Hiring people in Korea

If you had thoughts of hiring people in Korea, consider below two major contract types :

Employment contract vs. Independent service contract

  1. Employment contract (고용관계)
  • Company needs to enroll for the social securities for each employee

Employer portion of social taxes: approx. 8.75%

Employee portion of social taxes: approx.. 8.5%

  • Company needs to provide paid leaves, at least fifteen (15) days per year
  • Company needs to withhold salary income tax (payroll tax) and social taxes for each salary payment
  • Company needs to make severance payment for any employee whose service period is more than a year : approx. one (1) month’s value for one (1) year of service
  • Employees cannot work for more than fifty two (52) hours per week


2. Independent service contract (business income) (비고용관계)

  • Called as independent contractor, freelancer, etc. (사업소득자, 프리랜서, 외주용역 등등)
  • Withholding tax rate is fixed – 3.3% in total for each payment
  • Each individual is required to file global income tax return for the previous year’s business income earning


2 thoughts on “Hiring people in Korea

  1. David Randolph says:


    I would like to have some clarification with respect to Independent service contract (business income) (비고용관계).

    I am a foreign resident who has lived in in Korea for a number of years. On occasion, I am contacted by an agent to teach students. I do not receive payment from the clients directly. Rather, I receive payment from the agent who also takes a sizable percentage of what the clients pay for the services.

    My question is as follows, am I taxed the 3.3% withholding tax or does the agent pay based on payments received directly from the clients.

    Thank you for your assistance,

    David Randolph

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