What must a Korean employment contract include?
Under the Labor Standards Act (근로기준법, geullo gijunbeop), the employer must state the key terms in writing when the contract is concluded and give the employee a copy, on paper or electronically. The obligation applies to every employee, whatever the contract's length.
The written terms must cover:
- Wages: the components of pay, how each is calculated, and the payment method and date
- Contractual working hours: daily and weekly hours, including start and finish times
- Holidays: the weekly paid holiday and other holidays
- Annual paid leave: the statutory entitlement
- Place of work and duties: where the job is done and what it involves
If any of these terms change later, document the change in writing as well. Failing to issue written terms is itself an offense punishable by a fine, and it leaves you unable to prove what was agreed.
Pay must clear the statutory minimum wage: KRW 10,320 per hour in 2026 (KRW 2,156,880 a month for a full-time employee) and KRW 10,700 per hour from 1 January 2027 (KRW 2,236,300 a month). Contracts signed now should anticipate the 2027 rate; see our minimum wage guide for what counts toward it.
Two practical points for foreign-owned employers:
- Language: labor offices and courts in Korea work in Korean. A bilingual Korean–English contract that states which version prevails avoids disputes over translation.
- Work rules: once you regularly employ 10 or more people, you must file work rules (취업규칙, chwieop gyuchik) with the Ministry of Employment and Labor (MOEL). Contract terms that fall below the standards in your work rules are invalid, so keep the two documents aligned.
Contracts also sit alongside mandatory enrollment in the four major social insurances. Our Korean labor law guide covers that wider framework.
Which contract type fits the role?
Most roles should be open-ended; fixed-term, part-time and dispatch arrangements each come with limits that catch foreign employers out.
| Contract type | Typical use | Key rule |
|---|---|---|
| Open-ended (indefinite) | Core, ongoing roles | The default form; full dismissal protection |
| Fixed-term | Projects, cover, temporary needs | Max 2 years in total, then generally deemed open-ended (exceptions exist) |
| Part-time | Fewer hours than comparable full-time staff | Pro-rated leave; weekly paid holiday from 15 hours a week, severance from 15 hours a week and 1 year |
| Dispatch (temp agency) | Staff supplied by a licensed agency | Permitted job types only, generally max 2 years |
The two-year fixed-term limit is the most common trap. A worker kept on fixed-term contracts beyond two years in total, without a recognized exception such as a defined project or covering for an employee on leave, is generally treated as an open-ended employee who can only be dismissed for cause. Our employment types guide compares each option.
If you engage someone as an independent contractor instead, a services agreement replaces the employment contract, but the label does not decide the person's status. Fixed hours, close supervision and exclusivity point to employment, and misclassification can bring back the full set of employee entitlements.
How does probation work in Korea?
Probation is optional but widely used, commonly for up to three months, and it must be written into the contract or work rules. It gives the employer a structured evaluation period, not a right to dismiss at will.
- Reduced pay, within limits. For the first three months of probation, you may pay 90% of the minimum wage, but only if the contract runs for one year or more and the job is not simple manual work. Many employers pay the full salary anyway.
- Dismissal still needs a reason. The Labor Standards Act applies to probationary employees. Courts give employers somewhat more room to decline confirmation at the end of probation than to dismiss a regular employee, but the reason must still be objective and documented, and it must be given in writing.
- Notice depends on service, not on probation. The 30-day notice requirement does not apply to employees with less than three months of continuous service, whether or not they are on probation.
Set out evaluation criteria in writing on day one and record reviews during the period. That record is your evidence if a decision is challenged.
Working hours, overtime and fixed overtime pay
At workplaces with five or more employees, the standard week is 40 hours, with at most 12 hours of overtime, for a maximum of 52. Overtime, night work (22:00–06:00) and holiday work earn at least a 50% premium, and holiday work beyond 8 hours earns 100%.
Many Korean salary packages bundle a fixed overtime allowance into pay under a comprehensive wage arrangement (포괄임금제, pogwal imgeumje). MOEL's guidelines to prevent misuse of these schemes, in force since 9 April 2026, require employers to itemize base pay and each allowance separately and to calculate premiums on hours actually worked. If a fixed allowance falls short of the statutory premiums for the hours worked, the employer must pay the difference. Bills to restrict the practice by statute were still in committee as of April 2026. If you use fixed overtime pay, state the hours it covers, keep accurate time records, and pay any excess.
