“When the monthly salary rises 17.6% for 5 years, the small tax and social insurance premiums increase by 39.4%”


Over the past five years, workers’ wages have increased by an average of 17.6%, but salaries and income tax and social insurance premiums have increased by 39.4%.

The Korea Economic Research Institute under the Federation of Korean Industries announced today (6th) that, as a result of analyzing data from the Ministry of Employment and Labor for the period from 2016 to 2021, the rate of increase in wage and social insurance premiums withheld was more than twice as high as wages on a point basis (p).

According to the Korea Economic Research Institute, the monthly wage of workers in businesses with one or more employees increased by 17.6% from 3.1 million won in 2016 to 3653 thousand won last year.

However, earned income tax and social insurance premiums increased 39.4% from 363,000 won in 2016 to 507,000 won last year.

In particular, the labor income tax burden increased by 70.6% from 102,740 won in 2016 to 175,260 won last year.

This is because the income tax bracket has not changed since 2010, Hankyun explained.

This is because, even if the salary rises due to the effect of inflation, the higher taxable range is applied to the wage and salary income tax, which has the effect of automatically increasing the tax rate.

Among social insurance premiums, the item with the highest growth rate was employment insurance premiums.

Employment insurance premiums rose 44.8% from 29,229 won in 2016 to 29,229 won in 2016.

This is because the rate has been increased due to the expansion of the unemployment benefit payment standard (maximum period from 240 to 270 days, average wage from 50% to 60%), the Hankyung Institute analyzed.

Health insurance premiums also increased by 36.8% from 101,261 won to 138,536 won during the same period.

The Korea Economic Daily pointed out that the real wage for workers is declining further as the tax burden increases and inflation increases.

As a result of analyzing the price index of food and non-alcoholic beverages, which is called the table price for the past five years, Korea’s increase rate was 17.6%, ranking 8th out of 37 countries in the Organization for Economic Cooperation and Development (OECD).

In particular, the rate of increase last year was 5.9%, jumping to fifth place in the OECD.

The sharp rise in house prices is also expected to act as a burden for homeless workers.

As a result of analysis of data from the Korea Real Estate Agency by Hankyung-yeon, the median sale price of apartments nationwide rose 41.7% from 260 million won in 2016 to 370 million won in 2021.

During the same period, the Jeonset price rose 29.4% from 190 million won to 250 million won.

Moreover, house prices in Seoul rose more steeply, with sales prices rising 77.8% and Jeonse prices by 43.1%, respectively, compared to 2016.

The time it takes for workers to save money and buy a house without spending a single penny increased by 9.2 years from 11.8 years in 2016 to 21.0 years last year.

The period of searching for a jeonse house also increased by 3.5 years from 8.1 years to 11.6 years.

“Excessive labor income tax and social insurance burden reduce workers’ disposable income and reduce their spending power,” said the Korea Economic Daily. We need to rationalize the insurance spending structure,” he stressed.

(Photo = Yonhap News)


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