Many people probably pay national pension every month. I think there are many people who do not know how the national pension payment amount is set. In this article, we will learn more about the standard monthly income, which is the standard for calculating national pension premiums.
Definition of standard monthly income
The standard for calculating the national pension premium we pay every month is the standard monthly income. In other words, in order to calculate the national pension premium, the amount less than 1,000 won is calculated as the standard monthly income from the monthly income reported by the subscriber. If this is multiplied by the national pension insurance rate of 9%, it is the national pension premium we pay.
Standard monthly income = Total income / Total number of working days * 30 days
National pension insurance premium = standard monthly income * insurance premium rate (9%)
For workplace subscribers, the division and employees each bear 4.5%.
How to calculate standard monthly income
In order to determine the standard monthly income, you must report your total income to the National Pension Service. Total income refers to the total income received from the workplace by subscribers who worked for more than one month in the previous year from January 1 to December 31 of the previous year. In the case of a person who joined the current workplace in the middle, the total income is the sum of all income received during the period of employment at the current workplace. In other words, if you report the total income of the previous year to the Corporation in May, the standard monthly income amount is determined in June, and the standard monthly income amount is applied for one year from July 1 of the relevant year to June of the following year.
May: Guide to reporting total income/Sending total income report + Reporting total income (workplace)
June: Determination of standard monthly income
July: Apply insurance premiums based on the new standard monthly income amount (from July of this year to June of next year)
The income categories that must be included when determining the standard monthly income amount are as follows. If you convert the total income for one year of the income included below into 30 days, it becomes the standard monthly income.
Category Income that must be included Income that does not include
Judgment criteria All taxable income to be paid in the employment contract, etc. at the time of employment, non-taxable income under the Income Tax Act, income for which payment and payment amount are not confirmed at the time of employment
Salary items Non-taxable income such as basic salary, position allowance, rank assistant allowance, regular (permanent) bonus, basic performance bonus, vacation allowance, transportation allowance, fixed overtime allowance, welfare pension, and other various allowances (meal allowance under 100,000 won, childcare allowance for children under 6 years old per month) (within 100,000 won, etc.), performance bonuses whose payment and amount are not determined based on performance, etc.
Standard monthly income upper and lower limit range
Nevertheless, there is an upper and lower limit to the standard monthly income amount. The total income earned is so high that, for example, if there is a person whose monthly income is 10 million won, you only have to pay an amount equivalent to 9% of the upper limit of the standard monthly income of 5.9 million won, not 9% of 10 million won. This year’s national pension payment range will be up to 5.9 million won (upper limit) * 9% = 531,000 won to 370,000 won (lower limit) * 9% = 33,300 won.
Application period 2021.7.1 ~ 2022.6.30 2022.7.1 ~ 2023.6.30 2023.7.1 ~ 2024.6.30
Upper limit 5.24 million won 5.53 million won 5.9 million won
Lower limit 330,000 won 350,000 won 370,000 won