Overview on Taxes and Insurances

Income Tax

Like any other country, taxes are generated if you have a source of income in Korea. Taxation may however differ depending on mutual government agreements.
 

Taxation eligibility

Country	Public school	Academies
United States	Exemption for 2 years	Taxed
Canada	Taxed	Taxed
United Kingdom	Exemption for 2 years	Taxed
Ireland	Taxed	Taxed
Australia	Exemption for 2 years	Taxed
New Zealand	Exemption for 2 years	Taxed
South Africa	Exemption for 2 years	Taxed

 

The 4 major insurances.

• National Health Insurance: In Korea, employers must provide health and medical insurance. Health and medical insurance may cover medical, dental, or accidental coverage or a combination of the three. If health and medical insurance are covered, the employer may pay for all of it or the employer may pay half. Be sure to ask the employer if the insurance covers international hospitals as well as local hospitals. This is a mandatory subscription. 

 

• Employment Insurance: It is a national insurance system implemented for protecting workers’ rights and interests.

 

• National Pension Scheme: This insurance is created to prepare for the time one is not able to work. (pension after retirement).  It is also determined by mutual government agreements. Several countries require employers to pay into a pension, or retirement plan. In most cases, the employer pays half and the teacher pays the other half. Depending on a teacher’s citizenship and the agreement with the teacher’s home country, the pension can be claimed at the completion of the 1-year contract.

 

• Industrial Accident Insurance: Compensates the employees for any occupational accident.  This insurance option that provides both employees and their employers a certain level of financial protection in case of an injury incurred on the job.

 

4 major insurances

Insurance	Employee	Employer
National pension	4.5%	4.5%
National Health insurance	3.545%	3.545%
Employment insurance	0.9%	0.9%
Industrial accident insurance	N/A	Matched by employer

 

 

 

 

Eligibility on national pension

Country	Membership Subscription	Refundable Payment
United States	Yes	Lump-sum return/ can be added to US pension system.
Canada	Yes	Lump-sum return/ can be added to the Canadian pension system
United Kingdom	Yes	Lump-sum return (taxed)
Ireland	Yes	Non-refundable/can be added to the Irish pension system
Australia	Yes	Lump-sum return/ can be added to the Australian pension system
New Zealand	Yes	Non-refundable
South Africa	No	N/A

 

 

Monthly Contribution = Monthly Average Wage X Contribution Rate (7.09%)

 

You can pay online (113,050 KRW; only in Korean, but relatively painless).

 

 

Pension

 

The National Pension System is a state-run social security system to help citizens prepare for situations in which they can no longer earn a living due to old age, unexpected disabilities or even death.

After the mandatory premiums are paid, pension is provided as a source of income when the individual reaches a certain age, acquires a disability, or in the event of his/her death (provided to the bereaved family in this case).

 

•  In the case of employee, premiums are calculated based upon monthly income. An amount equivalent to 9% of the monthly base income is to be paid as the monthly premium while the employer and the subscriber each take responsibility for paying half (4.5%) of the total amount.

•  Individually insured foreigners (self-employed, etc.) must pay 9% of their reported monthly income.

 

An eligible foreigner is paid a Lump-sum Refund plus its interest, for the period corresponding to his/her insured period in the same way a Korean national receives Lump-sum Refund benefit.

 

By Social Security Agreement (22 countries):

Canada, USA, Germany, Hungary, France, Australia, Czech Republic,

Ireland, Belgium, Poland, Slovakia, Bulgaria, Romania, Austria,

Denmark, India, Spain, Turkey, Sweden, Brazil, Finland, Quebec

 

 

 

How to claim your pension back when you leave Korea

Claim before departure (receipt at  Incheon Airport)

 

Airport Payment Service

Eligibility: A person eligible for a Lump-sum refund for the reason of returning to the home country and is scheduled to depart through Incheon Airport within a month

 

How to apply: Visit the  nearest branch office and apply for a lump-sum refund, at which point, a request should be made for the refund to be paid at the airport.

•  A Lump-sum Refund is paid to foreigners when their departure from Korea has been confirmed.

• Application by mail (After departing from Korea) - Required documents: application (The application needs to be notarized by a notary public and then apostilled or attested by the local Korean consulate.), passport (copy), bankbook (copy)


 

 

How to monitor your taxes (National Tax Service websites):
https://hometax.go.kr/websquare/websquare.html?w2xPath=/ui/pp/index_pp.xml&menuCd=index3

https://www.nts.go.kr/english/main.do

https://www.jobkorea.co.kr/service/user/tool/incomepaycalc