Bonus clauses matter too. Since the Supreme Court's en banc ruling of 19 December 2024, regular bonuses paid on conditions such as being employed on the payment date can count as ordinary wages (통상임금, tongsang imgeum), the base for overtime, night and holiday premiums. A bonus designed to sit outside that base may no longer do so.
Leave entitlements to reflect in the contract:
- Annual leave: 1 paid day per month of service in the first year (up to 11), then 15 days after a year with at least 80% attendance, plus 1 day every two years from the third year, up to 25.
- Weekly paid holiday: for employees working 15 or more hours a week.
Building these costs into offers from the start is part of sound HR compliance in Korea.
How can employment lawfully end?
Korea has no at-will employment. A dismissal needs a justifiable reason, written notice, and either a notice period or pay in lieu.
- Justifiable cause: serious misconduct or well-documented performance failure, judged against the full circumstances. Dismissals for managerial reasons additionally require urgent business necessity, genuine efforts to avoid dismissals, fair selection criteria, and at least 50 days' notice to the union or employee representatives.
- Written notice: the reason and the effective date must be given in writing. A dismissal without it is invalid.
- Notice or pay in lieu: at least 30 days' notice or 30 days' ordinary wages, except for employees with under three months of continuous service.
- Challenges: an employee can file an unfair dismissal claim with the Labor Relations Commission within three months, which can order reinstatement and back pay. These protections apply at workplaces with five or more employees.
The mandatory retirement age is 60. Bills to phase it up to 65 were pending in the National Assembly in 2026 but were not law as of October 2026.
Whatever the reason for leaving, severance pay (퇴직금, toejikgeum) is owed to employees with at least one year of service who work 15 or more hours a week: at least 30 days' average wage per year of service, paid within 14 days. Be careful with "severance included" (퇴직금 포함) salary offers, common at startups: severance cannot legally be prepaid in monthly instalments. See severance pay in Korea, explained.
Hire From Korea is a recruiter-led hiring partner: we shortlist 3–5 vetted Korean candidates, coordinate bilingual (English–Korean) interviews, and can arrange contract review, payroll and tax support, or an Employer of Record setup on a custom quote. If you are preparing a first Korean offer, request a consultation.
Frequently asked questions
Does a Korean employment contract have to be written in Korean?
The legal requirement is that the key terms are in writing and that the employee receives a copy. In practice, Korean labor offices and courts work in Korean, so most foreign-owned employers use a bilingual Korean–English contract that states which version prevails.
How long can a fixed-term contract last in Korea?
Up to two years in total, including renewals. A worker employed on fixed-term contracts beyond that is generally deemed to have an open-ended contract, unless a recognized exception applies, such as a defined project or covering for an employee on leave.
Can I dismiss an employee during probation?
Yes, but not at will. You need an objective, documented reason and must give written notice of the reason and date. The 30-day notice requirement does not apply if the employee has less than three months of continuous service.
Can a salary package include severance pay?
No. Severance cannot legally be prepaid as part of monthly salary, so a "severance included" package does not discharge the obligation. Eligible employees are still owed at least 30 days' average wage per year of service when they leave.
Sources
- KOTRA — 2025 Labor Laws in Korea (PDF) — written terms, probation, work rules, dismissal notice and procedure, unfair dismissal remedies
- DLA Piper — Update on legislative and MOEL regulatory trends regarding comprehensive wage schemes — MOEL guidelines effective 9 April 2026 and pending bills
- DLA Piper — Supreme Court overrules previous decision on ordinary wage — 19 December 2024 ruling on conditional bonuses
- Korea JoongAng Daily — Hourly minimum wage set at 10,700 won for 2027 — 2027 minimum wage
- Korea Ministry of Government Legislation — Korean laws in English — Labor Standards Act and fixed-term employment rules
This article is general information, not legal or tax advice. Rules change — confirm specifics with a licensed Korean labor attorney (노무사) or tax accountant.