.3% for firms with 5–29 employees, 8.8% for firms with 30–99 employees, 11.8% for firms with 100–299 employees, and 24.2% for large firms with 300 or more employees.

Sources: Ministry of Employment and Labor, Labor Conditions by Employment Type.

• Weekly Holiday Allowance

For monthly-paid employees, weekly holiday allowance is generally included in the monthly salary. Therefore, employers usually do not add a separate weekly holiday allowance on top of the agreed monthly salary. Instead, the key issue is whether the monthly salary, when converted into an hourly rate including paid weekly holiday hours, meets or exceeds the statutory minimum wage. A monthly conversion factor of 209 hours is commonly used for this purpose. This is calculated as 48 paid hours per week, including 40 regular working hours and 8 paid weekly holiday hours, multiplied by approximately 4.345 weeks per month. The 4.345 figure is calculated by dividing 365 days by 7 days and then by 12 months. As a result, the minimum monthly salary for a full-time monthly-paid employee in 2026 is approximately KRW 2.157 million, calculated as the 2026 minimum hourly wage of KRW 10,320 multiplied by 209 hours.

• Premium Pay for Overtime, Night Work, and Holiday Work

These premiums apply in the same way as they do for part-time employees. However, in practice, monthly salaries often include a fixed allowance for overtime, night work, and holiday work, provided that the covered hours and amounts are clearly specified in the employment contract. This arrangement is generally acceptable only if the employee’s regular wage, when converted into an hourly rate, meets or exceeds the statutory minimum wage. Additional premiums are required if the employee’s actual overtime, night work, or holiday work exceeds the hours covered by the fixed allowance.

The same basic rules discussed in the hourly wage section also apply to monthly-paid employees for paid annual leave, National Pension, other social insurance contributions, and severance pay.