Global Mobility Tax

South Korea | Korean National Health Insurance, additional assessment

Summary

From November 2025, the Korean National Health Insurance Service (“NHIS”) started to assess additional National Health Insurance (“NHI”) contributions to the employees who reported employment income through the annual income tax return in addition to the employment income reported through the local payroll withholding. It is recommended for the companies to understand the current activities of the Korean NHIS and respond to NHIS and the employees who receive the notification of the additional contributions appropriately.

The detail

General Implication

Local employees and the foreign employees on an assignment to Korean entities are subject to the Korean NHI as “the Employee Insured” individuals.

The NHI contribution is calculated at 8.008% (including long-term care insurance) on the monthly average wage paid by the local employer. The monthly contribution is shared by 4.004% between employer and employee. The monthly average wage is determined by the amount reported by the employer at the registration for the first year. By March of the following year, the employer is required to report the actual wages and salaries paid to the employee in the prior year to the NHIS. Then the NHIS calculates the final NHI contribution amount for the prior year and, in April, settles any differences between the total final NHI contribution amount and the sum of monthly amount paid throughout the prior year.

Additional contribution on income other than the remuneration paid by the local employer

In the case where an employee reports additional income such as financial income, business income, pension, and/or employment income exceeding KRW 20 million per annum through his/her individual income tax return (income other than the wages and salaries paid by the local employer, which the NHI contribution was calculated on), an additional contribution is assessed to the employee. The additional contribution is calculated at 8.008% (including long term care insurance) on all income reported excluding employment income and pension income whereas 4.004% (50%) applies on the employment income and pension income additionally reported in the individual income tax return. This additional contribution is assessed entirely to the employee.

The basis for current assessment is on the additional income reported in the immediate prior year and the additional assessment notification is being sent by the NHIS to the individual employee starting November this year, provided payable in 12 monthly installments.

Recent changes and impact

This is not a legislation newly introduced in Korea. Relevant regulations have existed, but in practice, NHIS district offices have not historically charged additional contributions on employment income to those employees who are subject to monthly NHI withholdings through local employers. However, from this year, we find many cases of employees receiving the payment voucher notifying the additional assessment based on the individual income tax returns for the tax year 2024 filed in May this year.

It is expected that the number of employees who will be notified of the additional NHI contributions will increase continuously. In general, the employees who are subject to additional assessment may be as follow:

• Outbound assignees on long-term assignment in foreign countries who file tax returns as tax residents, received employment income exceeding KRW 20 million from their overseas work location, and did not apply for a reduction in NHI contributions during the assignment period.
• Outbound assignees who repatriated from a long-term assignment in the previous year and reported additional overseas employment income exceeding KRW 20 million.
• Employees working in Korea (both local and international) who reported stock based compensation exceeding KRW 20 million in their individual income tax returns.

Suggested approach

1. Apply for a reduction of the NHI contribution with the NHIS during the assignment period upon the assignment initiation in foreign countries to suspend NHI contribution payment obligations.
2. Submit an application for adjustment to the relevant district NHIS office to explain that the additional income reported in the individual income tax return is assignment-in-a-foreign-country related benefit-in-kind items, which will not be provided upon the completion of the assignment. Acceptance of this application is totally at the NHIS district office’s discretion.
3. Apply the company’s TEQ policy and reimburse the additional contribution to the employees, as this is also a social security tax burden increased due to the assignment in foreign countries.

Contact us

For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:

Danielle Suh
Partner

Na Young Hwang
Director

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