There are 4 kind of social insurance in Korea
1)National pension
2)Healthi insurance(long-term care insurance)
3)unemployment insurance
4)Indestrial accident insurance
1.who is subjected to register National pension?
National pension is a government-operated pension program in Korea that requires every citizen under the age of 60 who earns an income to register and contribute a portion of their earnings every month. The contribution rate for national pension is 9% of your income.
Both employers and employees are responsible for paying half of the national pension rate, which means that employers (business owners) have to cover 4.5% of their employees' national pension contributions when hiring them. This payment process also applies to health insurance and unemployment insurance.
Therefore, if you are a business owner planning to hire employees, it's important to consider the burden of social insurance payments in addition to their salaries. Don't forget to take this into account when creating your business plan.
1-2.I'm foreign national, must I pay to National pension?
It depends on your nationality.
There is a list of countries that are exempt from paying into the Korean national pension system. If you are a foreign national from one of these countries, you do not need to pay into the national pension system:
1)Naional pension non applicable countries
Georgia, Nigeria, South Africa, Nepal, East Timor, Malaysia, Maldives, Myanmar, Bangladesh, Belarus, Brunei, Saudi Arabia, Singapore, Swaziland, Armenia, Ethiopia, Iran, Cambodia, Kazakhstan, Tonga, Pakistan, Fiji
If you are from one of the countries listed above, you are not obligated to register and pay into the Korean national pension system.
Even if your home country is not on the list, you may still not be eligible for national pension if your country does not have a social security agreement with Korea that provides pension benefits equivalent to the Korean national pension for Korean citizens living in your home country.
2-1.who is subjected to register health insurance?
If you have registered as a domestic resident or foreigner and are employed, you are required to sign up for health insurance.
The rates for health insurance have been increasing annually and currently stand at 7.09% of your income (3.545% paid by the employee and 3.545% paid by the employer). Additionally, long-term care insurance is also required and is calculated at 12.81% of your health insurance rate.
It's important to note that there is a payment limit of 84,448,000 KRW per year for health insurance. This means that you do not need to pay more than this amount, even if your income increases. In comparison, the national pension payment limit is only 5,240,000 KRW per year, making health insurance the greater financial burden as your income grows. Don't forget to take these costs into account when planning your finances in Korea!
2.You don’t need to pay one of health insurances
As mentioned earlier, health insurance in Korea is actually comprised of two separate insurances: health insurance and long-term care insurance.
If you are a foreign national living in Korea, you can avoid paying long-term care insurance by submitting an application for exclusion. By submitting the required documents within 14 days from your registration date, you will not need to pay for long-term care insurance from the beginning of your stay.
3-1.Foreigner's employment insuracne are not mandatory.
Employment insurance offers many benefits to policyholders in Korea. For example, you can receive unemployment benefits if you are involuntarily laid off from your job, and you may also qualify for maternity and paternity leave benefits through employment insurance.
While Korean workers are required to register for employment insurance, foreign workers are not obligated to do so. However, if you wish to register for employment insurance, you can do so by submitting an application. It's important to note that the cost of employment insurance is split 50-50 between the employer and employee. Therefore, foreign workers must obtain their employer's agreement to register for the insurance, and it's worth noting that employers have the right to reject such requests.
The current rates for employment insurance contributions are as follows:
Employer: 1.15% to 1.75%
Employee: 0.9%
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Article 10-2 (Application to Foreign Workers)
(1)This Act shall apply to foreign workers to whom the Act on the Employment of Foreign Workers applies: Provided, That Chapters IV(unemployement and V shall apply only where a request is made as prescribed by Ordinance of the Ministry of Employment and Labor. (2)All or part of this Act shall apply to foreign workers with exception to those falling under paragraph (1), as prescribed by Presidential Decree. |
※Emoployment insurance application for foreign worker
4-1.Industiral accident compensation insurance covers every workers.
"The industrial accident compensation insurance covers all workers in Korea, regardless of their nationality. Unlike other social insurances, this insurance is paid entirely by the employer.
The rate for industrial accident compensation insurance varies based on the type of business, ranging
from 0.7% to 18.6%."
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Article 6 (Scope of Application)
This Act shall apply to every business or workplace that employs employees (hereinafter referred to as "business"): Provided, That this Act shall not apply to business prescribed by Presidential Decree in consideration of their risk rates, sizes, places, etc |
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