Labor Cost Calculator - Real Employer Cost per Employee

Calculator/Business Calculator/ Payroll Calculator

What is labor cost?

Calculate payroll costs.

Input Items

Base Salary

Total gross monthly pay including non-taxable allowances.

Non-taxable allowance

Meal or similar allowances excluded from insurance base. Leave 0 if none.

Employer unemployment insurance rate

The unemployment benefit portion is 0.9% for each side. Larger employers also pay an employment-stability and vocational-training surcharge, so adjust to the rate on your bill.

Industrial accident insurance rate

Varies by industry and is paid entirely by the employer. Enter the rate shown on your insurance bill.

Number of employees

Enter how many employees share these terms to also get the company total.

Include severance accrual

One month of pay accrues per year of service, so 1/12 of monthly pay is added.

How it works

Total labor cost = gross pay + employer social insurance + severance accrual. Insurance is based on gross pay minus non-taxable allowances: national pension 4.5%, health 3.545%, long-term care 12.95% of the health premium, and unemployment and accident insurance at the rates you enter. Severance accrual is 1/12 of gross pay.

How to use

Enter the gross monthly pay you give the employee.
Enter non-taxable allowances such as meal pay; they are excluded from the insurance base.
Enter the unemployment and accident insurance rates from your bill, plus the number of employees.
Press Calculate to see monthly and annual cost with a full breakdown.

Example

For one employee earning 3,000,000 won with a 200,000 non-taxable allowance, 0.9% unemployment and 0.7% accident rates, employer insurance is 282,914 won and severance accrual 250,000 won, so monthly labor cost is 3,532,914 won - about 17.8% more than the salary itself.

FAQ

How is this different from take-home pay?

Take-home pay is what the employee receives; labor cost is what the company spends. Employee deductions are subtracted for take-home, employer contributions are added for labor cost. Use the take-home calculator for the employee side.

Where do I find my accident insurance rate?

It is set by industry and shown on the premium bill from the Korea Workers' Compensation and Welfare Service, or in its online insurance portal.

Do I have to include the severance accrual?

The cash goes out when the employee leaves, but the obligation builds from one year of service, so setting aside 1/12 each month is the safer view.