Introduction
Employers in South Korea are required to participate in four social insurance programmes: National Pension (NPS), National Health Insurance (NHI), Employment Insurance, and Workers Compensation Insurance. This guide covers the 2024-2025 contribution rates and caps.
National Pension (NPS)
NPS contributions total 9% of monthly income, split equally between employer and employee (4.5% each). The monthly income cap for 2024 is KRW 5,900,000. NPS provides old-age, disability, and survivors pension benefits. Foreign employees may be exempt depending on bilateral agreements.
National Health Insurance and Long-Term Care
NHI premiums are 7.09% of monthly salary for 2024, split equally (3.545% each). There is no salary cap. Long-Term Care Insurance is calculated as 12.81% of the NHI contribution, also split equally, effectively adding approximately 0.91% of salary. All employees are covered regardless of salary level.
Employment and Workers Compensation Insurance
Employment insurance for the employee is 0.9% of salary. The employer pays 0.9% plus an additional 0.25-0.85% for employment stability and skills development programmes (varies by company size). Workers compensation insurance is 100% employer-funded at rates ranging from 0.7% to 18.6% depending on industry classification, with an average of approximately 1.0%.
Summary of Employer Costs
Total employer statutory costs in South Korea are approximately 10-12% of gross salary. This includes NPS 4.5%, NHI 3.545%, Long-Term Care ~0.45%, Employment Insurance ~1.15%, and Workers Compensation ~1.0%, totalling approximately 10.65%. When retirement severance pay (one month's salary per year of service, mandatory under Korean law) is factored in, the effective employer cost rises to approximately 18-20% of annual salary.
Calculate Your Employment Costs with Msure
Model the full cost of hiring employees in South Korea. Get an instant breakdown of all four social insurance costs.
Try the Compensation Calculator