Are Korea's 4 Major Insurance Premiums a Tax? Key Differences & 2026 Rates Guide for Foreign Workers

Are Korea's 4 Major Insurance Premiums a Tax?

When you receive your pay stub, you will see National Pension (국민연금), Health Insurance (건강보험), and Employment Insurance (고용보험) deducted alongside income tax and local income tax. Because the monthly amounts are not small, a common question is: "Aren't the 4 major insurance premiums also a kind of tax?" The short answer is: the 4 major insurance premiums are not taxes.

Taxes are money that the state or local government forcibly collects without providing a specific direct benefit in return (Article 2 of the Framework Act on National Taxes, 국세기본법 제2조). The 4 major insurance premiums, by contrast, are social insurance contributions (사회보험료) paid to prepare against social risks such as illness, old age, unemployment, and workplace accidents — and in return, contributors receive benefits such as allowances, pensions, and medical care. The legal basis is also different: the National Pension Act (국민연금법), the National Health Insurance Act (국민건강보험법), the Employment Insurance Act (고용보험법), and the Industrial Accident Compensation Insurance Act (산업재해보상보험법) each apply separately.

2026 Four Major Insurance Rates at a Glance

National Pension (국민연금)

Health Insurance (건강보험) + Long-Term Care Insurance (장기요양보험)

Employment Insurance (고용보험)

Industrial Accident Insurance (산재보험)

Note for foreign workers: The statutory rates above are the legal minimums. Your employment contract cannot set your share lower than these rates, but always check your pay stub to confirm the correct amounts are being applied.

Key Differences Between Income Tax and the 4 Major Insurance Premiums

Category Income Tax (소득세) 4 Major Insurance Premiums
Legal nature Tax Social insurance contribution
Legal basis Income Tax Act Each respective insurance act
Direct benefit in return None Allowances, pension, medical care, etc.
Employer burden None (withholding obligation only) Employer bears half or more
Year-end tax settlement Tax rate applied Full premium amount deducted from taxable income

Income tax is calculated by multiplying the tax base by the applicable rate, whereas the 4 major insurance premiums are treated as income deduction items (소득공제), which reduce the tax base itself. In other words, the more you pay in 4 major insurance premiums, the lower your income tax burden becomes.

Sample Deduction Calculation (Monthly Income of KRW 3,000,000)

The total employee share deducted comes to approximately KRW 270,000–280,000 (excluding Long-Term Care Insurance; about KRW 290,000 including it). For a worker earning the 2026 minimum wage of KRW 2,156,880 per month (40-hour week · 209 hours), the deduction amount will be lower than this.

Enrollment Obligations and Penalties for Non-Enrollment

Employers are obligated to report the acquisition of 4 major insurance coverage from the day they hire an employee. Failure to report is subject to administrative fines under Article 131 of the National Pension Act (국민연금법 제131조), Article 118 of the Employment Insurance Act (고용보험법 제118조), and other applicable provisions. From the employee's perspective, non-enrollment can result in direct harm — such as being unable to receive compensation in the event of a workplace accident, or losing eligibility for unemployment benefits (실업급여).

Check Your Deductions with Workbear

If you want to know exactly how much is deducted from your paycheck for the 4 major insurance premiums and taxes, try the take-home pay calculator at Workbear (workbear.kr). Enter your annual or monthly salary and it will instantly show your take-home pay after reflecting National Pension, Health Insurance, Employment Insurance, income tax, and local income tax. It is also useful for checking whether the deduction items on your pay stub are correct.

For the income tax figure by monthly pay bracket, see the Korean income tax withholding table lookup (Enforcement Decree of the Income Tax Act, Attached Table 2, amended 2026-02-27).

This article is for informational purposes only and does not constitute legal advice. For specific cases, consult a certified labor attorney (노무사) or lawyer.

Frequently Asked Questions

Can I deduct my 4 major insurance premiums in the year-end tax settlement (연말정산)?

Yes. National Pension premiums and Health Insurance premiums including Long-Term Care Insurance premiums paid by the employee are fully deductible as income deductions under the Income Tax Act 소득세법 . Employment Insurance premiums are likewise fully deductible. Industrial Accident Insurance premiums are borne entirely by the employer, so they are not a deductible item for employees.

Do part-time workers (단시간 근로자) also have to enroll in the 4 major insurances?

In principle, workers who work 15 hours or more per week must enroll in all 4 major insurances. Workers who work fewer than 15 hours per week ultra-short-hour workers may be excluded from National Pension and Health Insurance, but Employment Insurance applies if they work for 3 months or more. Industrial Accident Insurance applies to all workers regardless of working hours.

If I have a business registration, can I still be enrolled in the 4 major insurances as an employee?

The standard is the actual employment relationship, not whether a business registration exists. Courts have recognized individuals as employees even when they had a business registration, if they worked under the direction and supervision of an employer in a subordinate relationship. In such cases, the obligation to enroll in the 4 major insurances applies equally.

Can the company pay the full 4 major insurance premiums on behalf of the employee?

It is possible for the company to pay the employee's share of the premiums, but that amount is treated as wage income for the employee and is subject to income tax withholding. However, in the case of full-time union officers, a structure where the company pays wages on behalf of the union and then recovers them may constitute an unfair labor practice 부당노동행위 , so caution is required.