Reading Your Korean Payslip

A Korean payslip is not a payment notice. Article 48 of the Labor Standards Act requires an employer to issue a wage statement showing the components of the wage, how it was calculated, and what was deducted under law or agreement — in writing or electronically.

So it is a document you can check. And for a foreign employee it is worth checking, because deductions that look wrong are often correct for reasons that have nothing to do with payroll.

Verify eligibility first. The percentages only make sense afterwards.

Three blocks, one subtraction

earnings
  − deductions
  = net pay

Earnings hold base pay, position and duty allowances, overtime, night and holiday premiums, meal allowance, vehicle allowance. Deductions hold the four insurances plus income tax and local income tax.

The trap is assuming all of those are calculated on the same figure. They are not, and that is the single most useful thing to understand about a Korean payslip.

Taxable pay is not gross pay

Base pay is employment income. So are position, duty and qualification allowances, performance pay and ordinary bonuses, unless a specific exemption applies. Overtime, night and holiday premiums are wages under the Labor Standards Act and taxable income in principle.

Some items are exempt on conditions:

So on ₩5,000,000 gross made up of ₩4,300,000 base, ₩500,000 position allowance and ₩200,000 exempt meal allowance, tax starts from roughly ₩4,800,000 — and that figure is not automatically the basis the three insurances use.

Three different bases

Each has its own inclusions, timing for reflecting pay changes, and reconciliation. Multiplying one number by four rates and expecting the payslip to match is why verification usually fails.

2026 rates, and where the employee share sits

National pension began stepping up in 2026 under the pension reform, so guidance quoting 9% total and 4.5% for the employee is now out of date. Both values are recorded at the national pension rate, which is the point of keeping a history rather than a current figure.

Long-term care is charged as a percentage of the health insurance contribution rather than of pay, which is why the combined figure is 8.1348% rather than a round number — long-term care rate.

On a ₩4,800,000 basis and assuming full coverage, the employee side lands near:

national pension        ≈ ₩228,000
health insurance        ≈ ₩172,560
long-term care          ≈  ₩22,675
employment insurance    ≈  ₩43,200
                          ─────────
                        ≈ ₩466,435

Actual billing differs with the declared standard monthly income, rounding and reconciliation. Treat these as a check, not a target.

National pension: three ways a foreign employee is outside it

A foreign national aged 18 to under 60 at a covered workplace is in principle a workplace subscriber. The exceptions are real and they are why a missing line is not automatically an error.

So an E-7 employee with no pension line has three things to check before anyone calls it a mistake.

Health insurance does not follow the pension’s logic

This is where the package assumption breaks most visibly.

Workplace health insurance is judged on the employment relationship and the coverage conditions under the health insurance rules — not on nationality reciprocity or a social security agreement in the way the pension is.

Which produces payslips with no national pension line and a full health and long-term care line, entirely correctly. That is not an inconsistency to report; it is two different statutes reaching different answers about the same person.

What the health insurance actually buys, and how dependants work, is in NHIS health insurance for foreigners.

Employment insurance is where the visa shows up hardest

The employee share is 0.9% — the unemployment benefit portion, matched by the employer. Employment stability and vocational skills development contributions are charged to the employer additionally and never appear as your deduction.

Coverage, though, splits by status:

This is the concrete answer to the question people actually have: two colleagues, same job, same salary, different payslips — and both correct.

Industrial accident insurance is never your deduction

The employer pays it in full. Full stop.

If a line for employee-borne industrial accident insurance is reducing your net pay, that is the one item on this page worth querying immediately.

What the employer side of all four costs, and the deadlines for registering staff, is in registering employees for the four insurances.

Income tax is a prepayment, not a rate

Monthly income tax is withheld using the National Tax Service’s simplified withholding tax table, which sets an amount from your monthly pay and your number of dependants. The 6–45% progressive scale is not applied to your monthly salary.

You may also elect 80%, 100% or 120% of the table amount by filing an adjustment request with your employer. Nothing is chosen means 100%.

80% is not a 20% discount. It reduces the monthly prepayment and the year is settled in January either way — the difference simply lands then instead.

Local income tax is normally 10% of the income tax withheld:

income tax withheld  ₩200,000
local income tax     ₩20,000

If those two bear no relationship to each other on your payslip, ask.

Electing the flat rate changes the tax line

A foreign employee who has elected the 19% flat rate can be withheld differently from the simplified table, at a nominal 20.9% including local income tax.

The monthly figure being lower is not a reason to elect it — the election gives up most deductions and credits, and the crossover sits far higher than usually quoted. That comparison is in the 19% flat rate: when it beats the brackets.

A worked net pay

₩5,000,000 gross: ₩4,300,000 base, ₩500,000 position allowance, ₩200,000 exempt meal allowance. Insurance basis simplified to ₩4,800,000, all coverage applying.

gross                        ₩5,000,000
− social insurance             ₩466,435
− income tax                   (from the table)
− local income tax             (10% of the above)
= net pay

With income tax and local income tax at, say, ₩300,000 together, net pay is roughly ₩4,230,000.

What to look for first

Not the net figure. These:

The order to check in

contracted monthly pay
  → earnings, allowances, exempt items
  → gross
  → national pension eligibility
  → health and long-term care enrolment
  → employment insurance, by status
  → each insurance's own basis
  → withholding method: table or flat rate
  → local income tax at 10%
  → net pay

Reading a Korean payslip properly is not confirming what landed in the bank. It is checking that the pay components, the insurance eligibility, the contribution bases and the withholding method all agree with each other — and for a foreign employee, that they agree with a status the payroll team may never have been told about.