Financial Income and Health Insurance Premiums: Criteria for Employee Subscribers, Local Subscribers, and Dependents

An increase in interest and dividends does not mean that everyone’s health insurance premiums rise in the same way. Employee-insured persons, self-employed insured persons, and dependents are subject to different standards, and even the same ETF returns may produce different results depending on how the gains are classified under tax law.

The following explains the system structure as verified in July 2026. Health insurance premium rates, detailed calculation formulas, tax laws, and dependent eligibility standards may be revised, so before making any actual transaction, retirement, or gift, you should confirm the latest applicable outcome with the National Health Insurance Service and a tax professional.

Three Types of Eligibility to Distinguish First

Income for health insurance premium purposes generally includes interest, dividends, business income, employment income, pension income, and other income. However, because the applicable inclusion rates by income type and the treatment of tax-exempt and separately taxed income differ, simply adding up amounts deposited into a bank account may lead to errors.

Employee-Insured Persons: Annual Income Other Than Remuneration Threshold of 20 Million Won

Employee-insured persons pay monthly remuneration-based premiums based on their salary. In addition, if annual income other than remuneration—including interest, dividends, business income, employment income, pension income, and other income—is more than 20 million won, an additional monthly income-based premium may apply.

Basic Calculation Structure

Conceptually, the calculation proceeds as follows.

1. Identify annual income other than remuneration by income type.
2. Apply the inclusion rates prescribed by law.
3. Apply the annual deduction threshold of 20 million won.
4. Divide the remaining amount by 12 months.
5. Apply the health insurance premium rate for the applicable year.
6. Add the long-term care insurance premium based on the calculated health insurance premium.

For example, if all income other than remuneration consists of interest and dividends totaling 30 million won annually, under the general structure, the 10 million won remaining after subtracting 20 million won becomes the starting point for calculating the monthly income-based premium. The exact premium varies depending on the premium rate for the applicable year, the period to which the income is attributed, the type of income, and the results of reconciliation.

Points to Note

• Exceeding the threshold does not mean that an additional premium is charged on the entire 30 million won of income other than remuneration.
• Employment income, pension income, and other types of income may be assessed differently from interest and dividend income during the premium calculation process.
• Premiums are reflected after finalized income data from the National Tax Service is linked to the National Health Insurance Service, so there may be a gap between when income is earned and when the premium is billed.
• Rather than giving up legitimate returns simply because income is close to a threshold, compare after-tax returns after accounting for both taxes and insurance premiums.

Self-Employed Insured Persons: The 10 Million Won Annual Financial Income Threshold

For self-employed insured persons, it is important whether the combined annual interest and dividend income is more than 10 million won. If the total is at most 10 million won, that financial income may be excluded from the calculation of self-employed insurance premiums. However, if it is more than 10 million won, the entire amount of the relevant interest and dividend income—not merely the excess—is included.

Accordingly, the difference in premium calculations between 10 million won and 10.01 million won may be much larger than the actual difference in income. However, because the final premium must also account for other income and property, the minimum and maximum monthly income amounts, and long-term care insurance premiums, it may not equal the amount obtained by simply multiplying financial income by the premium rate.

Information Self-Employed Insured Persons Should Review

• Interest payment dates and maturity dates for deposits and bonds
• Dividends and distributions from domestic and foreign stocks and funds
• Taxable trading gains from domestically listed foreign-asset ETFs
• Business, employment, pension, and other income
• Property tax assessment bases and jointly owned shares

Unlike in the past, vehicle-based premiums for self-employed insured persons were abolished in February 2024. Materials that continue to describe vehicles as a separate assessment factor for self-employed insurance premiums may not reflect the latest system.

Income Classification Varies by the ETF’s Listing Market

Even when tracking the same foreign index, domestically listed ETFs and overseas-listed ETFs may have their trading gains classified differently under tax law.

Trading gains from domestically listed foreign-asset ETFs are not always treated in their entirety as dividend income. The taxable amount may be determined using factors such as the increase in the tax-base price and the actual trading gain.

Trading gains from overseas-listed ETFs are classified as capital gains, and the annual basic deduction and other rules are applied after aggregating gains and losses from foreign stocks. The general tax rate, including local income tax, must be reviewed separately. The fact that capital gains are currently excluded from health insurance premium calculations does not mean that they are tax-free.

Regardless of the account in which assets are held, cash dividends and ETF distributions are, in principle, dividend income. This is why it should not be assumed that direct overseas investment never affects health insurance premiums.

Managing Financial Income Through an ISA

An ISA is an account that aggregates gains and losses from multiple financial products held within the account, exempts up to a certain amount from tax, and then applies separate taxation to net profit exceeding that amount. Separately taxed income from an ISA is not included in the aggregate financial income subject to comprehensive taxation in the way that interest and dividends from ordinary accounts are, so an ISA may also be used to manage health insurance premiums.

Assets That May Be Prioritized for an ISA

• Products that generate interest income, such as deposits and bonds
• High-dividend stocks and REITs
• ETFs with large distributions
• Domestically listed foreign-asset ETFs whose trading gains are treated as dividend income

By contrast, domestically listed stocks or domestic equity ETFs whose trading gains are tax-exempt even in ordinary accounts may be a lower priority for ISA capacity. However, dividends, the possibility of aggregating gains and losses, the mandatory holding period, and early withdrawal conditions should also be compared.

