What exactly is 4대보험 (four major insurances) and how does it affect my paycheck?
I just started my first full-time job in Korea and noticed that my actual paycheck is quite a bit less than my contract salary. My Korean coworker mentioned something called 4대보험 being deducted automatically. I want to understand what each insurance covers, how much is taken from my salary, and whether I can get any of it back when I eventually leave Korea.
1 Answer
Roughly 9 percent of your gross salary, split across three deductions, with a fourth paid entirely by your employer.
National Pension (국민연금) is the retirement pension. The total is about 9 percent of salary and you and your employer each pay about half, so roughly 4.5 percent comes off your side. National Health Insurance (건강보험) is currently around 7 percent in total, again split roughly in half, so about 3.5 percent from you, and a small long-term care premium (장기요양보험) for elderly care services is added on top of the health contribution. Employment Insurance (고용보험) funds unemployment benefits and job programmes and your share is small, roughly 0.9 percent. Industrial Accident Compensation Insurance (산재보험) covers injuries at work and is paid entirely by your employer, so nothing comes out of your pay for it.
Altogether that usually lands somewhere around 9 to 9.5 percent of gross before income tax is taken. The rates are adjusted slightly each year, and pension and health both have upper income ceilings, so a payslip will not always match the arithmetic exactly.
What you get back matters as much as what goes out. The pension has a lump-sum refund for foreigners: when you leave Korea permanently you can apply to the National Pension Service and get most of your contributions back, usually within a few months of departure. Some countries have a pension agreement with Korea, so the rules vary by nationality. Health insurance covers you at any hospital or clinic with a 30 percent copay, which is the reason medical bills here are as low as they are. Employment insurance gives you access to unemployment benefits if you lose a job involuntarily.
Your company should give you a pay stub every month, and the exact deductions are itemised on it — that is the number to check against, since the rates change annually.