Business Owners No Longer Required to Report Total Compensation for Year-End Health Insurance Settlement

NTS to Provide Simplified Payroll Statements for Regular Employees to NHIS
NHIS to Use NTS Data for Year-End Settlement of Health Insurance Premiums

Starting this year, businesses employing at least one regular worker are no longer required to report their total annual compensation to the National Health Insurance Service (NHIS) for the year-end settlement of health insurance premiums.

The National Tax Service (NTS) announced on January 23 that, beginning in February, it will directly provide simplified payroll statements for regular employees to the NHIS, thereby making it easier for business owners to fulfill their reporting obligations related to the year-end settlement of health insurance premiums.

The year-end settlement of health insurance premiums is a system in which the insurance premiums, initially assessed based on the estimated total compensation from the previous year, are recalculated using the actual total compensation received, and any difference is either additionally charged or refunded.

An NTS official explained, "Until now, business owners had to submit payroll information for regular employees to the NTS on a semi-annual basis, and separately report the previous year's total compensation to the NHIS by March 10 each year. This created the inconvenience of duplicate reporting, which this change aims to resolve."

To address this issue, the Enforcement Decree of the National Health Insurance Act has been revised, enabling the NHIS to use data received from the NTS for the year-end settlement of health insurance premiums. This revision establishes the legal basis for the NTS to provide simplified payroll statements to the NHIS. Based on this, on January 16, the NTS and NHIS signed a memorandum of understanding regarding the real-time sharing of income data.

Accordingly, the NTS will provide the NHIS with simplified payroll statements for earned income starting from 2024, and 2.01 million businesses will no longer be required to report their total annual compensation for the year-end settlement of health insurance premiums starting this year.

However, if a business owner does not submit a simplified payroll statement for earned income to the NTS, or if there are omissions or errors in the information provided, as well as in cases involving businesses employing government officials or private school teachers, the total compensation must still be reported as before.

An NTS official stated, "Through this memorandum of understanding, the NTS will enhance mutual cooperation to improve public convenience and advance the social insurance system. Going forward, the NTS will continue to expand the use of real-time income data to provide more convenient and improved services for the public."