South Korea has introduced additional items to be stated on employee payslips.

In accordance with the revision of the Labor Standards Act, effective from November 19, when paying wages to employees, employers must issue a payslip and the payslip must include information required by the law.

It is required that the composition items, calculation method and deduction details of the delegated wages must be written on the wage statement or payslip.

Recently, additional guidance has been distributed with specific details listed below:

Items required to be stated (Labor Standards Act Article 48 and Enforcement Decree of the Labor Standards Act Article 27-2)

  • Personal information such as name, date of birth, employee number, etc. If an employee can be specified by his/her name, it is also allowed to include the name only.
  • Payday
  • Total salary amount
  • Amount for each component of wages. Amount of base pay, various allowances (such as overtime, night, holiday work, family, meal, and position), bonuses, incentives, and other wages by item (if there is a wage paid other than currency, product name, quantity and the total assessed value).
  • Details necessary for calculating the total amount of wages, such as the calculation method for each item of wages.

- Actual number of overtime, night, and holiday working hours and calculation method (a formula with detailed numbers) should be included.

- Both regular items on a monthly basis and irregular items should be included.

- It is not mandatory to include the calculation method for fixed amount items.

- It is not mandatory to include the calculation formula or calculation method for all wage items, but is required to include only for the items whose amount varies depending on the number of days and hours of work.

- It is not mandatory to include certain wage items in the pay slip for which the payment requirements are regulated in the company’s employment regulation or the employment contract (except for overtime, night, holiday work).

- If there is a fixed overtime allowance and if additional overtime wages are paid in addition to the fixed overtime allowance, the calculation method should be described including that time, but if there is no additional overtime, the time is not mandatory to be stated if employment contract or employment regulation stipulates the time. Exception: Article 56 of the Labor Standards Act (Additional wages for extended, night, and holiday work) does not apply to workplaces with fewer than 5 regular workers, and regulations related to working hours do not apply to agricultural and livestock industries and monitoring and intermittent workers (Labor Standards Act Article 63)

  • Amount for each deduction item and total deduction amount

- It is not mandatory to include the calculation method for the income tax rate and social security rates as the rates are stated in the other related laws and regulations.

If you are interested in doing business in the South Korea, find out everything you need to know about payroll, tax, social security, employee benefits, work permits, employment law and more in activpayroll’s Guide to Doing Business in South Korea. This is available as a free PDF to download.

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