South Korea · Glossary
South Korea HR and payroll glossary
20 local terms and acronyms: tax, social security, payroll and employment law.
The terms and acronyms you meet on payslips, tax and employment documents in South Korea. Figures are for 2026; the calculations are on South Korea's HR data page and in the take-home pay calculator.
4 major insurances52-hour weekAnnual paid leaveDismissal noticeEarned income deductionEarned income tax creditEmployment insuranceIndustrial accident insuranceLabour Relations CommissionLocal income taxLong-term care insuranceMOELNational Health InsuranceNational PensionNTSRedundancy dismissalRetirement payRetirement pension (DB / DC)Unfair dismissal remedyYear-end settlement
Tax
Earned income deduction
근로소득공제
A sliding deduction from salary before tax, similar to Japan's employment income deduction: 70% of the first KRW 5 million, falling in steps to 2% above KRW 100 million, capped at KRW 20 million. Tax is then charged at 6% to 45%, plus 10% local income tax. Source
Earned income tax credit
근로소득세액공제
A credit against tax on salary: 55% of calculated tax up to KRW 1.3 million, then KRW 715,000 plus 30% of the excess, subject to a cap that falls with total salary, from KRW 740,000 down to KRW 200,000 for the highest earners. Source
Local income tax
지방소득세
A local tax equal to 10% of national income tax (rates of 0.6% to 4.5% on the same base), withheld by the employer together with income tax. Source
Year-end settlement
연말정산
Monthly tax is withheld from a simplified table; each early year the employer recalculates the previous year's tax using the employee's deductions and credits (insurance, card spending, medical, education and so on) and refunds or collects the difference through February payroll. Source
Social security and pensions
4 major insurances National Pension, health, employment and industrial accident insurance
4대보험
The collective name for Korea's four compulsory social insurances: National Pension, National Health Insurance (with long-term care), employment insurance and industrial accident insurance. Employers report hires and leavers once for all four through a shared information centre. Source
Employment insurance
고용보험
The unemployment-benefit premium is 1.8% of pay, split 0.9% each. The employer also pays an employment-security and vocational-training premium that rises with headcount: 0.25% under 150 employees, up to 0.85% at 1,000 or more. Source
Industrial accident insurance Industrial accident compensation insurance
산재보험 (산업재해보상보험)
Employer-only insurance whose rate is set each year by industry, plus a commuting-accident rate common to all industries. For 2026 professional services pay 0.66% in total, against an all-industry average of 1.47%. Source
Long-term care insurance Long-term care insurance for the elderly
노인장기요양보험
Collected together with health insurance at 13.14% of the health premium, which equals 0.9448% of monthly pay in 2026, split equally (0.4724% each). Source
National Health Insurance
국민건강보험
Compulsory health insurance run by the National Health Insurance Service: 7.19% of monthly pay in 2026, split equally (3.595% each). The premium cap only applies at very high pay, so in practice it is uncapped for professional salaries. Source
National Pension
국민연금
The state pension. The rate rose to 9.5% of standard monthly income in 2026, split 4.75% each, and will rise by 0.5 points a year to 13% in 2033. Standard monthly income is capped at KRW 6,370,000 until June 2026 and KRW 6,590,000 from July 2026, so contributions stop growing well below senior salaries. Source
Employment law
52-hour week
주 52시간제
The legal limit of 40 hours a week and 8 hours a day plus up to 12 hours of overtime a week by agreement. Overtime, night work (22:00 to 06:00) and holiday work are paid at 150% or more. Source
Annual paid leave
연차유급휴가
15 days after one year with at least 80% attendance, plus 1 day for every 2 further years of service, up to 25 days; in the first year, 1 day per month of full attendance up to 11. Applies to workplaces with 5 or more employees. Source
Dismissal notice
해고예고
An employer must give 30 days' notice of dismissal or pay 30 days' ordinary wages instead, except for employees with under 3 months' service or for serious misconduct. The dismissal and its reason must also be notified in writing. Source
Redundancy dismissal Dismissal for managerial reasons
경영상 이유에 의한 해고
Redundancies require urgent managerial necessity, efforts to avoid dismissal, fair selection criteria and 50 days' prior consultation with the union or employee representatives. Source
Retirement pay Statutory severance pay
퇴직금
Every employee with at least one year's service working 15 or more hours a week is owed 30 days' average wages per year of service on leaving for any reason, including resignation. It accrues at about one-twelfth of annual pay and is a real employer cost. Source
Retirement pension (DB / DC) Defined-benefit / defined-contribution retirement pension
퇴직연금 (확정급여형 / 확정기여형)
Instead of lump-sum retirement pay, an employer can set up a retirement pension plan. Under a DC plan it must contribute at least one-twelfth of annual wages each year into the employee's account; a DB plan pays a benefit at least equal to statutory retirement pay. Source
Unfair dismissal remedy Application for remedy against unfair dismissal
부당해고 구제신청
Dismissal needs 'justifiable cause', which is read strictly. An employee can apply to the regional Labour Relations Commission within 3 months for reinstatement and back pay, so most exits are negotiated as voluntary resignations. Source
Agencies and institutions
Labour Relations Commission National and regional Labour Relations Commissions
노동위원회 (중앙노동위원회 / 지방노동위원회)
Quasi-judicial bodies that decide unfair-dismissal and unfair-labour-practice cases and mediate disputes. Cases start at the regional commission, with appeals to the National Labour Relations Commission and then the courts. Source
MOEL Ministry of Employment and Labor
고용노동부
The labour ministry. It enforces the Labor Standards Act through labour inspectors at regional offices, sets employment and accident insurance rates, and handles wage-arrears complaints. Source
NTS National Tax Service
국세청
The tax authority. Employers file monthly withholding returns, pay over income tax withheld and submit year-end settlement results to the NTS; employees retrieve deduction data through its Hometax system. Source
For Japan, see the Japan HR Glossary.