Mandatory social insurances for foreign companies in Korea (update for 2013)

This is an update for the post written in 2008. I corrected some mistakes and updated insurance premium rates. 

Many foreign employers who newly start their business in Korea ask about social insurances scheme (employment insurance, industrial accident compensation insurance, national pension, and health insurance) in Korea. I provide here the most basic information on this subject.

1. When do I have to subscribe to the insurances for Korean workers?

You should subscribe to the insurances when you hire one or more Korean employee. Each of the insurance is mandatory and managed by government agencies.

2. Are there certain categories of workers who are exempt from mandatory subscription to the insurances?

Yes. A part-time worker whose monthly working hours is less than 60 hours is exempt from the four insurances.

3. How much do I pay for an insurance premium? 

The premium rates for the year 2013 are as follows.  Premiums are paid on a monthly basis. 

Health Insurance

– 5.89% of monthly taxable salary
– 2.945% borne by the employer, 2.945% borne by the worker

National Pension

– 9% of monthly taxable salary
– 4.5% borne by the employer, 4.5% borne by the worker

Employment Insurance

The insurance has two components, namely unemployment benefit and vocational ability development.

(unemployment benefit)

– The premium for unemployment benefit is 1.1% of monthly taxable salary

– 0.55% respectively borne by an employer and a worker

(vocational ability development)

The premium for vocational ability development, to be paid by the employer alone, ranges from 0.25% (a company with less than 150 workers) to 0.85% (a company with 1,000 or more workers).

Industrial Accident Compensation Insurance 

The premium rate differs for each industry based on accident rates. It ranges from 340/1,000 of monthly taxable salary in mining industry  to 6/1,000 in finance industry.

4. Which agency do I contact for the insurances?

Here are links to the websites of each agency.

National Pension

Health Insurance

Employment Insurance & Industrial Accident Compensation Insurance (English website not available)