In Korea, employers and employees contribute to statutory social insurance programs that provide retirement, healthcare, unemployment, and workplace injury protection.

Korea’s four major social insurance programs are:

1. National Pension

2. National Health Insurance, including Long-Term Care Insurance

3. Employment Insurance

4. Workers’ Compensation Insurance

For foreign companies employing staff in Korea, these contributions represent a significant additional payroll cost. As a practical budgeting guideline, employers should generally allow approximately 12% of employees’ gross insurable payroll for employer-side social insurance costs.

Actual contributions may differ depending on the employee’s compensation, applicable contribution ceilings, company size, industry classification, and the employee’s eligibility for each insurance program.

National Pension

The National Pension provides retirement, disability, and survivor benefits.

The total National Pension contribution rate increased in 2026 and will continue to rise gradually through 2033.

• Employee contribution: 4.75%

• Employer contribution: 4.75%

• Total contribution rate: 9.50%

Effective July 1, 2026, the monthly standard income range used for National Pension contributions is:

• Minimum standard monthly income: KRW 410,000

• Maximum standard monthly income: KRW 6,590,000

Accordingly, the maximum total monthly National Pension contribution is KRW 626,050, generally shared equally between the employee and employer.

The contribution rate and the standard monthly income ceiling should be reviewed separately. The contribution rate increased to 9.5% from 2026, while the income ceiling is adjusted annually in July based on changes in national income levels.

National Pension Service – Contribution Rates and Standard Monthly Income

National Health Insurance

National Health Insurance provides medical benefits to insured employees and their dependents.

The contribution rates for 2026 are:

• Employee contribution: 3.595%

• Employer contribution: 3.595%

• Total contribution rate: 7.19%

The premium is generally calculated based on the employee’s monthly remuneration and shared equally between the employer and employee.

Long-Term Care Insurance

Long-Term Care Insurance supports individuals who require ongoing assistance due to age-related conditions or long-term health needs. It is assessed together with National Health Insurance.

For 2026, the effective contribution rates based on monthly remuneration are:

• Employee contribution: approximately 0.4724%

• Employer contribution: approximately 0.4724%

• Total effective contribution rate: 0.9448%

The Long-Term Care Insurance premium is calculated in relation to the National Health Insurance premium.

National Health Insurance Service – 2026 Insurance Rate Notice

Employment Insurance

Employment Insurance provides unemployment benefits and supports employment stabilization and vocational training programs.

The 2026 contribution rates are:

• Employee contribution: 0.90%

• Employer contribution: 1.15% to 1.75%

• Combined contribution rate: 2.05% to 2.65%

Both the employee and employer contribute 0.90% for unemployment benefits. The employer pays an additional 0.25% to 0.85% for employment stabilization and vocational training programs, depending primarily on the size and classification of the company.

Ministry of Employment and Labor – Employment Insurance Contribution Structure

Workers’ Compensation Insurance

Workers’ Compensation Insurance covers work-related injuries, illnesses, disabilities, and deaths.

The premium is borne entirely by the employer. Unlike the other social insurance programs, the applicable rate varies according to the employer’s industry classification and occupational risk level.

For 2026, the national average Workers’ Compensation Insurance rate remains approximately 1.47%, but the actual rate applicable to an individual company may be higher or lower.

Ministry of Employment and Labor – 2026 Workers’ Compensation Insurance Rates

Summary of 2026 Contribution Rates

• National Pension: Employee 4.75% / Employer 4.75%

• National Health Insurance: Employee 3.595% / Employer 3.595%

• Long-Term Care Insurance: Employee 0.4724% / Employer 0.4724%

• Employment Insurance: Employee 0.90% / Employer 1.15%–1.75%

• Workers’ Compensation Insurance: Employer only; industry-specific, with a 2026 national average of 1.47%

Approximate Total Contributions

• Employee: 9.72%

• Employer: approximately 11.44%–12.04%

The estimated employer total above includes the national average Workers’ Compensation Insurance rate. The actual employer cost may differ depending on company size, industry, payroll composition, and the applicable contribution bases and ceilings.

Practical Budgeting Guidance for Employers

For preliminary budgeting, a foreign employer should generally expect employer-side social insurance costs of approximately 12% of gross insurable payroll, in addition to employees’ gross salaries.

This is a planning estimate rather than a fixed statutory rate because:

• National Pension contributions are subject to a monthly income ceiling.

• Employment Insurance rates vary depending on company size and classification.

• Workers’ Compensation Insurance rates vary by industry.

• Each insurance program applies its own statutory contribution base, which may not be identical to taxable employment income.

• Certain foreign employees may qualify for exemptions or special treatment based on nationality, visa status, reciprocal arrangements, or social security agreements.

Although not every insurance rate increases every year, contribution rates, income ceilings, and other assessment standards are reviewed regularly and may increase over time. Employers should therefore review the applicable rates when preparing each year’s payroll budget.

Accurate social insurance calculations are essential for payroll compliance and reliable employment-cost forecasting in Korea.

For assistance with Korean payroll, social insurance registration, contribution calculations, and ongoing compliance, please contact Korea Payroll Partners.