Notes on Korean payroll, tax, accounting and compliance from the team that files them. Every figure is dated and sourced to the authority it came from.
A December year-end Korean subsidiary files something in ten months out of twelve. Here is the whole calendar in one place, including the one annual filing that no longer exists and the one that becomes monthly in 2027.
Four of Korea's 2026 public holidays land on a Saturday. Two of them buy a Monday back and two vanish, and the difference is written into a presidential decree that most foreign-owned payrolls have never read.
Three changes to Korean parental leave take effect on 18 September 2026, and a fourth already did on 20 August. Each one moves a date your payroll calendar depends on, and one of them creates a leave entitlement that did not exist before.
Korean corporate tax tests client entertainment twice: first on how it was paid, then on how much of it there was. A foreign-owned subsidiary usually fails the first test on receipts and the second on a ceiling it assumed was three times higher.
Korea is not raising the numbers in the wage-arrears penalty. It is moving the offence into a heavier article of the Labor Standards Act, and the list of provisions that travel with it includes the overtime premium.
Korean law makes written rules of employment mandatory at ten employees, and requires a fresh filing every time you change them. Most foreign-owned entities cross the threshold without noticing, and most of those that do file are relying on a doctrine the Supreme Court abolished in 2023.
A foreign employee in Korea is compulsorily insured on the same terms as a Korean national. There are three ways out of that, only one of them is available to a typical assignee, and none of them applies itself.
Leave that expires unused in Korea usually turns into a cash liability. There is one lawful way to stop that, it has four steps, and a 2020 Supreme Court decision made the last step the one that decides the case.
A Korean subsidiary paying a dividend, interest or a royalty to its parent withholds 22% unless the parent's treaty documents are in the payer's hands before the payment. From 1 January 2026 holding them is no longer enough — the payer has to file them with the tax office too.
Most foreign parents discover their Korean subsidiary crossed the external audit threshold in the year after it happened, when the auditor should already have been appointed. The test turns on four numbers measured at the previous year end, and two of them are enough.
Foreign-invested company status turns on two numbers — KRW 100 million per investor and 10 percent of the voting shares. Meeting them is easy. Knowing what the status is still worth after the 2019 and 2025 incentive changes is the part that decides how you structure the entry.
Korea's working-hour cap and Korea's overtime premium are measured two different ways from the same timesheet. Getting the second one wrong is the more serious offence.
A Korean corporation files VAT four times a year, not twice, and the next deadline is 26 October 2026. The rate is the easy part — what costs foreign-owned companies money is input VAT that was never recoverable and zero-rating on parent-company invoices that does not hold.
Every Korean company with a December year-end owes an interim corporate tax payment by 31 August 2026. This is the first interim payment computed at the restored 10/20/22/25% rates, and the choice between the two calculation methods is worth real money this year.
Korea's social insurance rates changed on 1 January 2026, and one of them moved for the first time in 28 years. Here is what each of the four costs an employer and an employee this year, where the ceilings bite, and what a foreign-invested company should be checking on its own payroll.
The Ministry of Economy and Finance proposed on 3 August 2026 to raise the optional flat income tax rate for foreign employees from 19% to 21%, while extending the entry window from end-2026 to end-2029. Here is what changes, what does not, and what a foreign-invested employer should be modelling now.
The Ministry of Employment and Labor gazetted the 2027 minimum wage on 5 August 2026: 10,700 won an hour, 2,236,300 won a month. Here is what it costs a foreign-owned employer, which pay elements count toward the floor, and the obligation that falls due before the year ends.
Korean severance pay is a legal entitlement, not a discretionary payment, and it applies when someone quits. Here is exactly who qualifies, how the calculation works, and what it costs you to get wrong.
