Workers' Compensation in Korea: Types of Benefits and How to Calculate Your Payout

Workers' Compensation in Korea: Types of Benefits and How to Calculate Your Payout

What Is Workers' Compensation?

When a worker is injured, becomes ill, or dies in the course of work, the monetary compensation available to the worker (or their surviving family) is collectively referred to as "workers' compensation" (산재 보상금). The legal basis is the Industrial Accident Compensation Insurance Act (산업재해보상보험법), under which the Korea Workers' Compensation and Welfare Service (근로복지공단) is the paying authority.

Note for foreign workers: The statutory benefits described below are the legal minimums. Your employment contract may provide additional benefits, but it cannot fall below these standards.

Main Types of Workers' Compensation Benefits

1. Medical Care Benefit (요양급여)

Covers treatment costs for injuries or illnesses caused by a work-related accident. When treatment is received at a medical institution designated by the Korea Workers' Compensation and Welfare Service, the Service bears the full cost of treatment (Article 40 of the Industrial Accident Compensation Insurance Act / 산업재해보상보험법 제40조). There is no limit on the treatment period; coverage continues until recovery or stabilization of symptoms.

2. Temporary Disability Benefit (휴업급여)

Paid for the period during which the worker cannot work due to medical treatment. It is calculated at 70% of the average wage on a daily basis and applies when the inability to work lasts 4 days or more (Article 52 / 제52조). If the average wage falls below the minimum compensation standard, 70% of that minimum compensation standard amount is applied instead.

3. Disability Benefit (장해급여)

Paid when a physical disability remains after treatment. Disability grades range from Grade 1 (most severe) to Grade 14, and depending on the grade, the benefit may be received as a disability compensation annuity (장해보상연금) or a disability compensation lump sum (장해보상일시금) (Article 57 / 제57조). Grades 1–3 are paid as an annuity only; Grades 4–7 allow a choice between annuity and lump sum.

4. Nursing Care Benefit (간병급여)

If nursing care continues to be necessary even after treatment has ended, the benefit is paid upon confirmation that nursing care is actually being provided (Article 61 / 제61조).

5. Survivor Benefit (유족급여)

Paid to surviving family members when a worker dies due to a work-related accident. The worker's family may choose between a survivor compensation annuity (유족보상연금) — set at 52–67% of the average wage, with an additional amount depending on the number of dependents — and a survivor compensation lump sum (유족보상일시금) equivalent to 1,300 days of average wage (Article 62 / 제62조).

6. Injury-Disease Compensation Annuity (상병보상연금)

If the worker has not recovered after 2 years from the start of medical treatment and falls under disability grades 1–3 (폐질등급 제1~3급), the temporary disability benefit is replaced by the injury-disease compensation annuity (Article 66 / 제66조). The amount ranges from approximately 90 to 329 days of average wage.

Average Wage Calculation Is the Key

Most workers' compensation benefits are calculated based on the average wage (평균임금). The average wage is the total wages paid during the 3 months immediately preceding the date of the accident, divided by the total number of calendar days in that period (Article 2 of the Labor Standards Act / 근로기준법 제2조). Calculation methods may differ for workers with complex wage structures, daily workers, or part-time workers, so care is required.

Workers' Compensation Application Process

1. File a Medical Care Benefit Application (요양급여 신청): Submit a "Medical Care Benefit Application Form" to a branch of the Korea Workers' Compensation and Welfare Service. Employer confirmation is the standard procedure, but if the employer refuses to confirm, the worker may apply independently.
2. Work-Related Accident Recognition Review: The Service investigates the circumstances of the accident and its connection to work duties.
3. Benefit Payment: After a recognition decision is issued, the relevant benefit is paid upon claim.
4. Appeal Process: If you disagree with the decision, you may contest it in the following order: Request for Review (심사청구, within 90 days) → Request for Re-examination (재심사청구) → Administrative Litigation (행정소송).

Check with Byro

If you find it confusing to calculate the number of regular employees (상시근로자 수) or wage amounts—both central to workers' compensation calculations—try using the Regular Employee Count Calculator and AI Labor Law Search at Byro (workbylaw.com). Complex wage structures and workers' compensation application documents can also be quickly reviewed using the AI review feature.

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