When deciding on the best South Korea compensation and benefits plan, you'll have to consider the statutory minimums as well as what your employees may expect. The right South Korea benefit management...
When deciding on the best South Korea compensation and benefits plan, you'll have to consider the statutory minimums as well as what your employees may expect. The right South Korea benefit management plan should attract top talent to your open positions and keep you compliant with all of the country's regulations. Globalization Partners can help. Our South Korea compensation and benefits outsourcing services will make sure your employees are paid at the right times and get the benefits they deserve.
When deciding on the best South Korea compensation and benefits plan, you’ll have to consider the statutory minimums as well as what your employees may expect. The right South Korea benefit management plan should attract top talent to your open positions and keep you compliant with all of the country’s regulations. Globalization Partners can help. Our South Korea compensation and benefits outsourcing services will make sure your employees are paid at the right times and get the benefits they deserve.
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South Korea Compensation Laws
South Korea recently raised its minimum wage by more than 5.1% in 2022. The current minimum wage is 9,160 won per hour, which is approximately $7.7. Known for its long working hours, South Korea recently passed a bill that cut the maximum workweek down from 68 to 52 hours. This bill also reduces regular working hours down to 40 per week with up to 12 hours of overtime. If an employee works overtime, it needs to be paid at a rate of 50% to 100% on top of their regular compensation.
Guaranteed Benefits in South Korea
Your South Korea benefit management plan must include any guaranteed benefits that are required by law. These benefits include time off for holidays and vacation days. Employees in South Korea get Labor Day — the 1st of May — off as a mandatory paid holiday. Depending on the size of your company, you may also be required to give employees paid days off for other national holidays. By 2022, all companies with 5 or more employees, will need to give public holidays as paid holidays.
Full-time salaried employees must legally receive 15 days of paid vacation after one year of service with your company. For every two years they work afterward, they’re entitled to an additional day off. However, they cannot exceed 25 vacation days earned per year.
Another common guaranteed benefit is maternity and paternity leave. Female employees receive 90 days of maternity leave but need to agree on the start date with the employer. Either your company or the country’s Employment Insurance will pay for this leave depending on your company’s size. Employees who have worked for your company for more than a year may also be eligible for parental leave.
South Korea Benefits Management
A robust South Korea benefit management plan also includes any supplemental benefits employees may expect. In South Korea, employers often provide supplementary health and life insurance benefits to employees. When you work with Globalization Partners, we can advise you on the typical costs of health insurance and arrange any benefits you need.
Restrictions for Benefits and Compensation
Although collective bargaining agreements (CBAs) are not as common in South Korea as in other countries, you should still make sure your employees or industry is not covered by one. Since South Korea’s laws are often changing, staying up to date with all South Korea compensation laws is essential to remain compliant.
South Korea Competitive Benefits Planning
Your employees are essential to your company’s success in any country, and your benefits plans should reflect that. Designing an appropriate package for your employees in South Korea is just one process you’ll need to navigate before your business can start operations.
South Korea Employee Benefits Plans
A successful employee benefits plan requires a program that is competitive in your industry’s market and sustainable for your company. When you offer a competitive plan for your employees, you’ll be able to help your business stand out during the recruiting process.
The benefits you offer your employees can also show how much you value them as part of your team. Perks such as company cars or travel reimbursements can help them complete their work more efficiently. Some other supplementary benefits you might offer include:
Ongoing professional learning resources
Assistance with housing and accommodations
Child care and education stipends
Financial support during vacations
Requirements for Employee Benefits in South Korea
While supplemental benefits can help you stand out and support your employees, your company will need to prioritize the legally required benefits first. The country’s Labor Standards Act is the primary law code outlining employer responsibilities. To stay compliant, you must provide:
Annual leave
Maternity leave
Family leave
Public holiday leave
Paternity leave
Fertility support leave
How to Design Your Employee Benefits Program
Common practices and legal regulations for employee benefits may vary from one country to the next. However, you can follow the same general process for evaluating your resources and employee needs as you build your program.
1. Establish Your Business’s Budget and Objectives
Your first consideration should be your company’s available resources. Assess your current budget and determine how much you can afford to allocate toward benefits.
Your company’s goals should also be a factor during this early stage of benefits planning. You may be able to leverage your benefits to meet some of these objectives. If you want to keep your employee retention rate high, for example, consider scaling back on hiring. With fewer employees, you’ll be able to offer more benefits and boost morale among your team.
2. Learn About Local Workers’ Needs
At its core, your benefits plan is a way to show employees your support. Some benefits may be more valuable to workers than others. You might consider holding interviews with workers or mailing out questionnaires to learn about their top needs and expectations.
