South Korea will introduce several important changes to its national pension system starting in 2026. These updates will affect employees, companies, and self-employed workers across the country. The goal is to strengthen long-term retirement security as the population ages and more people rely on public pensions for future income.

Pension Premiums Will Gradually Increase

One of the biggest changes is the rise in pension contribution rates. Today, the national pension premium is 9 percent of a worker’s standard monthly income. Starting in January 2026, this rate will begin to increase step by step.

Instead of jumping straight to a higher rate, the government will raise the premium by 0.5 percentage points each year. The rate will move from 9 percent to 9.5 percent in 2026 and continue rising annually until it reaches 13 percent in 2033.

This slow increase is designed to make the transition easier for everyone.

Different Impact on Employees and the Self-Employed

The effect of the increase depends on whether a person works for a company or works on their own.

For employees, the cost is shared. Employers pay half of the premium and employees pay the other half. For example, if someone earns three million Korean won per month, their personal increase in 2026 would be about 7,500 won.

Self-employed people, freelancers, and independent workers pay the full amount on their own. With the same income example, they would pay about 15,000 won more per month in 2026. As the rate rises each year, the difference becomes larger.

This is why many self-employed workers are feeling more pressure from the upcoming change.

Pension Benefits Will Also Increase

Along with higher contributions, pension benefits will improve. The income replacement rate — which shows how much of a person’s average lifetime income is paid back as a pension — will rise from 40 percent to 43 percent starting next year.

This means that people who pay into the system for many years will receive slightly higher pension payments in the future.

Additional Updates to Support Different Life Situations

The reform introduces several other changes that will help shape how the pension is calculated and who receives additional support. These include:

1. Expanded credits for childbirth and military service
2. Adjustments to the income reduction rules for people who work while receiving a pension
3. Higher tax benefits for long-term retirement pension recipients
4. New rules to prevent double taxation for people with foreign pension accounts
5. Changes to how basic pension benefits are shared between spouses
6. Planned improvements to the national housing pension program

These updates aim to make the system fairer and better adapted to today’s workforce and family structures.

Looking Ahead

South Korea’s 2026 pension reform marks one of the most significant updates to the system in years. While people will pay more in contributions, they will also gain stronger retirement protection and improved benefits. Understanding these changes now can help workers, companies, and global professionals prepare for what is coming.