Many foreign workers have inquired about taxes and National Pension enrollment.
Here is a guide on how foreign workers can enroll in the National Pension and claim a lump-sum refund.
Coverage
Eligibility for Enrollment
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Foreigners who reside in Korea long-term must pay taxes and enroll in the National Pension the same way as Korean citizens.
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Foreign workplace subscribers: Foreign employees and users aged between 18 and 60 working at businesses subject to the National Pension.
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Foreign regional subscribers: Foreigners aged between 18 and 60 who are not workplace subscribers.
Exclusions
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Trainees (training employment is eligible), students, diplomats, and others exempt from mandatory National Pension enrollment by law.
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Nationals of countries that do not mandate South Korean citizens to enroll in a similar pension system: If the laws of the home country do not apply their pension system to South Korean citizens.
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Workers dispatched to Korea from countries that have a social security agreement with Korea and who have submitted proof of enrollment in their home country's pension system.
Lump-sum Refund
Eligible for Payment
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E-8, E-9, and H-2 visas are eligible regardless of nationality (E-8 seasonal worker visa is not eligible).
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For other eligible countries, please refer to the National Pension Service website.
Refund of Insurance Premiums
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The amount paid by the individual + interest rate of a 3-year term deposit (taxable).
Claim Period
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Within 5 years from the date of departure.
If a foreigner who has the entitlement to Lump-sum Refund does not apply for the payment within five years after becoming entitled, extinctive prescription is completed and accordingly, the payment will not be made.
Even after the completion of extinctive prescription, he/she may re-apply for Lump-sum Refund within 10 years after he/she reaches age 60, or within five years after his/her death by survivors.
Required Documents
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An application for Lump-sum Refund
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Passport of an insured person
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Alien registration card of an insured person
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A copy of proof of bank account of an insured person (i.e. bank statement)
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Overseas remittance application form (if you wish to remit abroad)
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Material evidence which proves that the date of departure is within a month from the date of application. (e.g. Copy of flight ticket reservation, etc.)
Three ways of Application
In principle, a foreigner who has the entitlement to Lump-sum Refund shall apply for his/her Lump-sum Refund in person; however, in the case he/she stays overseas and is not able to visit any local office of the National Pension Service, he/she may either assign an agent to visit a local office to apply for the lump-sum refund or directly send required documents by postal mail.
1) Applying before departing from Korea (for applicants in Korea)
Apply in person by visiting the National Pension Service.
2) The payment service at Incheon International Airport.
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This service allows foreigners to receive a lump-sum refund in cash (foreign currency) at Incheon International Airport on the day of departure.
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Payments can be made in 15 currencies, including U.S. Dollar, Euro, Japanese Yen, and Chinese Yuan(Korean won cannot be paid).
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Eligibility
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A foreigner who can receive a lump-sum refund for the reason of returning to one’s home country and is planning to depart through Incheon International Airport within 1 month
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Airport payment is possible only when one’s former employer reports one’s resignation to the National Pension Service by the day before the date of departure.
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※ If the departure date falls on a Saturday, Sunday, public holiday, or the last business day in December, airport payment is not available, so Korean account transfer or overseas remittance is used.
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※ Airport payment is available if the scheduled flight departure time is between 10:30-24:00 (11:00-24:00 for Terminal 2).
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How to apply
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1. Visit a local office or counseling center of the National Pension Service(excluding Incheon Airport Pension Service Center), present your passport, alien registration card, flight ticket, and a copy of bank account, submit applications for lump-sum refund and airport payment, and then receive a “Certificate of Application Acceptance.”
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※ You must submit a Korean bank account or overseas remittance account in case you cannot receive airport payment and/or in preparation for additional payment.
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On the day of departure, submit the Certificate of Application Acceptance and passport to the NPS Incheon International Airport Pension Service Center and receive a “Direction for Payment of Lump-sum Refund(for bank submission)”(09:00-18:00).
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※ The Incheon Airport Pension Service Center is located near the No. 2 Exit of the Gate A on the first floor at Terminal 1 (regardless of one’s departure terminal, one must visit the Incheon Airport Pension Service Center).
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Less than USD 10,000: Submit the ““Direction for Payment of Lump-sum Refund” to the foreign exchange booth of Woori Bank (in front of Counter F on the 3rd floor of Terminal 1 / Counter A on the 3rd floor of Terminal 2) and then receive a “Receipt of Currency Exchange”(until 21:00).
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USD 10,000 or more: According to the Foreign Exchange Transactions Act, change a designated bank to one of the branches of Woori Bank (either the B1 floor of Terminal 1 or the B1 floor of Terminal 2), submit the “Direction for Payment of Lump-sum Refund,” and then receive the “Receipt of Currency Exchange” (until 16:00).
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The payment is made only in the terminal where you depart.
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After passing through an immigration checkpoint, hand in the “Receipt of Currency Exchange” and passport to a foreign exchange booth of Woori Bank (in front of Boarding Gate 11 of Terminal 1 / Boarding Gate 250 of Terminal 2), and then withdraw exchanged money in cash (until 21:00).
3) Applying overseas, after departing from Korea
Official documents issued overseas shall be attested by a local consulate while private documents issued overseas are subject to both notarization by a notary public and attestation by a local consulate. Any documents written in a foreign language shall be translated into Korean and notarized so that the contents can be verified in Korean.
* As for any Apostille Convention countries, an Apostille certificate is required, instead of attestation by a local consulate.
You can entrust an administrative office to handle the service on your behalf.
This is often done by visa issuance agencies.
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