The four mandatory insurances have distinct bases, caps and cost-sharing rules, and the pension rate steps up in 2026. What has to be tracked in parallel.
- Statutory external audit threshold
- Dual accounting-standard choice
- Which visa applies to a foreign investor versus an intra-company transfer?
The feature that most changes day-to-day payroll administration, however, is that Korean employees generally do not file their own annual income tax return. Instead, the employer runs yeonmal jeongsan every January–February: collecting each employee's deduction documentation (insurance premiums, dependents, medical and education expenses, housing loan interest and more), recalculating the year's actual tax liability, reconciling it against what was withheld monthly, and submitting the finalized settlement to the National Tax Service by the end of February. Errors surface as employee-level under- or over-withholding, which makes the settlement a compliance deadline embedded in the payroll calendar, not an accounting afterthought.
What an employee costs in South Korea. Every figure below is published on the South Korea country page.
| South Korea | |
|---|---|
| Employer social insurance (4 major insurances) | National Pension 4.75% · Health Insurance 3.595% (+ long-term care, 13.14% of the health premium) · Employment Insurance 0.9% · Workers' Compensation 0.6%–18.5% (industry-rated, employer-only) |
| Dividend withholding tax | 22% to non-residents (20% national + 10% local surtax) absent treaty relief; treaty rates commonly 5%–15% |
| Minimum share capital | No statutory minimum under the Commercial Code; KRW 100 million is the practical benchmark tied to FDI registration and the D-8 investor visa |
| VAT | 10% flat — no reduced rates; exports zero-rated |
| VAT standard rate | 10% |
What makes it complex in South Korea
- Statutory external audit threshold — (2 of 3: total assets ≥KRW 12 billion, liabilities ≥KRW 7 billion, revenue ≥KRW 10 billion) since the External Audit Act amendment extended coverage to Yuhan Hoesa, not just Chusik Hoesa.
- Dual accounting-standard choice — for unlisted companies — K-IFRS or K-GAAP — while listed companies and unlisted financial institutions are required onto K-IFRS.
Which visa applies to a foreign investor versus an intra-company transfer?
The D-8 corporate investor visa applies to a foreign national investing at least KRW 100 million into a Korean corporation and holding at least 10% of voting shares. The D-7 intra-company transferee visa applies when a foreign headquarters sends staff with at least one year of prior experience to a Korean branch. The E-7 skilled professional visa is the employer-sponsored route for hires without an investment or intra-company link.
Statutory external audit threshold is one of the points HTLC Network handles for clients operating in South Korea, within a single engagement that covers every other country they operate in — executed locally, governed centrally.
In South Korea the scope is: Full-cycle Korean payroll including the four major social insurances and the year-end tax settlement (yeonmal jeongsan) administration on behalf of each employee.
See Payroll & Workforce Management in South Korea for the full scope, or the South Korea country page for the statutory framework across every service.
Figures as published on the HTLC Network country pages, reviewed September 2026 and collected from public sources. They are not a substitute for advice on a specific case and should be verified before being relied on.