Korean social insurance on salaries in 2026: rates, ceilings and who pays what

Social insurance is the part of Korean payroll that foreign owners most often get wrong, and not because it is complicated. The rates are published, the calculation is mechanical and the filings go through a single portal. What goes wrong is scope: who must be enrolled, from which day, on which pay, and which foreigners are exempt. A missed enrolment surfaces months later — at a labour inspection, a visa renewal, a dispute with a departing employee — and brings back premiums for both shares, late charges and fines.

The four insurances rest on four statutes: the National Pension Act, the National Health Insurance Act with the Long-Term Care Insurance Act, the Employment Insurance Act and the Industrial Accident Compensation Insurance Act. Employment and accident premiums are collected under a joint Premium Collection Act. The figures below are the rates in force in 2026.

Sources: National Pension Service; National Health Insurance Service; Ministry of Health and Welfare; Ministry of Employment and Labor notices for 2026.

National pension

Every employee aged 18 to under 60 at a workplace with at least one employee is a workplace subscriber (사업장가입자, saeopjang gaipja) under Article 8 of the National Pension Act. The contribution is calculated on the standard monthly income (기준소득월액, gijun sodeuk worraek) — the employee’s reported pay — and shared equally under Article 88. In 2026 the rate is 9.5%: the 2025 reform raised it from 9%, where it had stood since 1998, and adds half a point every January until it reaches 13% in 2033. 2027 will be 10%.

The base has a floor and a ceiling, revised every July in line with average earnings. From July 2025 to June 2026 they were KRW 400,000 and KRW 6.37 million; from July 2026 to June 2027 they are KRW 410,000 and KRW 6.59 million. Above the ceiling the contribution is fixed — KRW 313,025 a month from each side in the second half of 2026 — so for senior staff the pension is a smaller share of pay than the headline rate suggests. Part-time workers with at least 60 hours a month are covered; shorter schedules may be covered too after a month of employment, depending on days and earnings.

Health insurance and long-term care

Employees are workplace subscribers (직장가입자, jikjang gaipja) to national health insurance from their first day under Article 6 of the National Health Insurance Act. The 2026 rate is 7.19%, up from 7.09%, shared equally; the base is all pay, with a premium cap high enough that almost no salary reaches it. Dependants — spouse, children, parents with limited income and assets — are covered without extra premium. Employees with other income above KRW 20 million a year, such as rent, interest or dividends, pay an additional premium on that income themselves.

Long-term care insurance (장기요양보험, janggi yoyang boheom) funds care for older people and is charged on top of the health premium under Article 9 of the Long-Term Care Insurance Act. For 2026 it is 13.14% of the health premium — 0.9448% of pay — shared equally. Health premiums are paid monthly on the previous year’s pay and settled each April against the actual pay of the year before, so employees whose pay rose see an adjustment on their April payslip.

Employment insurance

Employment insurance (고용보험, goyong boheom) pays unemployment benefit, parental leave benefit and training subsidies. The unemployment element is 1.8% of pay, 0.9% each. The employer alone pays a job stability and vocational training (고용안정·직업능력개발) levy by size under the Premium Collection Act and its decree: 0.25% for businesses with fewer than 150 employees, 0.45% for larger priority-support SMEs, 0.65% for other businesses with 150 to 999 employees and 0.85% for 1,000 or more and public bodies. The government has proposed raising the unemployment element from 2027; check the rate before budgeting next year.

Some people are outside employment insurance under Article 10 of the Employment Insurance Act: employees aged 65 or older when hired, very short part-time workers, and — the one that matters most to foreign-owned companies — registered directors and the representative director, who are not workers. Foreign employees follow special rules, below.

Industrial accident insurance

Industrial accident compensation insurance (산재보험, sanjae boheom) covers medical care, wages and compensation for work-related injury and disease, including commuting accidents. It applies to every business with workers under Article 6 of the Industrial Accident Compensation Insurance Act, covers every worker from the first day — part-time, foreign, even unregistered — and is paid entirely by the employer. Rates are set by industry each year: the 2026 average is 1.47%, unchanged since 2024, including a uniform 0.06% for commuting accidents. Offices, finance and IT sit well below average; mining, construction and transport far above. Workers are covered even if the employer never enrolled; the employer then pays the back premiums and part of the benefits.

