What Korea's Four Major Insurances Cost an Employer in 2026

What does a Korean employer actually pay in 2026?

Roughly 11.4 won for every 100 won of gross salary, and the employee hands over another 9.72 won out of their own pay. Between them the four major insurances take a little over a fifth of the payroll line, which is the number a head office usually wants before it approves a Korean hire.

Two of the five rates changed on 1 January. One of them had not changed since 1998.

The employer column uses the 0.25% stability levy that applies below 150 employees and the all-industry average industrial accident rate. Your own industrial accident rate is the figure to substitute first: it is the only line here that is set by what your company does rather than by a national percentage, and the spread across industries is wide enough to move the total by several points in either direction.

The pension rate moved for the first time in 28 years

From 1 January 2026 the national pension contribution rate is 9.5% of standard monthly income, up from the 9% that had applied since 1998. Employer and employee each pay half, so the employer’s share went from 4.5% to 4.75%.

The increase is not a one-off. The rate rises by 0.5 percentage points every year for eight years, reaching 13% in 2033. That is worth building into any multi-year Korean cost model now, because a payroll budget carrying a flat pension line will drift by a growing amount each January, and the drift is entirely predictable.

There is a ceiling, and it matters more to foreign-invested companies than to most Korean employers because expatriate packages tend to sit above it. Contributions are calculated on a standard monthly income band with a floor of 410,000 won and a cap of 6,590,000 won, and those figures apply from 1 July 2026 to 30 June 2027. At the cap, the total monthly pension contribution is 626,050 won, of which the employer pays 313,025 won.

Salary above 6,590,000 won a month therefore costs nothing further in pension. For a senior hire on 15 million won a month, the pension line is not 4.75% of salary — it is a flat 313,025 won, which works out at about 2.1%.

Health insurance and long-term care are one deduction and two rates

Health insurance is 7.19% of the monthly wage in 2026, up from 7.09%. It is split evenly, so each side pays 3.595%.

Long-term care insurance is the line people model wrong. The rate published in 2026 is 0.9448% of the monthly wage, up from 0.9182% — but the payslip and the invoice both express it as a percentage of the health insurance premium, which for 2026 works out at 0.9448 divided by 7.19, or about 13.14% of the health premium. Both statements describe the same money. Modelling it as 13.14% of salary rather than of the health premium overstates the cost by an order of magnitude, and it happens often enough in group budget templates to be worth checking.

Health insurance has a cap too, though it is expressed as a premium rather than a wage. The total monthly premium for an employee is capped at 9,183,480 won in 2026 — half from each side — which corresponds to a monthly wage of roughly 128 million won. For practical purposes that means health insurance is uncapped, unlike pension.

One more feature catches new entrants: health insurance premiums are provisional during the year and settled annually against actual remuneration. A company that gave meaningful raises or paid large bonuses will get a settlement bill, and it is a real cash item rather than an accounting entry. If you are also working through the 2027 minimum wage increase, the settlement effect lands in the same quarter as the wage rise.

Employment insurance has a part your employee never sees

Employment insurance is two separate charges collected together.

The unemployment benefit portion is 1.8% of remuneration, shared equally: 0.9% from the employee, 0.9% from the employer. That is the part the employee sees on the payslip.

The employment stability and vocational skills development portion is paid entirely by the employer and is set by headcount:

“Priority support enterprise” is a statutory classification with headcount thresholds that differ by industry, so two companies with the same 200 staff can sit in different bands depending on what they do. The gap between 0.45% and 0.65% is small in isolation and not small across a 200-person payroll, and it is the sort of classification that gets set once at registration and then never revisited.

Industrial accident insurance is the employer’s alone

The employee pays nothing towards industrial accident insurance. The employer pays all of it, and the rate is not a single national number: the Ministry of Employment and Labor sets a rate for each of 28 industry classes, plus a commuting-accident rate that is the same for every industry.

For 2026 the average across all industries is 1.47%. It has now been held at that level for three years running, having come down from 1.80% in 2018.

What follows from “average” is the important part. An office-based services company sits well below 1.47%; construction and heavy industry sit well above it. The rate attaches to your registered business classification, not to your entity type or your headcount, which means a misclassification is a permanent overpayment that nobody in the group will spot from a consolidated payroll figure. It is worth reading your classification off the annual notice once, deliberately, rather than assuming the rate you were first given was right.

What a foreign-invested employer should check on its own payroll

Coverage of foreign nationals is where the general rules stop being general.

Health insurance is compulsory for a foreign national employed at a Korean workplace. National pension coverage runs on a reciprocity basis, so whether an employee is covered depends on their nationality, and where Korea has a social security agreement with the home country an assignee holding a valid certificate of coverage can be exempted from Korean pension contributions for the period of the posting. Employment insurance treatment varies with visa status rather than nationality. None of these are defaults you can apply to the payroll as a group; they are per-employee determinations that need to be made before the first run, because unwinding an incorrect enrolment months later means corrected filings at four agencies.

The mechanics are easier than the rules. All four insurances are enrolled, reported and adjusted through the joint social insurance portal, so a new hire, a leaver or a salary change is one filing rather than four. Payment is monthly.

These contributions sit alongside, not inside, the severance obligation — severance accrues at roughly a month’s average wage per year of service and is a separate liability, as set out in our note on when severance is actually owed. A Korean payroll cost model that carries salary plus 11.4% and stops there is understating the total by about 8%.

If you would rather not maintain five rates, two ceilings that reset in different months and one industry classification against four agencies, that is the work our payroll outsourcing service exists to absorb. If you have three employees, one bank account and a bookkeeper who already handles the joint portal, you probably do not need us for this.

Figures current as at 15 August 2026, read from the National Pension Service, the National Health Insurance Service and the Ministry of Employment and Labor. Rates are set annually and the pension income ceiling changes each July; verify before applying them to a payroll run in a later period. This is general information about how Korean social insurance works and not advice on any particular employer’s position.