Understanding Korean Salary Deductions
When you work in Korea, your employer is required by law to withhold various social insurance contributions from your salary. Understanding these deductions helps you plan your finances accurately.
The 4 Main Deductions
- Income Tax (소득세): Progressive tax rates from 6% to 45% depending on your annual income. This is the largest deduction.
- National Pension (국민연금): 9% of your salary (4.5% employee + 4.5% employer). Provides retirement benefits.
- Health Insurance (건강보험): Approximately 7% of salary. Covers medical expenses and provides various health benefits.
- Employment Insurance (고용보험): About 0.9-1.8% of salary. Provides unemployment benefits and job training programs.
💡 Expat Tip
If you leave Korea within 6 months of arriving, you may be able to claim a refund of your National Pension contributions. However, health and employment insurance are generally not refundable.
Understanding Your 연봉 (Yeon-bong)
When Korean companies offer a job, they quote your annual salary (연봉). This is typically fixed and does not include:
- Bonuses (상여금) - usually 1-3 months extra
- Severance pay (퇴직금) - one month salary per year of service
- Meal or transportation allowances