What counts as pay

Contributions are calculated on pay (보수, bosu) — broadly, taxable employment income: base salary, allowances, bonuses and incentives, overtime, and taxable benefits in kind. Non-taxable items are excluded, the most common being a meal allowance of up to KRW 200,000 a month, a childcare allowance of up to KRW 200,000 per child under six, and vehicle maintenance allowances within limits. Severance pay is not contribution pay. Stock options and RSUs are taxable on exercise or vesting and count for the health and employment insurance settlement of that year.

Pension and health insurance are paid monthly on a reported figure and corrected later: pension by the annual revision of the standard monthly income, health insurance by the April settlement. Employment and industrial accident premiums are paid monthly on actual pay, and the employer files an annual pay total (보수총액신고, bosu chongaek singo) for the previous year by 15 March. Structuring pay so that a large part is non-taxable allowances reduces contributions but invites questions; keep allowances within the statutory limits.

Directors and owners

A paid representative director is enrolled in national pension and health insurance as a workplace subscriber, with the company paying the employer share. Directors are not workers, so employment insurance and industrial accident insurance do not apply — unless a director is in substance an employee with a title. A company whose only person is an unpaid director has no workplace subscribers; the director is covered as a regional subscriber (지역가입자, jiyeok gaipja) if resident in Korea, paying health insurance on income and assets.

This is relevant to foreign investor-directors on a D-8 visa: Korean immigration looks at whether the company pays its director and its staff properly, and four-insurance certificates are among the documents asked for on renewal. A director who draws no salary to save contributions may find the visa renewal harder than the savings were worth, because immigration officers read an unpaid director as a company without real activity.

Foreign employees

Foreigners are covered on largely the same terms as Koreans, with three exceptions.

Simplified; National Pension Act Article 126, National Health Insurance Act Article 109, Employment Insurance Act Article 10-2.

For pension, Article 126 of the National Pension Act applies the scheme to foreign employees unless their country’s system does not cover Koreans. Around twenty countries are on the reciprocity exemption list. When a covered foreigner leaves Korea for good, a lump-sum refund (반환일시금, banhwan ilsigeum) is available to nationals of countries that refund Koreans or have a social security agreement with Korea — so the employer must file the loss-of-coverage report promptly, or the employee cannot claim.

Korea has social security agreements with more than thirty countries. Most let an employee posted from home stay in the home pension system for a fixed period with a certificate of coverage (가입증명서, gaip jeungmyeongseo): up to five years for Canada, two years extendable by three for Sweden, six years for Switzerland, for example. Some agreements also cover employment insurance; health insurance is almost always Korean. See the country guides for Sweden, Switzerland and Canada.

For employment insurance, Article 10-2 of the Employment Insurance Act covers residents with F-2, F-5 and F-6 status automatically; most professional and investor visas are covered only if the worker applies, and the Employment Permit System for E-9 and H-2 workers has its own rules and additional insurances. Many expatriates on E-7 or D-8 visas never apply — which means no unemployment benefit, but also no contribution.

For a foreign employee, the first payroll question is not the rate. It is the passport, the visa and the certificate of coverage.

Voixa Korea

The monthly and annual cycle

1. Hiring: report the new employee’s acquisition of coverage — by the 15th of the following month for pension, employment and accident insurance, within 14 days for health insurance — through the four-insurance portal (4대사회보험 정보연계센터).
2. Every month: deduct the employee shares and income tax from pay; the agencies send a combined bill; pay by the 10th of the following month.
3. March: file the annual pay total for employment and industrial accident insurance by 15 March; adjust the year’s premiums.
4. April: health insurance settlement on last year’s actual pay.
5. July: new national pension floor and ceiling; standard monthly incomes revised.
6. Leaving: report loss of coverage by the 15th of the following month — and for health insurance within 14 days — with the final pay settled.

Late payment brings a surcharge that grows with the delay. Unreported employees mean back premiums — both shares — for up to three years under the limitation rules in Article 115 of the National Pension Act and Article 91 of the National Health Insurance Act, plus administrative fines. Deducting an employee’s share and not paying it over is treated far more seriously. See the annual compliance calendar for the full timetable.

Budgeting a Korean hire

For planning, the employee’s deductions and the employer’s contributions both sit close to 10% of pay up to the pension ceiling, and fall as a share of pay above it. The table assumes an office business with fewer than 150 employees, an industrial accident rate of 0.7%, a Korean employee enrolled in all four insurances and the pension ceiling from July 2026.

Indicative 2026 figures before income tax; income tax and local income tax are withheld from the employee on top.

