Employee benefits in South Korea
Get to know the landscape of employee benefits in South Korea, including healthcare and retirement planning.
Quick Overview
Notable:
- The South Korean government provides employees with national pension and national health care, but employees generally expect additional group plans for private medical, life, & disability insurances.
Statutory Benefits include:
- National Pension (NP)
- National Health Insurance (NHI)
- Employment Insurance (EI)
- Worker’s Compensation Insurance (WCI)
Employers typically provide:
- Private Medical Insurance
- Life Insurance
- Disability Insurance
Other common benefits include:
- Enhanced maternity/paternity/parental leave pay
- Company socials and snacks
Benefits Summary
Benefits coverage standards can differ greatly across countries. The table below shows what statutory, market standard and great coverage look like for each benefit.
National Health Insurance (NHI) in South Korea is a single-payer system administered by the government.
All Korean citizens & residents are enrolled, and both employers and employees are required to make contributions towards healthcare coverage.
While the NHI is strong, Employees expect supplemental coverage.
Most employers offer additional health benefits to employees including dental care, vision care, perhaps an EAP and a wholistic wellness program.
Particularly competitive health coverage includes on site or subsidised gym facilities, strong mental health services and counselling, healthy food options and discounts and subsidies on wellness products, services and activities.
No statutory requirement
A basic level of life insurance coverage which allows employees to upgrade or add additional coverage (riders) out of pocket is a market standard
Outstanding coverage might cover a higher payout level or additional riders.
Employers and employees share contributions to statutory employment insurance, and the coverage includes unemployment, occupational injury or illness, childbirth, and unpaid wages due to employer bankruptcy or closure.
Private employment insurance is available to offer employees further protection, and is often offered at the employees’ cost.
An exceptional employer will cover or at least subsidise the cost of private employment insurance.
Under the National Pension Scheme, employers and employees split a 9% contribution evenly (4.5% of employee salary each).
Statutory childcare benefits (see below)
Parental leave, childcare support, and subsidies help employees balance work and family responsibilities.
In house or fully subsidised childcare.
Education expenses reduction (see below)
Partial reimbursement of tuition fees or an annual learning and development budget of 100,000 KWN or more
Reimbursement of tuition fees, or an annual learning and development budget of 400,000 KWN or more
Many employers offer office snacks, company events and socials, volunteer and community engagement initiatives.
Weekly lunches, team socials, annual Chuseok bonus (Korean Thanksgiving)
N/A
Housing allowances help employees secure affordable housing near their workplace.
Some large corporations provide housing or pay for it in full.
Policies Summary
Policy coverage standards can differ greatly across countries. The table below shows what statutory, market standard and great policy coverage look like for each benefit.
11-25 days
15 days (after 1 year of service)
25 days (maximum) see below for more details
Employees are not legally entitled to time off for non-work-related illness or injury.
There is also no entitlement to unpaid time off.
It is general practice for employers to provide time off for non-work-related illness and injury. This may be at a reduced rate of 70%-80% of their average daily wages.
Top employers will offer up to 3 months of paid sick leave per illness or injury. After that, unpaid sick leave may be granted for an additional 3 months.
90 days
40-70% of average wages
100% of average wages
10 days
40-70% of average wages
100% of average wages
There is no statutory policy for flexible working
Traditionally, work culture in South Korea emphasises face-to-face presence in the workplace, but flexible arrangements are gaining popularity.
Employers that wish to stand out offer remote work, flexitime and compressed workweeks.
Benefits
1. Healthcare / Private Medical Insurance
Universal healthcare is strong in South Korea; in 2015, the country ranked first in the [OECD](https://read.oecd-ilibrary.org/social-issues-migration-health/health-at-a-glance-2015_health_glance-2015-en) for healthcare access, and public satisfaction is consistently among the highest in the world.
Private medical insurance, also known as supplementary or supplemental health insurance, is provided by private insurance companies and complements the coverage provided by the national health insurance system in South Korea.
Private insurance will not reduce the cost of medical procedures, but it will subsidise the typically 20-50% out of pocket payment that is required when residents only use the NHI.
Some employers may fully cover the cost of private medical insurance for their employees, while others may provide it as an optional benefit that employees can choose to participate in and contribute towards the premium.
Typically, private health includes coverage for chronic illnesses such as cancer which may not be covered by the NHI.
