Korea tax guide
Korea Income Tax Rates and Brackets for Foreigners
Income Tax
Who this guide is for
- Foreign employees estimating Korean tax
- Freelancers preparing a May return
- Expats comparing progressive and flat tax
- People checking why payroll withholding differs from final tax
Quick Answer
Korea generally applies progressive national income tax rates of 6% to 45% to taxable income, not directly to gross salary. For income attributable to 2025, the published brackets begin at 6% up to KRW 14 million of taxable income and reach 45% above KRW 1 billion. Local income tax is separate, and eligible foreign workers may need to compare the ordinary calculation with the special flat-tax option.
Key points
- A marginal rate applies only to the portion inside each bracket.
- Taxable income is different from gross salary or gross receipts.
- Credits, deductions, withholding, and local income tax change the final amount.
- Employees may have monthly withholding before the final annual calculation.
- The foreign-worker flat-tax option has separate eligibility and tradeoffs.
Step-by-step explanation
Read the bracket table correctly
Korea’s progressive schedule uses marginal rates. For income attributable to 2025, the NTS table shows 6% up to KRW 14 million, 15% from above KRW 14 million to KRW 50 million, 24% to KRW 88 million, 35% to KRW 150 million, 38% to KRW 300 million, 40% to KRW 500 million, 42% to KRW 1 billion, and 45% above KRW 1 billion.
The progressive deduction in the official table is a shortcut for calculating the same marginal result. It does not create an extra tax benefit.
Start from the tax base, not gross pay
An employee’s gross salary is adjusted under the wage-income rules and permitted deductions. A freelancer generally starts from business revenue and subtracts recognized necessary expenses before other parts of the calculation. The resulting tax base is what meets the bracket table.
Reconcile withholding and final tax
Employers and payers may withhold tax during the year. The final calculation can still change through year-end settlement or a May return. A refund means prior tax exceeded the final result; an additional payment means it was insufficient.
Compare special rules carefully
Some eligible foreign workers can choose a special flat-tax method. Because that method can replace ordinary deductions, exemptions, and credits, compare both results using the same income year and verified eligibility before choosing.
Documents you may need
- Annual salary or revenue records
- Wage and salary income withholding receipt
- Business expense records
- Deduction and tax credit evidence
- Tax residency information
- Prior year tax return or year-end settlement statement
Common mistakes
- Multiplying gross salary by the top marginal rate
- Ignoring the difference between taxable income and revenue
- Forgetting local income tax
- Treating monthly withholding as the final liability
- Choosing the flat rate without comparing lost deductions and credits
When should you ask a tax professional?
Ask a qualified tax professional if you have income from several countries, business income, unclear tax residency, treaty questions, missing documents, late filing concerns, or a visa situation that depends on tax records. This site explains general patterns only and cannot review your personal facts.
FAQ
What is the highest Korean individual income tax rate?
The published national progressive schedule for 2025-attributable global income reaches 45% above KRW 1 billion of taxable income. Local income tax is separate.
Does a 35% bracket mean all my income is taxed at 35%?
No. Korea uses marginal brackets, so each portion of taxable income is taxed at the rate for that bracket.
Are the brackets applied to gross salary?
Generally no. The rate schedule is applied after the relevant income calculation and permitted deductions produce the tax base.
Is payroll withholding my final tax?
Not always. Year-end settlement or a separate return can reconcile tax after income, deductions, credits, and prior withholding are considered.
Official Sources to Verify
Tax rules and filing procedures in Korea may change depending on your visa status, income type, tax residency, and the tax year. Before making a tax decision, always verify your situation with official sources or a qualified professional.