Korea's 4 Major Social Insurances: A Complete Guide for Foreign Companies Hiring in Korea (2026)

Korea’s 4 Major Social Insurances: A Complete Guide for Foreign Companies Hiring in Korea (2026)

If you are a foreign company that has established a presence in South Korea — or is planning to hire your first Korean employee — understanding the 4 Major Social Insurances (4대보험) is not optional. It is a legal obligation, and failure to comply can expose your business to administrative fines, back-payment demands, and even criminal liability under Korean labor law.

This guide explains each insurance program, the 2026 contribution rates, who must enroll, how to register, and what penalties apply if you miss your obligations.

Table of Contents

What Are Korea’s 4 Major Social Insurances?

Korea’s social safety net is built on four mandatory insurance programs that every employer — domestic or foreign — must participate in once they hire employees. These are:

All four programs are mandatory for businesses that employ one or more workers. There is no size threshold — even if you only hire one part-time worker, you are required to enroll.

Contributions are split between the employer and employee, except for Industrial Accident Insurance, which is paid entirely by the employer.

1. National Pension (NPS)

Governing Body: National Pension Service (NPS, 국민연금공단) Purpose: Provides retirement, disability, and survivor pensions.

2026 Contribution Rates

The National Assembly passed reforms in 2024 that will gradually increase the NPS contribution rate from 9% to 13% by 2033. The phased increase began in January 2026.

*The rate increase schedule is phased in gradually. As of early 2026, the base rate remains at 9%, with incremental increases scheduled to begin from 2026 onward per the reformed schedule.

Contribution Base

Contributions are calculated on standard monthly income (기준소득월액), capped at KRW 6,170,000 (upper limit, subject to annual adjustment) and with a minimum of KRW 390,000.

Employer Obligation

• Register new employees within 5 business days of their start date
• Withhold employee’s share from salary and pay both shares to NPS by the 10th of the following month

2. National Health Insurance (NHI)

Governing Body: National Health Insurance Service (NHIS, 국민건강보험공단) Purpose: Covers medical treatments, hospitalization, prescriptions.

2026 Contribution Rates

Long-Term Care Insurance (장기요양보험) is levied as a percentage of the health insurance premium (not base salary), and is similarly split 50/50 between employer and employee.

Contribution Cap

There is no statutory cap on the NHI contribution base (unlike NPS), meaning high-income employees contribute proportionally more.

Key Point for Foreign Companies

If your company has a Korean branch or subsidiary, health insurance enrollment is automatic upon business registration for all full-time employees. The NHIS and NPS are often enrolled simultaneously through the 4대보험 통합신고 (combined enrollment) system.

3. Employment Insurance

Governing Body: Ministry of Employment and Labor (고용노동부) / Korea Workers’ Compensation & Welfare Service (근로복지공단) Purpose: Funds unemployment benefits, job training, and parental leave support.

2026 Contribution Rates

Employment insurance has two components:

A. Unemployment Benefit Contributions (실업급여)

B. Employment Stability & Job Skills Development (고용안정·직업능력개발사업) — Employer only

Most foreign startups and SMEs fall in the under 150 employees bracket, meaning the employer-only additional rate is 0.25%.

What Employment Insurance Covers

• Unemployment benefits: Employees who are involuntarily terminated receive up to 60% of their average wage for a period based on tenure and age
• Parental leave allowance (육아휴직급여): Paid for up to 18 months
• Job training subsidies: Employers can receive reimbursement for training costs

4. Industrial Accident Compensation Insurance (Workers’ Comp)

Governing Body: Korea Workers’ Compensation & Welfare Service (근로복지공단) Purpose: Covers medical treatment, lost wages, disability, and death caused by workplace accidents or occupational disease.

2026 Contribution Rates

This is the only insurance paid entirely by the employer. Rates vary by industry type based on risk assessment:

For most foreign-invested companies operating in office/IT/consulting environments, the rate will be approximately 0.7%–1.0% of total payroll.

Key Point

Unlike the other three insurances, Industrial Accident Insurance does not have an employee contribution. This is a pure employer cost, and it must be pre-paid at the beginning of each year or estimated monthly.

