Insurance premium tax credit for foreign employees — up to ₩120,000, if the policy and the people on it qualify

Most foreign employees in Korea carry at least one insurance policy — actual-loss medical insurance, accident cover, car insurance. If the policy is the right type and is in the right names, the premiums earn a small but easy tax credit.

All figures are for the 2026 tax year under the normal method. With the 19% flat rate this credit does not apply.

How much you get back

The credit is 12% of protection-type premiums, on up to ₩1 million a year:

Monthly premium	Paid in a year	Credit
₩30,000	₩360,000	₩43,200
₩50,000	₩600,000	₩72,000
₩80,000	₩960,000	₩115,200
₩100,000 or more	₩1,200,000+	₩120,000 (limit)

Local income tax falls by another 10% of the credit, so the full ₩1 million is worth ₩132,000 in total. Insurance designed for a person with a disability has its own ₩1 million limit at 15% (up to ₩150,000).

Which policies count

The rule of thumb: if the policy pays back more than you paid in at maturity, it does not count.

Counts	Does not count
Actual-loss medical insurance (실손보험)	Savings-type insurance
Cancer, illness and accident insurance	Annuity insurance (pension savings is a separate credit)
Term and whole life insurance	Variable insurance of the savings type
Car insurance, mandatory or comprehensive	Group insurance paid fully by your employer

Car insurance is the one people forget. It sometimes does not appear in the Hometax simplified data — ask the insurer for a payment certificate if your other policies have not already reached ₩1 million.

Policies from your home country

The credit is built around insurance contracts in Korea. Policies from an insurer in your home country do not appear in the Hometax data, and whether they qualify is not clear-cut — ask your employer before you count on one. What the Hometax data leaves out in general is listed in our Hometax PDF guide.

The policyholder and the insured both matter

Paying the premium is not enough on its own:

• The policyholder must be you or a dependent you claim, and
• The insured person must be you or a dependent you claim under the dependents rules

Policy	Credit
You are the policyholder and the insured	✅
You are the policyholder, your child (claimed as a dependent) is insured	✅
You are the policyholder, your working spouse is insured	❌ your spouse is not your dependent
Your working spouse is the policyholder, you are insured	❌ the policyholder must also be you or your dependent
You are the policyholder, a parent with income above the limit is insured	❌ fails the income test

If you and your spouse both work and each insured the other, neither of you gets the credit for those policies.

Why a low salary can shrink the credit

The insurance credit belongs to the “itemized” group, together with medical, education and donation credits and the health insurance premium deduction. If you claim nothing in that group, you get a flat ₩130,000 standard credit instead. The year-end settlement uses whichever gives the lower tax.

For a single person with no other deductions, the calculator gives:

Total salary	₩1 million of premiums lowers income tax by
₩30,000,000	₩100,277 — not ₩120,000, because the standard credit is given up
₩40,000,000	₩120,000
₩50,000,000	₩120,000

Around ₩30 million and below, your health insurance deduction is small, so the standard credit is the better deal until the insurance credit is added. Above that, itemizing already wins and the full ₩120,000 applies.

National Health Insurance is a different item

The National Health Insurance and employment insurance taken from your monthly pay are not this credit. They are a separate income deduction that your employer takes from your payroll records, so you do not need to submit anything for them, and they do not use up the ₩1 million limit. (They sit in the same itemized group as above, which is why they decide whether itemizing beats the standard credit.)

What to check before you submit

Check	What to look for
Is every policy in the Hometax data?	Car insurance and group insurance are sometimes missing — get a certificate from the insurer
A policy you cancelled	Premiums paid before cancelling still count
Premiums your employer paid	Only the part you paid yourself counts
Unpaid months	Only premiums actually paid in the tax year count

Check it with your own numbers

In the calculator, open step 2 and enter your annual premiums in the protection insurance field. It compares the standard credit and itemizing automatically and shows how much the premiums change your result.