The first time you look at a Korean payslip, the gap between your gross salary and the amount that actually lands in your account can be surprising. That gap is not a mistake — it is a set of mandatory deductions that every employee in Korea shares, plus income tax withheld on your behalf. Once you know what each line is, your payslip stops being a mystery and becomes something you can predict.

This guide walks through the four main deductions, who pays for what, and why the numbers change slightly from year to year. It is written for general understanding rather than as tax advice — exact rates are set annually by the relevant authorities, so always confirm current figures before making a decision.

Gross pay vs. take-home pay

Your gross pay (세전 급여) is the salary you agreed to in your contract. Your take-home pay (실수령액), sometimes called net pay, is what remains after deductions. In Korea, the deductions fall into two buckets:

  • The four major insurances (4대 보험) — social insurance contributions shared between you and your employer.
  • Income tax — national income tax plus a local income tax, withheld from each paycheck and reconciled once a year.

1. National Pension (국민연금)

National Pension is Korea's public retirement scheme. Contributions are calculated as a percentage of your monthly income and are split evenly between you and your employer, so you only see half of the total on your payslip. There is an upper and lower income band used to calculate the contribution, which means very high earners contribute a capped amount rather than a percentage of their entire salary.

The important thing to remember: this is a contribution toward your own future pension, not simply a tax. The income bands are reviewed periodically, so the exact deduction can shift year to year.

2. National Health Insurance (건강보험)

Health insurance funds Korea's national medical system. Like the pension, the contribution is a percentage of your income and is shared with your employer. Layered on top of health insurance is a separate long-term care insurance (장기요양보험) contribution, which is calculated as a percentage of your health insurance premium rather than of your salary directly.

Because there are two linked components here, health insurance is often the deduction people find hardest to reproduce by hand — which is exactly the kind of thing a calculator is good for.

3. Employment Insurance (고용보험)

Employment insurance covers unemployment benefits and job-training programs. The employee share is a relatively small percentage of income, again matched (and then some) by the employer, who also funds additional employment-stability and vocational programs. For most employees this is the smallest of the four deductions.

4. Income tax (소득세) and local income tax (지방소득세)

Income tax works differently from the insurances. Rather than a flat percentage, your employer withholds tax each month based on a simplified withholding table (간이세액표) that accounts for your salary level and the number of dependents you claim. On top of the national income tax, a local income tax equal to a fixed proportion of your income tax is also withheld.

Because monthly withholding is only an estimate, Korea runs an annual year-end tax settlement(연말정산) — often called the "13th-month bonus" when it results in a refund. During settlement, deductions and credits for things like medical spending, education, rent, and card usage are applied, and any over- or under-withholding from the year is corrected.

Putting it together

For a rough mental model, take-home pay looks like this:

Take-home pay = Gross pay − (National Pension + Health Insurance + Long-term Care + Employment Insurance + Income Tax + Local Income Tax)

Two people with the same gross salary can still see different take-home amounts, mainly because of the number of dependents they claim and any non-taxable allowances (such as a meal allowance up to the tax-exempt limit) built into their pay. That is why a good take-home pay calculator asks for dependents and non-taxable pay, not just your salary.

Why the numbers move each year

Contribution rates and income bands for the four insurances are reviewed annually, and tax tables are updated alongside changes to law and policy. A calculation that was correct last year may be slightly off this year. When the stakes matter — negotiating an offer, planning a budget — use a tool that is kept current, and verify against official sources or a qualified professional for anything consequential.

If you want to see your own numbers rather than the general shape of them, CalKit's take-home pay calculator lets you enter your gross salary, dependents, and non-taxable allowance and returns an itemized estimate in seconds.