South Korea Payroll & Employer of Record
Navigate NTS monthly withholding, NPS pension, NHIS health insurance, Employment Insurance, and mandatory retirement pension obligations across Korea’s regulated 52-hour labour framework.
native payroll
vs nearest peer
since inception
- Income Tax top rate
- 45% above KRW 1B/yr
- NPS Employer
- 4.5% (cap KRW 5,900,000/mo)
- NPS Employee
- 4.5% (same cap)
- NHIS Employer
- ~3.545% of salary
- Employment Insurance ER
- 0.9–1.55% of wages
- WCI (Work Comp) ER
- Varies by industry
- Local Income Tax
- 10% of national income tax
- Withholding Deadline
- 10th of following month
- Annual Leave
- 15 days (after 1 year)
- Minimum Wage (2025)
- KRW 10,030/hour
Getting South Korea payroll “mostly right” is the most expensive mistake
52-Hour Working Week Violation — 주 52시간
Korea’s working hours cap of 52 hours per week (40 regular + 12 overtime) applies to all employers with 5 or more employees. Violations carry criminal penalties of up to 2 years imprisonment or KRW 20 million fine per inciden.
Year-End Tax Adjustment Error — 연말정산 소득공제 오류
연말정산 errors are a leading cause of NTS audit triggers. Common failures: incorrect deduction amount (over-claiming dependents, education, medical), failure to exclude ineligible family members from the basic deduction (150만원/person), misclassification of tax-exempt allowances (식대 monthly KRW 200,000, transportation), and errors in applying tax credit vs deduction distinction for pension contributions.
4대보험 Standard Income Mis-declaration — 기준소득월액
NPS contributions are calculated on the 기준소득월액 (standard monthly income) declared annually each July, based on the prior year’s total annual income divided by 12. If the employer declares an incorrect standard income (e.g., excluding bonuses or irregular income), NPS issues a retroactive adjustmen.
Retirement Pension Non-Compliance — 퇴직연금 미설치 & DC 미납부
Since 2022, all employers must establish a retirement pension scheme (DB, DC, or IRP) for employees with 1+ year of service. Under DC, the minimum annual contribution is 1/12 of the employee’s annual ordinary wage.
The three types of providers who struggle with South Korea
Route through local Korean payroll bureaus. NTS withholding and 4대보험 handled by local partner. Year-end tax adjustment (연말정산) often excluded from scope or delegated to the employee. Retirement pension DC contribution scheduling frequently missing. 52-hour overtime calculation may not integrate with attendance data. Annual NHIS 보수총액신고 and NPS 기준소득월액 updates require manual intervention by client.
- ×Partner NTS filing
- ×연말정산 gap risk
- ×퇴직연금 partial
더존 WEHAGO, 영림원 ERP, SAP Korea: strong NTS and 4대보험 integration for domestic Korean firms. Annual standard income declaration for NPS and NHIS 보수총액신고 typically handled. 연말정산 간소화 data integration varies. Retirement pension DC contribution scheduling and IRP transfer management requires separate setup. Foreign employee payroll, totalization exemption, and tax treaty application require customisation.
- ×4대보험 integrated
- ×연말정산 supported
- ×Foreign payroll partial
Fully managed payroll with native NTS Hometax filing, 4대보험 EDI monthly declarations, year-end tax adjustment (연말정산) processing, retirement pension DC contribution scheduling to IRP accounts, 52-hour attendance integration, NPS 기준소득월액 annual update, NHIS 보수총액신고 reconciliation, foreign employee totalization and treaty handling, and local income tax (지방소득세) filing — all in-platform.
- ×Native Hometax filing
- ×연말정산 in-platform
- ×퇴직연금 DC managed
The only provider that closes every gap
From monthly NTS Hometax withholding to year-end 연말정산, 4대보험 EDI declarations, retirement pension DC contributions, 52-hour attendance tracking, NPS 기준소득월액 annual update, and foreign employee totalization management — Mercans owns every layer of Korean payroll on a single contract.
G2N Nova™ — Native NTS & 4대보험 Engine
Mercans’ proprietary G2N Nova™ engine files monthly withholding tax to NTS via Hometax, submits 4대보험 EDI declarations (NPS, NHIS, EI, IAI) by the 10th, computes progressive income tax 6–45% plus 10% local surtax, processes year-end 연말정산 including Hometax 간소화 data integration, and schedules mandatory DC retirement pension contributions to employee IRP accounts — all on every pay run.
Korea-based payroll specialists
Mercans operates a Korea-resident payroll team with expertise in NTS Hometax withholding and 연말정산, 4대보험 EDI administration, NPS 기준소득월액 annual declaration, NHIS 보수총액신고 reconciliation, retirement pension DC contribution management, 52-hour overtime computation, and foreign employee totalization and treaty handling. Named account managers with direct Hometax and EDI portal credentials.
