Employee Benefits
Spotlight on South Korea – A guide to implementing employee benefits technology
29.01.25
South Korea’s dynamic economy and reputation for technological innovation make it a highly desirable destination for global business and talent. As the country continues to thrive in a competitive labour market, employers are expanding their benefits offerings to attract and retain top employees.
Comprehensive benefits packages that focus on health, family care, and professional development are becoming essential. At the same time, allowances and flexible benefits that promote work-life balance are highly valued by employees.
Let’s take a look at South Korea’s benefits landscape, the different mandatory benefits and popular perks that are helping top organisations stay ahead of talent acquisition and retention, and the key trends shaping the market.
An overview of the employee benefits landscape in South Korea
South Korea offers a structured and comprehensive system of mandatory benefits designed to provide long-term financial security and health protection for employees.
Retirement benefits
Retirement benefits are provided through a three-tiered system:
- Tier one – National Pension Scheme (NPS): Employers and employees each contribute 4.5% of the employee’s salary to the NPS, which cover old-age, disability, and survivor pensions.
- Tier two – Retirement benefit scheme: Employers must provide severance pay equivalent to one month’s salary for each year of service when an employee leaves the company. This can be delivered through a Retirement Pay System (RPS) or a Retirement Pension Plan (RPP).
- Tier three – Corporate pension plans: Many employers enhance retirement savings by offering Defined Benefit (DB) or Defined Contribution (DC) pension plans to supplement the NPS.
Health insurance
The National Health Insurance (NHI) system is a key part of South Korea’s healthcare benefits. Employers and employees are required to contribute 3.545% of the employees’ salary to the NHI. Additionally, long-term care insurance premiums, set at 12.95% of the NHI contribution, are shared equally.
Employment insurance
Employment Insurance (EI) provides unemployment benefits, job training, and maternity/paternity leave. Employers contribute 0.9% to 1.5% of employees’ salaries depending on the company size, while employees contribute 0.8%.
Industrial accident compensation insurance
This insurance, fully funded by employers, guarantees the income of an injured worker and their family. Contribution rates range from 0.56% to 18.56%, depending on the risk level associated with the industry.
Core benefits in South Korea
In addition to mandatory benefits, South Korean employers increasingly provide supplementary benefits to enhance employee satisfaction, retention and productivity.
Medical insurance
Over 75% of our customers provide additional health insurance to cover services not included in the NHI, such as dental care, vision care, and alternative medicine. These policies often include dependants (depending on how comprehensive the package is), with employers funding part or all of the cost, though employees frequently contribute toward dependant coverage.
Health screenings have become a highly valued, with most employers offering allowances or regular check-ups. These packages, tailored to employees’ preferences, range from KRW 300,000 to KRW 750,000, depending on the location and scope of tests. Employees can choose higher level screenings and pay the difference if needed.
Life and disability insurance
Life insurance policies, typically covering two to three times the employee’s annual salary, are standard offerings among South Korean employers. Disability insurance is standard and provides financial support in cases of long-term incapacity.
Many employers combine medical, life and disability coverage into a single group insurance plan. Enhanced packages may also provide the option to add dependants at the employees’ expense.
Supplementary retirement contributions
To attract senior talent, the majority of companies offer enhanced retirement plans with employer-matched contributions. These contributions typically range from 9% to 15.5%, based on the employee’s number of years of service. Employees can also increase their own contributions, including using a portion of their bonus payments.
Popular benefits in South Korea
South Korean employers are embracing diverse benefits that cater to employee wellbeing, professional growth, and work-life balance.
Work-life balance benefits
Flexible working hours, remote work options, and additional annual leave are becoming standard in South Korea. Employers also offer Paid family care leave, extended parental leave, and childcare subsidies, reflecting South Korea’s cultural emphasis on family support.
Transport and commuting allowances
Subsidies for public transportation and reimbursements for commuting expenses are common. Senior staff may also receive car allowances or parking fee reimbursements, offering added convenience.
Technology and remote work benefits
With a digitally skilled workforce, many employers invest in technology-related benefits, providing mobile phone subsidies, internet allowances, and home office equipment stipends to support hybrid or remote work models.
Family and childcare benefits
To assist working parents, companies are increasingly offering childcare allowances and education subsidies. Larger employers are adopting innovative solutions like on-site childcare facilities and partnerships with daycare centres, ensuring convenient support for employees with children.
Learning and development
Continuous professional development is a high priority. South Korean companies commonly fund language courses, certifications, and postgraduate education. Employees also value access to online learning platforms and opportunities for overseas training programmes.
Charitable giving and volunteering
Corporate social responsibility is important to South Korean business culture. Many companies match employee charitable donations and organise volunteering activities, often offering paid leave for community service.
Other benefits
Employers are placing greater emphasis on wellness programmes, offering gym memberships, mental health counselling and other initiatives to support physical and emotional wellbeing.
Providing additional benefits like meal allowances that employees can use to buy lunch when canteen facilities are unavailable at office locations is also very common. The rise of discount and shopping portals, sometimes linked to allowances or bonuses, is also gaining popularity, providing employees with flexible ways to stretch their salaries further.
Key considerations for implementing employee benefits in South Korea
1. Communicate the full value of your programme. To effectively engage employees, highlight not just core benefits, but also the wide range of allowances, bonuses and family-orientated perks. Emphasise offerings such as leave entitlements, celebration benefits and condolence allowances – all of which reflect the cultural importance of family and community.
2. 13th month salary/bonus. Many leading employers, both multinational and local, provide an additional month’s pay as a bonus for all employees during two major Korean holidays: Chinese New Year and Korean Thanksgiving, aligning with local traditions.
3. Consolidate benefits on a tech platform. Employers are using digital platforms to centralise benefits, streamlining the process for employees to access and manage their allowances, add family members to insurance plans, and stay informed about wellness programmes, family benefits and other offerings.
If you’d like to know more about delivering employee benefits in South Korea and how OneHub can help meet evolving employee expectations, get in touch!
Associated products and services
Paul Andrews
Global Benefits Director