Some popular insurance providers include:
- Samsung Life Insurance (includes medical)
- Hanwha Life Insurance
- Kyobo Life Insurance
- Dongbu Insurance
- LINA Insurance (formerly known as Cigna Insurance Korea)
Click here to view our catalogue on wellness providers in South Korea.
2. Employment Insurance
Employment insurance is compulsory in South Korea and employers and employees share the cost, contributing a rate based on the employees’s monthly pay. This provides coverage for various situations, including unemployment, occupational injury or illness, childbirth, and unpaid wages due to employer bankruptcy or closure.
Private employment insurance policies in South Korea are also available and offer extended unemployment benefits, supplemental income protection, coverage for specific types of illnesses or injuries, and additional support for specific circumstances or events. These policies are typically offered by private insurance companies and can be purchased by individuals or provided as an employee benefit by employers.
3. Life Insurance
In SK, employers may offer group life insurance, but it’s not entirely common for them to contribute to the premium.
Group life insurance coverage provided by employers is often a basic level of coverage, and employees may have the option to purchase additional coverage or riders at their own expense.
The coverage is typically tied to the individual's employment with the company, and the policy may cease or require conversion to an individual policy if the employee leaves the organization. Rather than being based on salary, payout will be based on coverage the employee chose.
Plan payouts can vary from 3x annual pay to
Leading providers in South Korea include:
- Samsung Life
- Hanwha Life
- Fubon Hyundai Life
- NongHyup Life
- Kyobo Life
4. Retirement
The National Pension System (NPS) is a mandatory pension scheme in South Korea. Both employers and employees contribute to the pension fund during the employee's working years.
The contributions are calculated based on a percentage of the employee's income, subject to a monthly cap. The contribution rate is 9% of the employee's income, with 4.5% contributed by the employer and 4.5% deducted from the employee's salary.
Retirement is very important in South Korea, and many will have private savings accounts & plans (IRA), but it is not typical for an employer to contribute to an additional retirement savings account.
5. Other tax advantaged benefits
Childcare Subsidies are available to families, ranging in amounts of KRW 100,000 - 200,000 per child per month, depending on the childs’ age. See the details for amounts and eligibility here.
The Education Expenses Reduction is a subsidy that applies to specific education-related expenses, such as tuition fees for qualified institutions. It can cover expenses from preschool to higher education levels.
Policies
1. Annual Leave
In the first year of working, an employee is entitled to 1 day off leave per month, or 11 days for the year. After 1 year of service, employees are entitled to 15 days of annual paid leave each year. Paid leave days are then calculated by adding one day every 2 years, not to eceed 25 days. Like many countries, South Korea also has several public holidays that they celebrate.
2. Sick pay
Employees are not legally entitled to time off for non-work-related illness or injury. There is also no entitlement to unpaid time off. It is general practice for employers to provide time off for non-work-related illness and injury. This may be at a reduced rate of 70%-80% of their average daily wages. Top employers will offer up to 3 months of paid sick leave per illness or injury. After that, unpaid sick leave may be granted for an additional 3 months.
3. Maternity & Paternity
South Korea requires employees to be provided with 90 days maternity leave, 45 of which must be taken after childbirth. The first 60 days are paid for by the company, and the remainder are paid by the government.
In the case of twins, the child bearer is entitled to 120 days.
The paternity leave entitlement in South Korea is 10 days of paid leave. Of these 10 days, 5 days are paid by the company with the other 5 being covered by Employment Insurance.
The specific funding mechanism for periods of maternity leave depends on the size of the business, either the employer or Employment Insurance pays for maternity leave. There is no requirement for the portion of wages paid to the employee, but Employment Insurance grants those on maternity leave to 40% of their usual monthly pay.
4. Other policies
Work related illness or injury: In a work-related illness or injury, the employer must provide paid time off until the employee recovers. Employers are obliged to subscirbe to accident compensation insurance, which covers all payments associated with work-related illness & injury.
Protections: An employer cannot dismiss an employee during, or within 30 days following, maternity leave or any period of leave for medical treatment for an industrial injury or disease.
Dismissals: Except in special cases, South Korean employers are required to give a notice period of at least 30 days before terminating an employment agreement. Alternatively, employers can offer payment in lieu of notice.