What actually comes out of your paycheque in Korea, month by month
Korean hagwons deduct pension, health insurance and income tax from your stated salary. The amounts change in your second year, and most teachers only find out when the number hits their account.
Park English · Published 2026-08-22 · Updated 2026-08-22 · 3 min read
Your contract says 2.3 million won a month. Your first paycheque is 2.09 million. The second is 2.05 million. A year later it drops to 1.99 million, and nobody warned you.
Here is what comes out, when it starts, and why the deductions grow.
Four deductions, two of them delayed
Every Korean employer withholds four things:
| Deduction | Rate | When it starts | Monthly cost at ₩2.3m salary |
|---|---|---|---|
| Income tax | ~4–6% | Month 1 | ₩95,000–₩135,000 |
| Local income tax | 10% of income tax | Month 1 | ₩9,500–₩13,500 |
| National Pension | 4.5% | Month 1 | ₩103,500 |
| Health insurance | ~3.5% | After 3–6 months | ₩80,000 |
Income tax varies by your withholding bracket. Some schools withhold the minimum; others overestimate and you get a refund in May when you file. Local income tax is always ten percent of whatever income tax they took.
Pension starts immediately. You pay 4.5%, the school matches it, and you collect both halves when you leave if you have worked at least six months and apply through the National Pension Service.
Health insurance does not start until the National Health Insurance Corporation processes your alien registration card, which can take three to six months. When it does start, they backdate it to your arrival date and split the lump sum across a few months. That is why your fourth or fifth paycheque is suddenly smaller — you are catching up.
What you actually take home
In the first two or three months, before health insurance begins:
₩2,300,000 − ₩210,000 = ₩2,090,000
Once health insurance starts:
₩2,300,000 − ₩290,000 = ₩2,010,000
If your housing is separate rather than deducted, those numbers stay. If the school deducts ₩400,000 for housing, your actual take-home after all withholdings is closer to ₩1,610,000.
The February surprise
Every February the National Health Insurance Corporation recalculates your premium based on last year's actual salary, not the estimate. If you started mid-year or got a raise, your premium can jump twenty or thirty thousand won without warning. Schools do not always mention this.
The second-year drop
In your second year, pension and health insurance together can rise by ₩20,000–₩40,000 a month because the government raises the rates annually and because your salary base is now a full twelve months instead of partial. Some teachers see their net pay fall even though their contract salary stayed the same.
Severance does not come out of your pay
Severance is not withheld. The school sets it aside separately and pays it in a lump sum when you complete your contract. One month's salary for each full year worked. If you quit early or are fired for cause, you lose it.
What happens when you file your tax return
Between January and May you file through your school or alone at the tax office. Most E-2 teachers get a small refund — ₩100,000 to ₩400,000 — because schools withhold conservatively. If you left Korea mid-year and did not file, you forfeit it.
The pension refund is separate. You apply after you leave Korea, and it can take two to four months to arrive in your foreign bank account. You get back everything you paid in, plus the employer match, minus a small tax.
The one thing we see constantly
Teachers pick their salary based on the contract figure and then panic when the first transfer is ten percent smaller. We have walked three teachers this year through the health insurance backdate alone, because the school did not explain it and the teacher thought they were being shorted. They were not. The system is just on a delay, and nobody writes it down in onboarding.