ISA Considerations

• ISA enrollment may be restricted if you were subject to comprehensive taxation on financial income at least once during the previous 3 tax periods.
• Tax-exempt limits and contribution limits may vary depending on the account type and future legislative amendments.
• Some products are not permitted in an ISA, and stocks and ETFs listed on overseas exchanges cannot be held directly.
• Transferring ISA maturity proceeds to a pension account may provide additional tax benefits, but the transfer limit and deadline must be confirmed.

Pension Savings Accounts and IRPs Must Be Examined Separately at the Contribution and Withdrawal Stages

Interest, dividends, and trading gains generated within pension savings accounts and IRPs are not immediately taxed as ordinary financial income. Therefore, during the accumulation and investment stage, these accounts have the effect of deferring comprehensive taxation on financial income and health insurance premiums.

However, when money is withdrawn from the account, the treatment of pension income tax, other income tax, and related taxes differs depending on whether the withdrawal qualifies as a pension payment or a non-pension withdrawal. It also cannot be stated conclusively that private pensions are currently reflected in health insurance premiums in the same way as public pensions, and future linkage of income data or system reforms remains possible. It is inaccurate to describe pension accounts as accounts that will never generate health insurance premiums throughout one’s lifetime.

Voluntary Continuation Coverage for Retirees

After retirement, a person who switches to self-employed insured status has premiums calculated based on income and property. If the self-employed insurance premium would be higher, voluntary continuation coverage may be considered.

Key Requirements

• During the 18 months before retirement, the person must have maintained employee-insured status for a combined period of at least 1 year.
• The application must be submitted before 2 months have passed from the payment deadline for the first billed self-employed insurance premium.
• The coverage period is up to 36 months, provided the eligibility requirements continue to be met.
• The premium is not simply fixed at exactly the same amount as the salary immediately before retirement or the individual’s premium contribution at that time, so a simulation or consultation with the National Health Insurance Service is necessary.

The application deadline is determined based on the payment deadline for the first self-employed insurance premium, not the date the bill was received. Before applying, compare the voluntary continuation premium with the actual self-employed insurance premium, and also check whether dependent status is available.

Income and Property Standards for Dependent Eligibility

Dependent status is not granted solely because someone is a family member. Both income and property standards must be met along with the support relationship requirement.

Key Property and Income Standards

The amount used here is the property tax assessment base, not the home’s market value or officially assessed value itself. Income includes not only interest and dividends but also business, employment, pension, and other income, while separate, stricter requirements apply to business income. A person with business registration must, in principle, have no business income, and even without business registration, the annual business income threshold must be checked. Separate exceptions may apply to persons with disabilities, persons of national merit, and others.

If a person has a spouse, one spouse’s failure to meet the income requirement may also affect the other spouse’s recognition as a dependent, so reviewing each person’s figures separately is not sufficient.

Limitations of Joint Ownership and Asset Distribution

If actual ownership is divided between spouses, each person’s property tax assessment base or financial income may change. However, deciding to convert assets to joint ownership or transfer deposits based solely on health insurance premiums is risky.

• Transferring real estate ownership interests may result in gift tax, acquisition tax, and registration costs.
• Gift tax issues may arise if the source of funds does not match the actual ownership relationship.
• The effects of joint ownership on comprehensive real estate holding tax, capital gains tax, and inheritance tax vary depending on factors such as the holding period and number of homes owned.
• Nominee transactions that merely divide ownership in name while the beneficial owner is someone else do not constitute lawful tax planning.
• Because dependent eligibility is determined by considering income, property, business income, and support requirements together, dividing property alone does not necessarily preserve eligibility.

Accordingly, asset transfers should be decided only after jointly calculating the reduction in health insurance premiums, transfer costs, taxes, and the future effects on dispositions and inheritance.

Checklist Before Year-End and Retirement

1. Check the pre-tax amount of this year’s interest and dividends using National Tax Service records and financial institution statements.
2. Employee-insured persons should check whether their total income other than remuneration is more than 20 million won.
3. Self-employed insured persons should check whether their combined interest and dividend income is more than 10 million won.
4. Check whether trading gains from domestically listed foreign-asset ETFs are classified as dividend income.
5. Review the remaining contribution limits and eligibility requirements for ISAs and pension accounts.
6. Those planning to retire should compare the estimated self-employed insurance premium with the voluntary continuation premium.
7. Dependents should review the property tax assessment base, total income, and business income requirements together.
8. Any adjustment to maturity dates or the timing of profit realization should be made within the scope of ordinary transactions after considering product terms and market risks.

Conclusion

The key to managing health insurance premiums is not avoiding returns themselves but accurately identifying the insured-person category and income classification. Important thresholds are 20 million won in income other than remuneration for employee-insured persons and 10 million won in financial income for self-employed insured persons, while dependents must simultaneously meet the property, total income, and business income requirements.

ISAs, pension accounts, and voluntary continuation coverage are systems that may be used within the scope prescribed by law. However, direct overseas investment, joint ownership, and asset transfers among family members may involve other taxes and costs, so their advantages and disadvantages should not be judged based on health insurance premiums alone.