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Office workers receiving their January paychecks are bracing for a bit of a shock. Simultaneous increases to national pension, health insurance, and long-term care insurance premiums mean that, without a corresponding raise, take-home pay will likely be smaller this month.
◇ “The salary is the same, but why did it decrease?”···Simultaneous increase in pension and insurance premiums
“As rates rise, even with the same salary, deductions increase and monthly actual income inevitably decreases,” explained labor attorney Kim Hyo-shin on YTN Radio’s ‘News FM Wise Radio Life’ on January 2, 2026. “If there was no salary increase, it’s normal for January’s salary to feel lower than last month.”
Beginning January 1, 2026, premiums for national pension, health insurance, and long-term care insurance—three of the four major insurance policies—all increased. This means even if your nominal salary hasn’t changed, your January paycheck may be smaller than what you received at the end of last year.
The national pension insurance premium rate increased by 0.5 percentage points, from 9% to 9.5%, with both workers and employers contributing 4.75% each. The health insurance premium rate also rose, from 7.09% to 7.19%, and the long-term care insurance premium was adjusted upward from 12.95% to 13.14% of the health insurance premium.
◇ Even with the minimum wage increase, the perceived effect is limited.
This year’s minimum wage is 10,320 won per hour, a 2.9% increase over the previous year. Based on a standard 40-hour work week, this translates to a monthly income of approximately 2,157,000 won.
“The minimum wage has increased, but when you factor in the rise in pension and insurance premiums, the actual increase may not be significant,” Attorney Kim said. “Workers earning minimum wage will likely feel the burden of these deductions most acutely.”
◇ The upper and lower limits of unemployment benefits are also adjusted.
The increase in the minimum wage also prompted adjustments to unemployment benefit standards. The daily maximum unemployment benefit increased from 66,000 won to 68,100 won this year. The lower limit is now 66,048 won per day, equating to approximately 1,981,000 won per month, with a monthly maximum of around 2,043,000 won.
Attorney Kim explained that unemployment benefits are not subject to taxes, meaning recipients receive the full payment. However, to qualify, individuals must have a minimum of 180 days of employment insurance contributions. “Based on a five-day work week, that’s roughly seven and a half months of work,” he clarified, adding that voluntary resignation disqualifies individuals from receiving benefits, regardless of their employment duration.
◇ IMF “Minimum wage increase will burden employment in the mid to long term”
Concerns about the impact of minimum wage increases on employment persist. A report released by the International Monetary Fund (IMF) in November of last year analyzed that “the impact on employment is limited for about a year immediately after the minimum wage increase, but the effect of lowering the employment rate begins in earnest from the 3rd to 4th year.”
The IMF stated, “If the minimum wage is increased by 10% in a region with a population of 1 million, employment may decrease by about 10,000 people.” This analysis focused on European Union (EU) countries with a single minimum wage system, similar to Korea.
