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Taxes and contributions borne by an employee

[2] Taxes and contributions borne by employees

(1) Withholding tax (Income Tax)

(2) Four major insurances (borne by individuals)
    National pension
    Health insurance
    Employement insurance
    Industrial accident compensation insurance

1. Withholding tax borne by executives and employees

(1) When an employee receives salary from a company, there is a year-end settlement process (annual tax settlement) to calculate the amount of income tax on the total annual salary.

(2) However, the company withholds the monthly income tax on the employee's salary at the time of paying the monthly salary. The procedure involves the company withholding the monthly income tax on the salary and paying it to the tax office of the company's jurisdiction by the 10th of the following month.

(3) At the end of the year, the current company where the employee works calculates the income tax on the salary by aggregating the annual salary income for each individual employee and deducting the tax amount already withheld during the year. This is called the year-end tax settlement for employees. The monthly tax withholding amount is deducted as the paid tax amount during the year-end tax settlement, so the monthly tax withholding amount is considered as pre-paid tax.

2. Four types of major insurance

insurances are not taxes but contributions that all employees must pay.
Employees can receive salary only after deducting premiums for the four major insurances. In general, companies bear a half of the premiums for the four insurances while the remaining half is borne by employees.

(1) Basic information

Category	National Pension	Health Insurance	Employment Insurance	Industrial Accident Insurance
Subject	Workers and employers aged 18 or older but under 60 years old.	all workers and employers	all workers	all workers
Non-applicable to	- Working less than 1 month - Working less than 60 hours per month	- Working less than 1 month - Working less than 60 hours per month	- Individuals over 65 years old - Workers who work less than 60 hours per month (However, they must be enrolled if they are provided with employment for three months for the purpose of livelihood.)	None
Rate	9% of the total salary amount	6.46% of the total salary amount	Unemployment insurance: 1.3% of total wages (1.6% 19.10.01부터)	vary by type of business
Rate	9% of the total salary amount	Long-term care: 8.51% of National Health Insurance premium	Employment safety: 0.25% of total wages (for businesses with less than 150 employees)	vary by type of business
Premium share	Workers and employers each bear 50% of the burden	Workers and employers each bear 50% of the burden	orkers and employers each bear 50% of the burden	the employer
Premium share	Workers and employers each bear 50% of the burden	Workers and employers each bear 50% of the burden	Employment safety insurance is fully borne by the employer.	the employer
Monthly income max/min limits	The upper limit: 4.21 million won	The upper limit:78.1 million won	None	None
Monthly income max/min limits	The bottom limit: 270,000 won	The bottom limit: 280,000 won	None	None
Acquisition and loss declaration	By the 15th of the following month that the business belongs to.	By the 15th of the following month that the business belongs to.	By the 15th of the following month that the business belongs to.
Settlement system	No settlement	Insurance premiums are calculated based on the income confirmed by the business in February of the following year (May for individual business owners), and are imposed on the insurance premiums for April (June for individual business owners).	Report the total amount of compensation and settle it by March 15th of the following year

1) The notification of establishment of a workplace must be submitted within 14 days from the date of hiring an employee.

2) If the total annual income from business is more than 5 million won and the individual is registered as a business owner, the individual is excluded from being a dependent and is charged health insurance premiums based on their location.

3) For employed individuals whose annual comprehensive taxable income, excluding compensation, is 34 million won or more, an additional "income-based insurance premium" is charged in addition to the regular insurance premium.

(2) The rate of four major insurances to be borne

1) Employee's Share (appx. 9.3%)
Health Insurance: 3.495%, Long-term Care Insurance: 12.27% of Health Insurance Premium,
National Pension: 4.5%, Employment Insurance: 0.9%, Industrial Accident Insurance: None for employees

2) Employer's Share (Appx. 10-11%)
Health Insurance: 3.495%, Long-term Care Insurance: 12.27% of Health Insurance Premium,
National Pension: 4.5%, Employment Insurance: 1.15%, Industrial Accident Insurance: Differentiated by industry.