2026 Contribution Rate Summary

Here is a consolidated summary for a typical office-environment company (per KRW 3,000,000 monthly salary):

As a rule of thumb: budget approximately 10–11% of each employee’s gross salary as your additional employer cost on top of wages for social insurance contributions.

Who Is Exempt?

Not all workers require enrollment in all four insurances:

Partial Exemptions

Foreign Employees

Foreign workers with valid work visas (E-7, D-8, etc.) are generally required to enroll in all four insurances. Exceptions apply if Korea has a bilateral social security totalization agreement with the employee’s home country — these agreements can exempt employees from double contributions. Korea has such agreements with: USA, Canada, UK, Germany, France, Japan, Australia, and others.

Check the NPS website (nps.or.kr) for the current list of countries with active totalization agreements.

How to Enroll: Step-by-Step

Step 1: Register Your Business with the 4 Major Insurance Agencies

Upon incorporating your company in Korea and obtaining your business registration number (사업자등록번호), you must separately register with:

• National Pension Service (NPS): Apply online at minwon.nps.or.kr or in-person at your local NPS branch
• NHIS: Enrollment is usually linked with NPS via the integrated system
• Employment Insurance + Industrial Accident: Register at the Korea Workers’ Compensation & Welfare Service (근로복지공단) — online at total.comwel.or.kr or at a local branch

Step 2: Integrated Online Enrollment (4대보험 통합신고)

Korea offers an integrated online portal at 4insure.or.kr where employers can:

• Enroll in all four insurance programs simultaneously
• Report new employee hiring
• Report employee separations
• Submit monthly payroll changes

Step 3: Report New Employees

Each time you hire an employee, you must report the hiring to all four insurance agencies within 5 business days of the employment start date. The integrated portal allows a single submission.

Step 4: Monthly Payment

Insurance contributions are assessed monthly and must be paid by:

• NPS and NHI: 10th of the following month
• Employment Insurance + Industrial Accident: Monthly or quarterly based on company size

Penalties for Non-Compliance

Korean authorities take social insurance compliance seriously. Common penalties include:

Failure to Enroll

Underreporting Wages

If an employer intentionally under-reports employee wages to reduce contributions:

• Retroactive assessment of the full owed amount
• Penalties of 5%–10% of the unpaid amount
• Potential criminal referral in serious cases

No Statute of Limitations Protection

Authorities can audit social insurance contributions retroactively up to 3 years for NPS and NHI, and up to 5 years for employment insurance.

Special Rules for Foreign Employees

Foreign employees working in Korea on work visas face a few additional considerations:

1. National Pension Reciprocity Agreements

If your employee’s home country has a totalization agreement with Korea, they may be exempt from Korean NPS contributions if they are already covered under their home country’s pension system. Their employer (you) must apply for the exemption with documentation.

2. NHI for Foreigners

As of 2019, foreign employees working in Korea for 6 months or more are mandatorily enrolled in Korea’s NHI. Short-term visa holders may be exempt.

3. Employment Insurance for Foreign Workers

Employees on D-8 (Corporate Investment), D-9 (Trade Management), and most E-series visas are enrolled. Certain visa categories (e.g., F-4, F-5, F-6) also participate in employment insurance.

Key Takeaways

• All four insurances are mandatory as soon as you hire any worker in Korea
• Total employer cost = approximately 10–11% of gross payroll on top of salaries
• Enroll within 5 business days of each new hire; use the integrated portal at 4insure.or.kr
• NPS contribution rates are rising through 2033 — factor this into long-term headcount planning
• Foreign employees may be eligible for exemptions under bilateral agreements — always check before over-contributing
• Non-compliance is costly: audits can go back 3–5 years, and penalties compound quickly

Getting social insurance right from day one sets the foundation for a compliant, scalable operation in Korea. If you are still in the setup phase, integrating payroll and social insurance compliance into your initial incorporation planning saves significant headaches later.

📩 Need help navigating Korea’s social insurance requirements for your foreign-invested company?

SMA Law Firm assists international businesses with all aspects of Korean employment compliance — from initial setup to ongoing payroll administration.

Contact us at sma@saemunan.com or visit startcompanykorea.com to get started.