April Paychecks May Shrink as Annual Health Insurance Premium Settlement Kicks In
April paychecks for salaried workers in South Korea may be lower due to the annual health insurance premium settlement based on the previous year's income.Summary
For salaried workers in South Korea, April paychecks can vary significantly due to the annual health insurance premium settlement. This settlement reconciles the difference between premiums paid based on the compensation from two years prior and the actual total compensation from the previous year. Workers who experienced income increases, such as through promotions or bonuses, will likely owe additional premiums, while those with decreased wages will receive a refund. In 2024, 10.3 million workers paid an average of 203,555 won in additional premiums, while 3.53 million received an average refund of 117,181 won. The system doesn’t represent a sudden premium increase, but rather a deferred payment structure designed to ease the administrative burden on employers. Workers owing significant amounts can pay in up to 12 installments, and refunds are automatically applied. This year, the settlement process was simplified through automatic data linkage with the National Tax Service (NTS), reducing administrative workload and potential errors.
(Source：서울경제)