PIPA / 개인정보보호법 data protection compliance
Korean payroll data is governed by the Personal Information Protection Act (개인정보보호법, PIPA) enforced by the Personal Information Protection Commission (PIPC). Employee 주민등록번호 (resident registration number), 건강보험 and 국민연금 numbers, and salary data are sensitive personal data requiring explicit consent and purpose limitation. Mercans holds BCR approval, ISO 27701, SOC 1 & 2, and ISO 27017/27018. Cross-border data transfer compliance maintained per PIPA adequacy procedures. Zero security breaches since inception.
Mercans vs the rest — capability by capability
Ten core Korean payroll capabilities rated across four provider types.
Korea Payroll Capability Matrix
10th deadline · 간이세액표 · local income tax 10%
February · 간소화 data · 지급명세서 1 March
Monthly EDI · July 기준소득월액 adjustment · cap KRW 5.9M
3.545% + 0.459% LTCI · no ceiling · annual reconciliation April
고용보험 0.9%+1.15% · COMWEL EDI · March annual
1/12 ordinary wage · January deadline · 14-day departure rule
탄력적 근로시간제 · 1.5× premium · attendance integration
Certificate of Coverage · 183-day test · treaty rate documentation
연차휴가 15–25 days · leave pay · unused leave cash-out
NTS + 4대보험 EDI + COMWEL · cross-agency audit trail
Korea’s statutory rates — at a glance
Four social insurance programs (4대보험) plus progressive income tax and 10% local surtax. Rates current for 2025.
Key Contribution Rates
LIVEIncome Tax — NTS 간이세액표 + Local Tax
Monthly income tax withheld using the NTS 간이세액표 (simplified withholding tax table). Annual progressive brackets: 6% (KRW 0–14M), 15% (14–50M), 24% (50–88M), 35% (88–150M), 38% (150–300M), 40% (300–500M), 42% (500M–1B), 45% (above 1B KRW). Local income tax (지방소득세) 10% of income tax, filed separately to local government by the 10th.
→ 6–45% progressive + 10% local surtax · 간이세액표 · 연말정산 February · 지급명세서 by 1 MarchYear-End Tax Adjustment (연말정산) — February Filing
연말정산 reconciles each employee’s annual income tax liability. Employees submit evidence for deductions (인적공제 150만원/dependent, 교육비, 의료비, 주택자금) and tax credits. Employer computes actual annual tax, compares with cumulative withholding, and refunds or collects the difference via February payroll. 지급명세서 filed to NTS via Hometax by 1 March.
→ 연말정산 January–February · 지급명세서 by 1 March · 1% late-filing penalty4대보험 Annual Reconciliation Cycles
Each of Korea’s four social insurances has a distinct annual cycle beyond monthly EDI: NHIS — 보수총액신고 by 10 March; adjustment bill or refund in April. NPS — prior-year income reported by end of May; new 기준소득월액 effective 1 July. EI + IAI — 개산/확정보험료신고 to COMWEL by 31 March.
→ NHIS 10 March · NPS June–July · EI+IAI 31 March · all agencies cross-reference NTSRetirement Pension (퇴직연금) — DC Contribution Timing & Ordinary Wage
Under DC, the employer must deposit at least 1/12 of the employee’s annual ordinary wage to the employee’s IRP account by January for continuing employees and within 14 days of departure for leaving employees. Ordinary wage includes regular salary and fixed contractual bonuses but excludes irregular discretionary bonuses.
→ DC minimum 1/12 ordinary wage · January annual deadline · 14-day departure deadline · criminal sanctionSee your real South Korea payroll cost in real time
NPS, NHIS, Employment Insurance, income tax with 10% local surtax — calculated live as you move the slider.
South Korea Payroll Cost Calculator
LIVEWhat only South Korea experts know to handle
These are the compliance details that don’t appear in standard payroll setup guides — but appear in every audit and labour inspection we’ve encountered in South Korea over 20 years.
NTS Withholding & Year-End Adjustment
Monthly income tax withheld via NTS simplified withholding table and remitted through Hometax by the 10th. Progressive annual brackets 6–45% plus 10% local income tax. Year-end adjustment (연말정산) processed January–February with income deductions of 150만원 per dependent, tax credits, and Hometax 간소화 data integration. 지급명세서 filed to NTS by 1 March; late-filing penalty 1%.
NPS — National Pension (국민연금)
NPS contributions 4.5% EE + 4.5% ER on standard monthly income capped at KRW 5,900,000/month (floor KRW 370,000), via monthly EDI by 10th. Annual standard income (기준소득월액) updated each July based on prior-year income reported by employer by end of May.
NHIS & Long-Term Care Insurance
NHIS 3.545% EE + 3.545% ER on total remuneration, with no ceiling. Long-term care insurance (장기요양보험) at 12.95% of NHIS premium (~0.459% each side) brings total to ~4.004% per side. Annual income reconciliation (보수총액신고) due 10 March; NHIS issues adjustment bill or refund in April. New employee NHIS enrollment required within 14 days of hire.
