Important Changes in Premium Assessment/Collection (since 2011)
Base assessment used to assess premiums: “Wages” “Earned income taxable”
Assessment & billing of premiums on a monthly basis:
- Monthly premiums shall be assessed & billed by the COMWEL, and then, collected by the NHIC.
- However, workplaces engaging in business types (e.g. construction, lumbering, etc.) for which it’s difficult to identify employment status, total wages, etc., and consequently, assess & bill premiums on a monthly basis shall declare and pay self-assessed premiums, in which the COMWEL shall finalize, bill and collect premiums due to them.
- Collection of premiums by business type
Collection of premiums by business type
|Workplaces by business type
|All workplaces engaging in other business types than construction, etc.
|Workplaces engaging in construction equipment operation (as categorized as construction business)
|Small-/medium-sized workplaces, special types of workers (as categorized for the purpose of WCI/EI coverage)
|Workers seconded overseas engaging in other business types than construction
|Workplaces engaging in construction (including their principal office)
||Self-assessed & declared by an employer
|Workplaces engaging in lumbering (as categorized as forestry business)
|Workers seconded overseas engaging in construction
Declaration of total wages paid for the previous year
- An employer shall submit a “Declaration of Total Wages”for the previous year not later than the end of February every year; the submitted will be used to settle premiums overpaid or underpaid in the previous year and assess monthly average wages for the year (i.e. the next year of the said previous year).
- The COMWEL shall assess and bill monthly premiums for the year based on monthly average wages for the year that will be estimated using total wages for the previous year as specified on the submitted declaration
Declaration of employment information
- An employer shall report employment information (e.g. worker’s name, resident registration number, address, employment date, employment termination date, average monthly wages, time-off from works, transference, etc.) using relevant declaration forms.
R4AV (Relief for Asbestos Victims) Assessment
- Workplaces with 20 full-time workers or more (not engaging in construction), or workplaces or “WCI-Deemed-as-Single Workplaces” engaging in construction (including their principal offices) shall bear and pay R4AV (Relief for Asbestos Victims) Assessment.
- R4AV newly established in 2011: 5/100,000 (Notification No. 2010-175 of the MOE (Ministry of Environment))
Declaration & Payment of Premiums (by workplaces engaging in construction, etc. subject to self-assessment of premiums)
The employer of a workplace subject to the self-assessment of premiums shall submit a Declaration of WCI/EI Premiums to a COMWEL branch office not later than the 31st day of March** every (insurance) year that contains estimated wages for the year* multiplied by premium rating corresponding to a business type the workplace engages in.
* refers to the period ranging from the establishment day of insurance relations to the end of the insurance year if they have been established during the insurance year.
** refers to “not later than 70 days after the establishment day of insurance relations if they have been established during the insurance year” or “the day before a construction project whose period is given has come to an end if the said end is within 70 days after the said establishment day.
Self-assessment of WCI premiums
- Principal office of a workplace engaging in construction: Estimated wages in total paid to all workers for the year multiplied by premium rating
- Premiums = Estimated wages in total paid to all workers for the year X Premium rating
- Workplace engaging in construction or lumbering for which it’s difficult to estimate wages in total: Wages in total (estimated using labor rate officially announced by the Minister of the MOEL) multiplied by premium rating
- Estimated premiums for a workplace engaging in construction = (Contract amount X Labor rate) X premium rating
- Finalized premiums for a workplace engaging in construction = [Direct labor costs + (Subcontracting costs × Subcontracting labor rate)] × Premium rating
- Premiums for a workplace engaging in lumbering = Loadage X Labor rate X Premium rating
Self-assessment of EI premiums
- Premiums burdened on employer: (Total wages X Premium rating dedicated to Employment Stabilization & Working Capacity Development Program) + [(Total wages X Premium rating dedicated to Unemployment Benefits X 1/2)
- Premiums burdened on worker: (One’s total wages X Premium rating dedicated to Unemployment Benefits) x 1/2
- Premiums for self-employer:
- Monthly wages applicable toself-employer (the Minister of the MOEL officially announces considering various factors (e.g. self-employers’ income level, etc.)) multiplied by premium rating dedicated to Employment Stabilization & Working Capacity Development Program
Premiums = Monthly wages applicable to self-employer (officially announced by the Minister of the MOEL) X Premium rating dedicated to Employment Stabilization & Working Capacity Development Program X No. of total months for the insurance year
Payment of WCI/EI premiums (by workplaces engaging in construction, etc. subject to self-assessment of premiums)
- Since, in principle, the employer of a workplace engaging in construction, etc. shall declare and pay self-assessed WCI/EI premiums, he/she shall the said-assessed WCI/EI premiums through agencies authorized to receive national revenues (e.g. commercial banks) or post offices before a due date.
- If an employer pays the full amount of estimated premiums payable in installments within a due date, he/she is entitled to a 3% discount.
- Quarterly due dates for the payments of the said estimated premiums in installments are as follows: March 31 for the 1st quarter May 15 for the 2ndquarter August 15 for the 3rd quarther and November 15 for the 4thquarter
Assessment of Monthly Premiums (for workplaces subject to premium billing by the COMWEL)
Assessment of monthly premiums
- The employer of a workplace not subject to the self-assessment of premiums shall be billed premiums assessed by the COMWEL; the billed premiums shall be assessed by multiplying monthly average wages in total by the corresponding premium rating:
- Monthly average wages for a worker who was employed before September of the previous year shall be assessed through dividing his/her total wages for the same year by the number of months for which he/she has been employed for the same year, while those for a worker employed after October of the previous year through dividing total wages payable to the worker for one year to come (after his/her employment) by the number of months for one year.
Declaration of total wages
- Monthly premiums overpaid or underpaid for the year shall be settled upon receipt of a Declaration of Total Wages that shall be submitted not later than the end of February in the next year.
- The said declaration shall contain total wages paid to each worker for the previous year (including his/her worker’s name, resident registration number, employment date, employment termination date, monthly average wages for the previous year, monthly average wages estimated for the year, etc.)
- An employer owning a workplace with 10 workers or more shall report information about their wages in total on the Internet (http://total.kcomwel.or.kr) or any other electronic media (e.g. CD, etc.)
Payment of premiums
- Workplaces (except for workplaces subject to the self-assessment of premiums) shall be billed premiums due to them on a monthly basis; as of now, however, all premiums due to the said workplaces in accordance with the 4 major social insurance schemes shall be integratively billed by the NHIC. Accordingly, WCI & EI premiums, together with premiums billed in accordance with other social insurance schemes, will be integratively billed and collected by the NHIC. Upon receipt of a billing statement, a workplace shall pay the billed premiums not later than the 10th day of the next month.