How to Generate Payslips in South Korea (4 Major Insurances)

Why South Korean Payslips Require Precision

Under the Korean Labor Standards Act (Geunro Gijun Beop), employers must provide employees with a detailed pay statement every pay period. The South Korean payslip, known as a geupyeo myeongseseo, must clearly itemize gross pay, the four major social insurance contributions, income tax withholding, and net pay.

South Korea's payroll system revolves around the 4 major insurances (4 dae boheom), a social safety net that both employers and employees fund. Miscalculating these contributions can trigger penalties from the National Tax Service (NTS) and the relevant insurance agencies.

Understanding South Korea's 4 Major Insurances

The 4 major insurances form the core of Korean payroll deductions. Here is a detailed breakdown:

Insurance	Employee Share	Employer Share	Total
National Pension (Gungmin Yeonkeum)	4.5%	4.5%	9.0%
National Health Insurance (Gungmin Geongang Boheom)	3.545%	3.545%	7.09%
Long-term Care Insurance	12.81% of health insurance premium	12.81% of health insurance premium	Included with health insurance
Employment Insurance (Goyong Boheom)	0.9%	0.9%-1.5%	Varies by company size
Industrial Accident Insurance (Sanjae Boheom)	0%	0.7%-18.6%	Employer only; rate varies by industry

Tax Withholding

Tax	Rate	Notes
Income Tax (Sodeugsae)	Progressive (6%-45%)	Based on simplified tax tables provided by NTS
Local Income Tax (Jibang Sodeugsae)	10% of income tax	Automatically calculated as a fixed surcharge

Local income tax in South Korea is straightforward: it is always exactly 10% of the national income tax amount, making it easy to calculate once you have determined the income tax.

Step-by-Step: Generate a South Korea Payslip with CleverSlip

Step 1: Set Up Your Company Profile

Log in to CleverSlip and enter your company details, including your business registration number (saeopja deungnok beonho), company name, and address. These are required fields on every Korean payslip.

Step 2: Select the South Korea Payslip Template

Choose the South Korea payslip template from CleverSlip's template library. This template includes pre-built fields for all 4 major insurances, income tax, and local income tax, ensuring full compliance with Korean labor law.

Step 3: Enter Employee Details

Input the employee's name, resident registration number (or foreigner registration number), position, department, and hire date. Also enter the employee's number of dependents and family members qualifying for tax deductions, as these affect the monthly simplified withholding tax amount.

Step 4: Input Earnings

Enter all earnings components:

• Base salary (gibongeum)
• Overtime pay (yeonjanggeullo sudang) - 150% of hourly rate for hours beyond 40 per week
• Night work premium (yagan geunmu sudang) - additional 50%
• Holiday work premium (hyuil geunmu sudang) - additional 50%
• Meal allowance (sikdae) - up to 200,000 KRW per month is non-taxable
• Vehicle maintenance allowance - up to 200,000 KRW per month is non-taxable for eligible employees

Step 5: Review Auto-Calculated Deductions

CleverSlip calculates all mandatory deductions automatically:

• National Pension at 4.5% of monthly remuneration (capped at a ceiling amount updated annually)
• National Health Insurance at 3.545% of monthly remuneration
• Long-term Care Insurance at 12.81% of the health insurance premium
• Employment Insurance at 0.9% of gross pay
• Income Tax using the NTS monthly simplified tax tables based on salary and dependents
• Local Income Tax at 10% of the calculated income tax

Step 6: Download and Distribute

Review the completed payslip for accuracy. Download it as a PDF and provide it to the employee. CleverSlip retains a copy in your account, making it easy to retrieve records for the annual year-end tax settlement (yeonmal jeonsan) process.

Key Compliance Reminders

• National Pension contributions are capped at a monthly standard income ceiling, which is adjusted every July.
• The year-end tax settlement in February or March requires employers to reconcile actual tax liabilities against monthly withholdings.
• Employers must report the 4 major insurance premiums to the National Health Insurance Service (NHIS), which acts as the collection agency for all four programs.
• Severance pay (toejikgeum) of at least 30 days of average wages per year of service is mandatory for employees with one or more years of continuous service.

CleverSlip's South Korea template ensures every line item for the 4 major insurances and tax withholding is correctly calculated and clearly displayed on the payslip.