Employment Insurance & Industrial Accident
Employment Insurance 0.9% EE + 1.15% ER via COMWEL EDI by 10th. Industrial Accident Insurance (산재보험) is ER-only, averaging ~1% for office work, higher for manufacturing; self-assessed annually. Annual confirmed premium declaration (개산/확정보험료신고) due to COMWEL by 31 March. Special employment type workers in defined occupations are EI-mandatory since 2021.
Every worker type — fully covered
From Korean resident employees to foreign E-visa holders, Mercans handles every payroll track across Korea’s regulated employment framework.
Parallel Compliance Engines
(Regular Employees)
Income tax 6–45% progressive on annual taxable income, withheld monthly via 간이세액표 table. 10% local income tax (지방소득세) on top. Year-end adjustment (연말정산) in February; 지급명세서 filed by 1 March. Personal deductions (150만원/dependent), education, medical, housing fund credits applied.
NPS: 4.5% EE + 4.5% ER on standard monthly income capped at KRW 5,900,000. Monthly EDI by 10th. Annual 기준소득월액 updated each July based on prior-year total income declared by employer in May.
NHIS + LTCI: ~4% EE + ~4% ER 3.545% health + 12.95% LTCI surcharge (~0.459%) = ~4.004% per side. No ceiling. Annual 보수총액신고 reconciliation by 10 March; NHIS adjustment bill or refund issued in April.
Employment Insurance: 0.9% EE + 1.15% ER on total wages. Industrial Accident Insurance ER-only (~1% office). Both via COMWEL EDI by 10th. Annual 개산/확정신고 by 31 March.
Retirement pension (퇴직연금 DC) minimum 1/12 of annual ordinary wage contributed to employee IRP by January (continuing) or 14 days from departure. Vesting at 1 year service. MOEL inspection risk at termination.
(E-Visa & Work Permit Holders)
Income tax: same progressive 6–45% + 10% local for tax residents (183+ days/year in Korea). Non-residents taxed on Korean-source income only. Flat 19% NTS rate option available for non-residents on employment income (20.9% with local tax). Tax treaty reduced rates must be claimed by employee via NTS form at start of employment.
NPS totalization exemption (~30 treaty countries) nationals from countries with bilateral social security agreement (USA, Japan, Germany, UK, France, Canada, Australia and ~23 others) may be NPS-exempt for up to 5 years with a Certificate of Coverage from home country authority. After 5 years or for non-treaty nationals: full 4.5%/4.5% NPS enrollment.
NHIS: same ~4% each side foreigners on qualifying work visas (E-1 through E-7, F-2, F-4, F-5, H-2) are NHIS-mandatory. Short-term B and C visas are exempt. Regional and local NHIS enrollment procedures apply.
Work permit (비자) compliance employer must verify valid work permit category (E-1 professor, E-2 English teacher, E-3 researcher, E-4 technical, E-5 professional, E-7 special occupation) and register with Immigration. Category mismatch triggers employer sanctions and potential deportation.
Retirement pension same 퇴직연금 obligation applies to foreign employees with 1+ year of service regardless of visa type. IRP account requires 외국인등록번호. Departing employee: IRP payout or transfer within 14 days.
Korea payroll — key deadlines
Monthly declarations, annual reconciliations, and year-end adjustment — the Korean payroll compliance calendar.
each month
NTS Withholding + 4대보험 EDI Monthly Filing
Monthly income tax (갑근세) and local income tax remitted to NTS via Hometax by the 10th of the following month. 4대보험 EDI declarations (NPS, NHIS, EI, IAI) submitted via each agency portal by the 10th.
February
Year-End Tax Adjustment (연말정산)
Employer collects employee deduction evidence in January and processes 연말정산 with February payroll. NTS 간소화 서비스 opens 15 January with pre-filled deduction data. Over-withheld tax refunded in February salary; under-withheld amount collected. 지급명세서 (per-employee withholding statement) filed to NTS via Hometax by 1 March.
NHIS
NHIS 보수총액신고 & EI/IAI Annual Confirmation
NHIS annual income reconciliation (보수총액신고): employer submits prior-year total remuneration per employee to NHIS by 10 March. NHIS recalculates annual NHIS+LTCI contributions; adjustment bill or refund issued in April.
1 July (NPS)
NPS 기준소득월액 Annual Standard Income Update
Employers must report each employee's total prior-year earned income to NPS by end of May. NPS computes new 기준소득월액 (standard monthly income = prior-year total ÷ 12), capped at KRW 5,900,000 and floored at KRW 370,000.
Mercans across the Asia-Pacific
Native payroll delivery across APAC’s most complex regulatory environments — Korea, Japan, Singapore, Australia, Philippines, Malaysia — on a single contract.
covered
1 contract
consolidation
APAC
Every filing. Every format. Submission-ready.
Mercans generates the exact file types that NTS, NPS, NHIS, MOEL expect to receive.