This stage is also a good time to research the benefits other companies in your region offer to see if you can meet or exceed them.
3. Build Your Benefits Plan
Once you’ve completed a needs assessment, you might want to do a gap analysis to help you see your current state and desired future program. Include space in your plan for continued business growth and incorporate your market research into your benefits program.
As you develop a strategy that focuses on meeting employee needs, remember to factor cost containment features, outsourcing requirements, employee contributions, and administrative costs into your final budget.
Average Cost of Benefits Per Employee
Benefits costs can vary widely between companies. As a result, the average per-employee cost of benefits in South Korea may not be a helpful metric in your planning. Instead, plan your budget around your company’s unique financial considerations.
How to Calculate Employee Benefits
As an employer, you’re responsible for offering full pay for sick leave, parental leave, and annual leave. You can calculate rates based on the agreed-upon salary you established for employees in your contract.
How Are Employee Benefits Taxed in South Korea?
Select benefits, such as paid leave, are taxable. However, child-related benefits may be exempt. You’ll need to do your due diligence to determine if any supplemental benefits you require are taxable.
Employee Health Benefits Plans
In South Korea, many employers provide health insurance for workers to ensure their needs are met. Health benefits may include general medical care, emergency treatment, and dental and vision coverage. While these offerings aren’t legally required, they can boost employee morale and make your open positions more desirable in the job market.
South Korea Competitive Benefits Planning
Your employees are essential to your company’s success in any country, and your benefits plans should reflect that. Designing an appropriate package for your employees in South Korea is just one process you’ll need to navigate before your business can start operations.
South Korea Employee Benefits Plans
A successful employee benefits plan requires a program that is competitive in your industry’s market and sustainable for your company. When you offer a competitive plan for your employees, you’ll be able to help your business stand out during the recruiting process.
The benefits you offer your employees can also show how much you value them as part of your team. Perks such as company cars or travel reimbursements can help them complete their work more efficiently. Some other supplementary benefits you might offer include:
Ongoing professional learning resources
Assistance with housing and accommodations
Child care and education stipends
Financial support during vacations
Requirements for Employee Benefits in South Korea
While supplemental benefits can help you stand out and support your employees, your company will need to prioritize the legally required benefits first. The country’s Labor Standards Act is the primary law code outlining employer responsibilities. To stay compliant, you must provide:
Annual leave
Sickness leave
Maternity leave
Family leave
Public holiday leave
How to Design Your Employee Benefits Program
Common practices and legal regulations for employee benefits may vary from one country to the next. However, you can follow the same general process for evaluating your resources and employee needs as you build your program.
1. Establish Your Business’s Budget and Objectives
Your first consideration should be your company’s available resources. Assess your current budget and determine how much you can afford to allocate toward benefits.
Your company’s goals should also be a factor during this early stage of benefits planning. You may be able to leverage your benefits to meet some of these objectives. If you want to keep your employee retention rate high, for example, consider scaling back on hiring. With fewer employees, you’ll be able to offer more benefits and boost morale among your team.
2. Learn About Local Workers’ Needs
At its core, your benefits plan is a way to show employees your support. Some benefits may be more valuable to workers than others. You might consider holding interviews with workers or mailing out questionnaires to learn about their top needs and expectations.
This stage is also a good time to research the benefits other companies in your region offer to see if you can meet or exceed them.
3. Build Your Benefits Plan
Once you’ve completed a needs assessment, you might want to do a gap analysis to help you see your current state and desired future program. Include space in your plan for continued business growth and incorporate your market research into your benefits program.
As you develop a strategy that focuses on meeting employee needs, remember to factor cost containment features, outsourcing requirements, employee contributions, and administrative costs into your final budget.
Average Cost of Benefits Per Employee
Benefits costs can vary widely between companies. As a result, the average per-employee cost of benefits in South Korea may not be a helpful metric in your planning. Instead, plan your budget around your company’s unique financial considerations.
How to Calculate Employee Benefits
As an employer, you’re responsible for offering full pay for sick leave, parental leave, and annual leave. You can calculate rates based on the agreed-upon salary you established for employees in your contract.
How Are Employee Benefits Taxed in South Korea?
Select benefits, such as paid leave, are taxable. However, child-related benefits may be exempt. You’ll need to do your due diligence to determine if any supplemental benefits you require are taxable.
Employee Health Benefits Plans
In South Korea, many employers provide health insurance for workers to ensure their needs are met. Health benefits may include general medical care, emergency treatment, and dental and vision coverage. While these offerings aren’t legally required, they can boost employee morale and make your open positions more desirable in the job market.
Build a Custom Benefits Plan With Globalization Partners
Globalization Partners is here to support your growth abroad. Reach out to our team to learn more.
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.
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