Foreigner income tax calculator
Foreign employees in Korea may elect a single 19% rate on gross income instead of the progressive rates — but the election bars every deduction and credit. This calculates both, side by side, and tells you which one leaves you with more.
An estimate, not a tax return. This models the two headline methods with the standard deductions. It does not model non-taxable allowances, foreign tax credits, stock compensation, or the itemised deductions in a real year-end settlement. Confirm with the National Tax Service or a licensed tax accountant (세무사) before filing.
Why the flat rate is usually the worse deal
Nineteen per cent sounds low next to a top progressive rate of 45%, and that comparison is what makes the election so appealing. It is also the wrong comparison. Progressive rates apply to your taxable base, not your salary — and by the time the employment income deduction, personal allowances, social insurance contributions and the earned income tax credit have done their work, the base is a good deal smaller than the gross figure on your contract.
The flat rate applies to the gross figure with nothing subtracted. Not the employment income deduction, not your dependants, not your pension contributions, not your credit-card spending. The statute is explicit: elect the flat rate and you forgo every deduction, exemption, reduction and tax credit for that year.
So the real question is not 19% against 45%. It is 20.9% of everything against a progressive schedule applied to perhaps 60–75% of your salary. On an ordinary Korean salary the second one wins comfortably, and it keeps winning far longer than most people assume — for a single filer with no unusual deductions the crossover sits at roughly ₩160 million of gross annual salary. The calculator above finds the exact point for your situation, because dependants and deductions move it.
Where the flat election does win
- High gross salaries. The employment income deduction is capped, so its value stops growing while the progressive rate keeps climbing. Past the crossover the flat rate is simply cheaper.
- Few or no deductions. A single person with no dependants, no Korean property, no pension savings and low card spending gets little from the progressive system's machinery.
- Short assignments with large packages. Expatriate packages front-load cash into one or two tax years, which pushes the marginal progressive rate up sharply while the flat rate stays flat.
- Simplicity has real value to you. The flat election makes the year-end settlement close to trivial: no receipts, no dependant paperwork, no card statements.
How the calculation is built
| Step | Progressive method | Flat election |
|---|---|---|
| Starting point | Gross annual salary | Gross annual salary |
| Employment income deduction | Applied on a sliding scale, capped at ₩20 million | None |
| Personal allowances | ₩1.5 million for you and each dependant | None |
| Social insurance | Deductible | Not deductible |
| Rate | 6% to 45% across eight brackets | 19% flat |
| Earned income tax credit | Applied, tapering with income | None |
| Local income tax | 10% of income tax | 10% of income tax |
Social insurance itself is withheld identically under both methods — it is a contribution, not a tax — so the calculator reports it separately and subtracts it from both take-home figures.
Common questions
How do I actually elect the flat rate?
Through your employer's year-end settlement in February, or on your own final return in May. You submit the application for the flat tax rate for foreign workers alongside the settlement paperwork. It is a per-year choice: electing it one year does not bind you the next, and not electing it does not forfeit it.
How long can I use it?
Tax periods ending within twenty years of the first day you provided work in Korea. The window is generous enough that most people will never hit the limit, but it is tied to your original start date rather than to your current employer or visa.
There is a second condition people miss: under the current provision your work in Korea must have started on or before 31 December 2026. That sunset has been extended repeatedly, but if you are arriving after it, confirm with the NTS whether it was extended again.
Do I still pay national pension and health insurance?
Yes. Social insurance is separate from income tax and the election has no effect on it. Health insurance is compulsory for foreign residents. National pension depends on whether your country has a reciprocity or social security agreement with Korea — some nationalities are exempt, and some can reclaim a lump sum when they leave.
What about income from outside Korea?
That depends on whether you are a Korean tax resident, which generally turns on having an address or a place of abode in Korea for 183 days or more in a tax year. Residents are taxed on worldwide income; non-residents only on Korean-source income. The flat election covers Korean-source employment income — foreign income is a separate question and a good reason to speak to a 세무사.
Why does the local income tax appear twice?
It does not — it is charged once, as 10% of your income tax, under both methods. It goes to your local authority rather than the national government, which is why it is reported as its own line rather than folded into the rate. An effective flat rate of 20.9% is 19% plus that surtax.
Not tax advice
This calculator provides general information about how Korean income tax is structured. It is not tax advice, and the figures are estimates that ignore many items a real return includes. Rates and thresholds are reviewed annually and can change.
Verify before filing:
- National Tax Service — English
- Hometax, where the return is actually filed
- The NTS English helpline on 1588-0560, or a licensed tax accountant (세무사)