Three practical points follow. First, Korean candidates usually negotiate an annual gross figure — yeonbong (연봉, yeonbong) — and sometimes include severance in it; agree in writing which. Second, a salary increase in January meets a pension rate increase in the same month, so the employer’s cost rises faster than the salary. Third, for a seconded foreigner exempt from the pension, the employer saves 4.75% on pay up to the ceiling, which on a senior salary is about KRW 313,000 a month — worth the certificate of coverage.

Subsidies: Durunuri and others

The Durunuri social insurance subsidy (두루누리 사회보험료 지원, duruni sahoe boheomnyo jiwon) pays 80% of both the employer’s and the employee’s national pension and employment insurance contributions for new employees of businesses with fewer than ten insured staff, where the employee earns less than KRW 2.7 million a month. It applies only to people with no pension or employment insurance record in the year before joining, excludes the owner’s relatives and people with high property or other income, and is calculated on pay of up to KRW 2.3 million. It stops when the headcount reaches ten or pay crosses the threshold. For a start-up hiring its first junior staff it is worth claiming.

Other support comes from employment insurance itself: subsidies for hiring young people, older workers and people with disabilities, for converting fixed-term staff to permanent contracts and for training. They change each year; see incentives in 2026 for the investment side.

Severance and retirement pensions

Not one of the four insurances, but always on the same budget line: under Article 8 of the Employee Retirement Benefit Security Act, an employee who has worked for at least a year at 15 hours a week or more is owed severance pay (퇴직금, toejikgeum) of at least 30 days’ average wages for each year of service. Budget it at one-twelfth of annual pay — 8.3%. Employers can fund it through a retirement pension plan (퇴직연금, toejik yeongeum), defined benefit or defined contribution; a defined-contribution plan with contributions of one-twelfth of pay discharges the liability as it goes. See hiring in Korea for contracts and leave.

Income tax withholding

Alongside the insurances, the employer withholds income tax (근로소득세, geullo sodeukse) monthly under Article 134 of the Income Tax Act, using the National Tax Service’s simplified withholding table, plus local income tax of 10% of it, and settles the year in the year-end settlement (연말정산, yeonmal jeongsan) each February. Foreign employees can choose a flat 19% rate on gross employment income under Article 18-2 of the Restriction of Special Taxation Act for a limited number of years from first starting work in Korea, instead of progressive rates with deductions — often cheaper for well-paid expatriates. Employee social insurance contributions are deductible from taxable income under the progressive system, but not under the flat rate.

A worked example

A foreign-owned software company in Seoul with twelve employees hires a Korean developer at KRW 4 million a month, and seconds a German engineer at KRW 9 million a month on an E-7 visa. The company’s industrial accident rate is 0.7%.

For the developer, the employee pays KRW 190,000 to the pension, KRW 143,800 to health insurance, KRW 18,895 to long-term care and KRW 36,000 to employment insurance — KRW 388,695, or 9.7%. The company pays the same pension, health and care amounts, KRW 46,000 of employment insurance and KRW 28,000 of accident insurance — KRW 426,695, or 10.7% — and accrues KRW 333,333 of severance. The developer costs about KRW 4.76 million a month, 19% above gross salary.

The German engineer holds a certificate of coverage under the Korea–Germany social security agreement, so neither side pays Korean pension. Health insurance and long-term care apply in full on KRW 9 million — about KRW 366,000 from each side. He does not apply for employment insurance. The company pays KRW 63,000 of accident insurance and accrues severance. He elects the 19% flat tax.

Mistakes we see

1. Late enrolment of new staff, especially part-timers and the first employee.
2. Contributions on base salary only, leaving out bonuses and taxable allowances.
3. Enrolling a seconded foreigner in the pension without checking the social security agreement — or exempting one without a certificate.
4. Not filing the loss-of-coverage report, so a departing foreigner cannot claim the lump-sum refund.
5. Treating a director as an employee for employment insurance, or an employee as a director to avoid it.
6. Missing the 15 March annual pay total.
7. Forgetting the July change in the pension ceiling and the January change in rates.
8. Budgeting salary plus 10% and forgetting 8.3% severance.

Korean terms you will meet

Questions readers ask

About the author

Alexander Baranov

Founder of the BCA Group · cross-border corporate and tax adviser since 2008

Alexander advises foreign founders and groups on company formation, tax structuring and corporate law in more than 40 jurisdictions across Europe, the Gulf, Asia and Latin America. He is the author of nine books on international business and tax and writes regularly for professional finance and tax journals. He works in English, German, Spanish and Russian.

This guide is based on the Korean statutes cited in the text and on our own filings. It is reviewed when the law or official rates change.

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