---
title: "The Four Major Social Insurances in Korea: Employer Guide"
description: "Korea's four major social insurances explained for foreign employers: what each covers, who pays, enrolment timing, and the mistakes that trigger penalties."
---

[Pearson Korea Blog](https://blog.pearsonp.com)

# [The Four Major Social Insurances in Korea: Employer Guide](https://blog.pearsonp.com/the-four-major-social-insurances-in-korea-employer-guide)

 Written by [Irene Kim](https://blog.pearsonp.com/author/irene-kim) | Oct 14, 2026, 6:54:53 AM

Every employer in Korea must enrol employees in four mandatory social insurance schemes. Foreign companies rarely dispute the requirement. What catches them out is the administration: when enrolment has to happen, who pays which share, and what triggers an adjustment.

This guide covers the four major social insurances in Korea from an employer's perspective, including where foreign companies most often go wrong.

## The Four Schemes

### National Pension

Korea's public retirement scheme. Contributions are shared between employer and employee. Foreign nationals may be covered, exempt, or subject to special treatment depending on their nationality and any social security agreement between Korea and their home country, so check this per employee rather than assuming.

### National Health Insurance

Covers medical care, and includes a long-term care component. Shared between employer and employee. This is the insurance employees notice most, since it governs their access to healthcare and that of their dependents.

### Employment Insurance

Funds unemployment benefits and employment support programmes. Shared, though the employer portion includes elements the employee does not contribute to.

### Industrial Accident Compensation Insurance

Covers workplace injury and occupational illness. Generally funded entirely by the employer, with rates varying by industry risk classification.

**Setting up payroll for your Korean team? [Talk to Pearson & Partners Korea](https://pearsonkorea.com/contactus/) about enrolment and ongoing administration.**

## Who Pays What

Three of the four are shared, with the employer deducting the employee's portion from salary and remitting it alongside its own contribution. Industrial accident insurance is generally an employer-only cost.

The practical implication for budgeting is that an employee's cost to you is meaningfully higher than their gross salary. Add employer-side insurance contributions and accruing severance, and a salary figure alone understates the real number.

Contribution rates are set by regulation and revised periodically, including the ceilings and floors that apply to the contribution base. Verify current rates when budgeting rather than relying on figures from a previous year.

## Enrolment Timing

Enrolment is not something to handle at the end of the first month. Each scheme has its own reporting deadline tied to the employee's start date, and late enrolment can bring retroactive contributions and penalties.

The same applies at the other end. Departures must be reported, and failing to deregister leaves contributions running for someone who no longer works for you.

## Changes That Trigger Adjustments

- **Salary changes.** The contribution base updates, which means reporting rather than waiting for an annual reconciliation.
- **Leave.** Parental leave and certain other absences affect contribution treatment.
- **Working hour changes.** Moving an employee below or above thresholds can change coverage.
- **Annual settlement.** Reconciliation against actual earnings can produce an additional payment or a refund.

## Where Foreign Employers Go Wrong

**Budgeting salary only.** The most common error. Employer-side contributions plus severance accrual add materially to the cost of each hire.

**Assuming foreign employees are exempt.** Coverage for foreign nationals depends on nationality and applicable agreements. Some are exempt from certain schemes, many are not. Verify per person.

**Treating contractors as outside the system.** If the relationship is really employment, the obligations apply regardless of the contract label, and back contributions can be assessed.

**Missing enrolment deadlines.** Especially common when the first hire happens before payroll processes are properly set up.

**Forgetting deregistration.** Contributions continue for departed employees until the change is reported.

**Not confirming the industry rate.** Industrial accident insurance rates vary by risk classification, so the applicable rate depends on your actual business activity.

**Want this handled rather than monitored? [Pearson & Partners Korea](https://pearsonkorea.com/contactus/) runs payroll and insurance administration for foreign employers in Korea.**

## If You Use an Employer of Record

Under an EOR arrangement, the EOR is the legal employer and handles enrolment, contributions, reporting, and adjustments. For companies hiring one or two people in Korea, that removes the entire administrative burden described above.

It does not remove the cost, which still reaches you through the service arrangement, and it does not suit every situation. Our comparison of [EOR versus establishing your own entity](https://pearsonkorea.com/insights/) sets out where each route works.

## A Short Checklist

1. Confirm which schemes apply to each employee, including foreign nationals
2. Check current contribution rates rather than using last year's figures
3. Confirm your industrial accident rate against your actual business activity
4. Enrol within the statutory deadline from the start date
5. Report salary changes, leave, and departures promptly
6. Budget total employer cost including contributions and severance accrual

## Work With Pearson & Partners Korea

Pearson & Partners Korea handles payroll and the four mandatory social insurances for foreign companies operating in Korea. Our wider services cover company incorporation and branch registration, Employer of Record (EOR), tax and accounting, and visa advisory including D-8 sponsorship.

More at [pearsonkorea.com](https://pearsonkorea.com/) and our [Insights hub](https://pearsonkorea.com/insights/).

**Contact us:**  
 Web: [pearsonkorea.com/contactus](https://pearsonkorea.com/contactus/)  
 Phone: 02 6952 7579  
 Office: 서울특별시 강남구 영동대로 511, WTC 트레이드타워 30층 (06164)

The [Ministry of Employment and Labor](https://www.moel.go.kr/) publishes official guidance on employer obligations.

## Frequently Asked Questions

**What are the four major social insurances in Korea?**  
National pension, national health insurance, employment insurance, and industrial accident compensation insurance.

**Who pays for them?**  
Three are shared between employer and employee. Industrial accident insurance is generally employer-funded.

**Are foreign employees covered?**  
It depends on nationality and any applicable social security agreement. Some foreign nationals are exempt from certain schemes. Confirm per employee.

**When must I enrol a new employee?**  
Each scheme has a reporting deadline tied to the start date. Late enrolment can bring retroactive contributions and penalties.

**Do contractors need to be enrolled?**  
Genuine independent contractors generally are not, but authorities assess the substance of the relationship. Misclassification can lead to back contributions.

**Does an EOR handle this?**  
Yes. The EOR is the legal employer and manages enrolment, contributions, and reporting.

If you are establishing your own entity to employ directly, our [company incorporation services](https://pearsonkorea.com/ourservice/incorporation/) cover registration and the steps that follow.

[View full post](https://blog.pearsonp.com/the-four-major-social-insurances-in-korea-employer-guide)

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