Income tax in Korea — the rate table, and why the 19% flat rate is usually a trap
Verified firsthand · Restriction of Special Taxation Act Article 18-2, Income Tax Act Articles 1-2, 2, 47, 55 and 137, and the National Tax Service basic rate table cross-checked on two of its pages, read on 2026-08-27
Two ideas circulate among foreign workers in Korea, and both are wrong. The first is that foreigners are taxed more heavily. The second is that the 19% flat rate for foreigners is a benefit.
Short answer
183 days or more in Korea you are a RESIDENT — same table, same deductions as Koreans
19% flat rate 19% of GROSS pay, and every exemption, deduction,
reduction and tax credit is switched off
You must APPLY for it. It is not automatic.
On a normal salary the progressive table wins by a wide margin.
You are probably a resident
Income Tax Act, Article 1-2(1)1 defines a resident as an individual with a domicile in Korea, or a place of residence for 183 days or more. Nationality plays no part.
Most foreign workers cross 183 days, which makes them residents — and residents do the year-end tax settlement the same way Koreans do, on the same rate table.
Global income basic rates
| Tax base | Rate | Progressive deduction |
|---|---|---|
| up to 14,000,000 won | 6% | — |
| 14,000,000 – 50,000,000 | 15% | 1,260,000 |
| 50,000,000 – 88,000,000 | 24% | 5,760,000 |
| 88,000,000 – 150,000,000 | 35% | 15,440,000 |
| 150,000,000 – 300,000,000 | 38% | 19,940,000 |
| 300,000,000 – 500,000,000 | 40% | 25,940,000 |
| 500,000,000 – 1,000,000,000 | 42% | 35,940,000 |
| over 1,000,000,000 | 45% | 65,940,000 |
Note that the rate applies to the tax base, not to your salary. The tax base is what is left after the earned-income deduction and your personal deductions.
The 19% flat rate — read the second paragraph
Restriction of Special Taxation Act, Article 18-2(2):
Where a foreign executive or employee (excluding daily workers) begins to provide labour in Korea for the first time on or before 31 December 2026, the income tax on earned income received until the tax year ending within 20 years from the first day of work may be the amount obtained by multiplying that earned income by 19 percent, notwithstanding Article 55(1) of the Income Tax Act.
Attractive on its own. Then:
Paragraph 3:
Where paragraph (2) applies, the provisions on non-taxation, deductions, reductions and tax credits shall not apply (with a narrow exception for certain welfare-type benefits), and that earned income shall not be aggregated into the global income tax base.
Why it costs low and mid earners money
The two methods multiply different things.
| 19% flat | gross pay | × 19% | ← nothing is subtracted first | |
| Progressive | gross − earned-income deduction − personal deductions = tax base tax base × 6–45% | − | tax credits | ← two subtractions, then credits |
On 30 million won a year — roughly 2.5 million a month — the deductions typically bring the tax base down to around 14 million, which lands in the 6–15% bands, and then earned-income and child tax credits come off as well.
Nineteen percent of the whole salary is not close.
The provision was designed for highly paid executives. It is not a benefit to offer an E-9 or H-2 worker, or most office staff.
Three practical points
| Proviso to (2) | excluded where you work for a specially related company, other than a foreign-invested company prescribed by Presidential Decree |
| Paragraph (4) | the withholding agent may withhold 19% from each month's pay |
| Paragraph (5) | you must APPLY — it does not happen by itself |
The exact scope of "specially related company" and "foreign-invested company", and the application form and deadline, sit in the Enforcement Decree, which we have not read. Ask the National Tax Service on 1330.
The year-end settlement
Income Tax Act, Article 137(1) — the withholding agent settles when paying February's salary of the following year, or, if you leave mid-year, when paying the salary for the month you leave:
① apply global income deductions to earned income → the global income tax base
② apply the basic rates to the tax base → the calculated tax
③ subtract tax already withheld, foreign tax credit, earned-income tax credit,
child tax credit, pension account tax credit and special tax credits
Article 137(2) — where those subtractions exceed the calculated tax, the excess must be refunded to the worker. A refund is not a favour; it is money over-collected during the year being returned.
Article 137(3) — where the worker does not file the report under Article 140, the withholding agent still applies paragraph 1. In plain terms: no documents, no deductions, smaller refund.
Leaving mid-year — do this before you fly
Article 137(1) requires the settlement when your final salary is paid. Once you have left the country, supplying missing documents and confirming a refund account both become hard. Finish the settlement before departure.
Why the earned-income deduction table is not printed here
The tables in Income Tax Act Articles 55 (rates) and 47 (earned-income deduction) are images on the law.go.kr page and cannot be read as text. We took the rate table from two separate National Tax Service pages that agreed. For the earned-income deduction we found no text source, so we do not reproduce it.
Two figures we could confirm as text:
| Earned-income deduction cap | 20,000,000 won | (Art. 47(1) proviso) | |
| Daily workers | 150,000 won a day | (Art. 47(2)) | |
Your withholding receipt already shows the computed figures. Work from that document.
Frequently asked questions
Is remittance home taxed? No — see sending money home from Korea. Tax is withheld when the salary is paid; sending the remainder abroad is not a second event.
I stayed under 183 days. Non-residents are taxed only on Korean-source income (Article 2(1)2), and the mechanics differ. Ask 1330 about your case.
How do I know if I overpaid? Compare the determined tax and the tax already paid on your withholding receipt. If the tax already paid is larger, the difference comes back.
Is the year-end settlement the same as the May filing? If salary is your only income, the settlement finishes it. Other income means a separate May filing.
Sources
Restriction of Special Taxation Act (조세특례제한법)
Art. 18-2 — special taxation for foreign workers, paras 2 to 5
https://www.law.go.kr/법령/조세특례제한법
Income Tax Act (소득세법)
Art. 1-2 (resident — 183 days) · Art. 2 (tax liability)
Art. 47 (earned-income deduction) · Art. 55 (rates)
Art. 137 (year-end settlement of tax on earned income)
https://www.law.go.kr/법령/소득세법
National Tax Service basic rate table, cross-checked on two pages
https://www.nts.go.kr/nts/cm/cntnts/cntntsView.do?mi=2227&cntntsId=7667
https://www.nts.go.kr/nts/cm/cntnts/cntntsView.do?mi=6594&cntntsId=7873
National Tax Service: 1330 (foreign-language service) · hometax.go.kr
