South Korea will reduce the health insurance premium deduction for employees with non-salary income from 20 million won to 10 million won [1].

This policy change targets high-income earners and those with supplementary revenue to ensure the long-term financial stability of the national health insurance system. By lowering the threshold, the government aims to increase the contribution burden on those with significant assets outside their primary employment.

The Ministry of Health and Welfare and the Health Insurance Policy Review Committee said the plan following a subcommittee meeting held July 23, 2026 [1, 3]. The adjustment specifically affects workplace subscribers who earn additional income through interest, dividends, or property rentals [1].

Under the previous system, the first 20 million won of such additional income was exempt from premium calculations [1]. The new rule will cut that exemption in half, meaning premiums will now be calculated on any non-salary income exceeding 10 million won [1].

Government estimates indicate that approximately 1.78 million workplace subscribers will be impacted by this change [2]. The move is part of a broader effort to secure the fiscal health of the insurance fund by expanding the tax base to include a larger portion of secondary earnings [1].

Officials said the updated measures to the health and medical community on July 27, 2026 [1]. The transition is designed to create a more equitable distribution of the financial burden across the insured population, particularly by targeting those with diverse income streams, such as real estate investments, who previously benefited from higher deductions [1].

“The deduction for non-salary income will be reduced from 20 million won to 10 million won.”

This policy shift reflects South Korea's struggle to maintain the solvency of its universal healthcare system amid an aging population and rising medical costs. By tightening the deductions for 'side income,' the state is shifting more of the financial responsibility onto the professional class and property owners, signaling a move toward a more aggressive pursuit of fiscal sustainability over taxpayer incentives for investment.