Korean Payroll Compliance
A reference for the Korean payroll rules Hereby applies — the four major insurances (4대보험), income/local tax, and work-hour regulations. These rules drive the payroll calculations in the HR System guide; use this page to look up the rates and thresholds behind the numbers.
4대보험 (Four Major Social Insurances)
국민연금 (National Pension)
| Item | Rate |
|---|---|
| Total Rate | 9.0% |
| Employee | 4.5% |
| Employer | 4.5% |
| Monthly Income Cap | 5,900,000 KRW |
| Monthly Income Floor | 370,000 KRW |
Contributions calculated only on income within the floor-cap range.
건강보험 (Health Insurance)
| Item | Rate |
|---|---|
| Health Insurance Rate | 7.09% |
| Long-term Care Insurance Rate | 0.9182% |
| Total Combined Rate | 8.0082% |
| Employee | 4.0041% |
| Employer | 4.0041% |
- No income cap for regular employees
- Calculation base: All taxable income (base salary, bonuses, allowances)
- Long-term care insurance (장기요양보험) billed together with health insurance
- Annual recalculation based on previous year's income
고용보험 (Employment Insurance)
Unemployment Benefit:
| Item | Rate |
|---|---|
| Total Rate | 1.8% |
| Employee | 0.9% |
| Employer | 0.9% |
Employment Stability/Job Skills (Employer only):
| Company Size | Rate |
|---|---|
| Small (<150 employees) | 0.25% |
| Priority support (150-999) | 0.45% |
| Large (>=1000) | 0.65% |
산재보험 (Industrial Accident Compensation Insurance)
| Item | Details |
|---|---|
| Paid by | Employer only |
| Rate range | 0.6% ~ 34% |
| Average rate | ~1.8% |
| Updated | Annually by industry |
Calculation Example
Monthly salary: 3,000,000 KRW
Employee Deductions
| Insurance | Calculation | Amount |
|---|---|---|
| 국민연금 | 3,000,000 x 4.5% | 135,000 |
| 건강보험 + 장기요양 | 3,000,000 x 4.0041% | 120,123 |
| 고용보험 | 3,000,000 x 0.9% | 27,000 |
| 산재보험 | Employee: 0% | 0 |
| Total Employee | 282,123 KRW |
Employer Contributions
| Insurance | Calculation | Amount |
|---|---|---|
| 국민연금 | 3,000,000 x 4.5% | 135,000 |
| 건강보험 + 장기요양 | 3,000,000 x 4.0041% | 120,123 |
| 고용보험 | 3,000,000 x 0.9% | 27,000 |
| 고용보험 (Job Skills) | 3,000,000 x 0.25% | 7,500 |
| 산재보험 | 3,000,000 x 1.8% | 54,000 |
| Total Employer | 343,623 KRW |
Tax Calculations
Progressive Income Tax Rates
| Annual Income Bracket | Tax Rate |
|---|---|
| Up to 14,000,000 | 6% |
| 14,000,001 ~ 50,000,000 | 15% |
| 50,000,001 ~ 88,000,000 | 24% |
| 88,000,001 ~ 150,000,000 | 35% |
| 150,000,001 ~ 300,000,000 | 38% |
| 300,000,001 ~ 500,000,000 | 40% |
| 500,000,001 ~ 1,000,000,000 | 42% |
| Over 1,000,000,000 | 45% |
Local Income Tax
- Rate: 10% of income tax
- Always calculated as a fraction of the national income tax
Year-End Settlement
- Annual recalculation of actual tax liability
- Adjustment for over/underpayment during the year
- Installment payment option for underpayments
Work Hours Compliance
52-Hour Work Week
| Item | Limit |
|---|---|
| Weekly standard hours | 40 hours |
| Weekly overtime limit | 12 hours |
| Total weekly limit | 52 hours |
Overtime Pay Rates
| Type | Multiplier |
|---|---|
| Regular overtime (weekday) | 1.5x |
| Night shift (22:00-06:00) | 1.5x |
| Weekend/Holiday | 1.5x |
| Night + Weekend/Holiday | 2.0x |
Shift Definitions
| Shift | Korean | Hours |
|---|---|---|
| Day | 데이 (D) | 07:00 - 15:00 |
| Evening | 이브닝 (E) | 15:00 - 23:00 |
| Night | 나이트 (N) | 23:00 - 07:00 |
Compliance Notes
- All rates must be updated annually per government announcements
- Special exemptions for part-time workers under 60 hours/month
- Foreign workers may have different insurance requirements
- Retroactive adjustments required when rates change mid-year
- Monthly reporting to 4대보험 integrated system required
- Attendance records must include GPS data for verification