Statutory Social Insurance Tips in 2021

l Increase in Premium Rates for the Statutory National Health Insurance and the Long-Term Care for the Elderly in 2021

Effective from January 1, 2021, the premium rate of the National Health Insurance has been increased from 6.67% to 6.86% of monthly salary income (excluding non-taxable income). Employer and employee portion each has risen from 3.335% to 3.43%, respectively. The premium rate of the Long-Term Care for the Elderly (surcharge of the national health insurance) has also been increased from 10.25% to 11.52% of the National Health Insurance premiums.

As an example, if an employee’s monthly average taxable salary is KRW 5,600,000, the employee portion of the National Health Insurance and the Long-Term Care for the Elderly premiums are calculated as follows:

	2020	2021
National Health Insurance	5,600,000 * 3.335% = 186,760	5,600,000 * 3.43% = 192,080
Long-Term Care Insurance	186,760 * 10.25% = 19,143	192,080* 11.52% = 22,128

The total National Health Insurance rate including the Long-Term Care for the Elderly rate is around 3.8251% for employer and employee, respectively.

l Rate Change for the Statutory Industrial Accident Compensation Insurance in 2021

Effective from January 1, 2021, the premium rate of the Industrial Accident Compensation Insurance (IACI) has been changed ranging from 0.60% to 18.5% (which varies depending on the type of business).

l Annual Settlement of Statutory Social Insurance Premiums required in April 2021 (excluding National Pension)

Employers are required to perform annual settlement of statutory social insurance premiums in March of the following year after each calendar year end for the national health insurance, employment insurance and industrial accident compensation insurance, and reflect any overpayment (underpayment) during the year resulting from the annual settlement in April payroll accordingly. On the other hand, there is no annual settlement required for national pension.

For national health insurance, if the additional insurance resulting from 2020 year-end settlement is greater than the April 2021 insurance amount, employees may choose to pay by installment over 2 - 10 months starting from April 2021.

For your future reference, the statutory social insurance rates in effect for year 2021 can be summarized as below:

Social Insurances:

Employee portion

Employer portion

Total

Remark

National Pension (NP)

4.5%

9.0%

Monthly contribution ceiling of Won 226,350 each

National Health Insurance (NHI)

a. NHI

b. Long-term Care Insurance

for the Elderly (NHI-LTCI)

3.43%

11.52%

3.43%

11.52%

6.86%

23.04%

Monthly contribution ceiling of Won 3,523,950 each

Assessed at 11.52% of NHI premium above

Employment Insurance (EI)

0.8%

1.05%

~1.65%

1.85%

~2.45%

Vary depending on the number of employees

Industrial Accident Compensation Insurance (IACI)

NIL

0.60%

~18.5%

0.60%

~18.5%

Vary depending on type of business