South Korea Personal Income Tax Guide 2026

Overview — National Tax Service (NTS / 국세청)

The National Tax Service (NTS, 국세청) administers all national taxes in South Korea. Every resident is assigned a residency registration number (주민등록번호) which functions as a tax identifier. Korea operates a comprehensive self-assessment system for the self-employed, while salaried employees use the year-end settlement system. The tax year runs from 1 January to 31 December, with the final return (확정신고) due by 31 May of the following year for self-employed individuals. Salaried employees typically complete year-end settlement (연말정산) in January–February.

Global income (worldwide income) of Korean tax residents is subject to IIT. Non-residents are taxed only on Korean-source income.

Individual Income Tax Brackets (2026)

The IIT uses a progressive rate structure with eight brackets. Rates apply to taxable income (과세표준) after deductions:

• Up to KRW 14 million: 6%
• KRW 14M to 50M: 15% (minus KRW 1.26M)
• KRW 50M to 88M: 24% (minus KRW 5.76M)
• KRW 88M to 150M: 35% (minus KRW 15.44M)
• KRW 150M to 300M: 38% (minus KRW 19.94M)
• KRW 300M to 500M: 40% (minus KRW 25.94M)
• KRW 500M to 1B: 42% (minus KRW 35.94M)
• Above KRW 1 billion: 45% (minus KRW 65.94M)

A resident surtax (주민세) of 10% of the IIT liability applies, making the effective top marginal rate approximately 49.5%.

Standard Deduction and Allowances (기본공제)

Every resident receives a basic deduction of KRW 1.5 million per person. Additional deductions apply for dependents (spouse, children under 20, elderly parents aged 60+). Each dependent qualifies for a KRW 1.5 million deduction. Additional allowances include:

• Spouse deduction: KRW 1.5 million if the spouse has no income above KRW 1 million
• Child deduction: KRW 1.5 million per child; KRW 2.5 million for each child after the first
• Senior deduction: KRW 1.5 million per parent aged 60+ (limited to one parent per taxpayer usually, but may extend to both if conditions met)
• Disabled deduction: KRW 2 million per disabled dependent

Employment Income Deduction (근로소득공제)

Salaried employees automatically receive an employment income deduction that increases with income but is capped:

• Up to KRW 5M: 70% of gross salary
• KRW 5M to 15M: KRW 3.5M + 40% of excess over KRW 5M
• KRW 15M to 45M: KRW 7.5M + 15% of excess over KRW 15M
• KRW 45M to 100M: KRW 12M + 5% of excess over KRW 45M
• Above KRW 100M: KRW 14.75M + 2% of excess over KRW 100M (capped at KRW 20M total)

After this deduction, the remaining amount is the taxable income (과세표준).

Tax Credits (세액공제)

Employment income tax credit (근로소득세액공제): Reduces the calculated tax liability for low-to-middle-income earners. The credit is 55% of the calculated tax for tax amounts up to KRW 130,000, and 30% of the excess above KRW 130,000 (with a cap of KRW 740,000).

Pension savings credit (연금계좌세액공제): Contributions to pension savings accounts (연금저축) are credited at 12% (up to KRW 4M) for incomes below KRW 55M, and 15% (up to KRW 3M) for higher earners. An additional KRW 3M limit applies for retirement pension account contributions.

Insurance premium credit (보험료세액공제): 12% of qualifying health, life, and accident insurance premiums, up to KRW 1M.

Medical expense credit (의료비세액공제): 15% of medical expenses exceeding 3% of gross income (max credit KRW 7M). No ceiling for serious illness expenses.

Education expense credit (교육비세액공제): 15% of qualifying education expenses for dependents (tuition, textbooks, etc.) up to limits per child.

Credit/debit card credit (신용카드소득공제): A deduction (not a credit) for card spending exceeding 25% of gross salary. The deduction rate ranges from 15–80% depending on the card type and where spending occurs (traditional market, public transport, etc.), capped at KRW 3M (KRW 4.5M for those who also use traditional market spending).

Year-End Settlement (연말정산)

The year-end settlement is a reconciliation process conducted by employers in January–February each year. Employers calculate the annual tax liability based on the employee's salary and deductions, compare it to tax already withheld monthly (원천징수), and either collect the balance or refund any excess. Employees submit supporting documents (증빙서류) showing insurance premiums, medical expenses, education expenses, pension contributions, and card spending. The employer submits the final settlement to the NTS.

Key deadlines: Employees must submit deduction documents by end of January. Employers finalise and submit to NTS by end of February (or March for some).

Global Income Reporting (종합소득세)

Self-employed individuals and those with non-salary income (rental income, business income, etc.) must file a comprehensive income tax return (종합소득세) by 31 May of the following year. The global income includes all income categories: business income, rental income, employment income, pension income, and other income. The same progressive IIT brackets apply to the total taxable income.

FAQs

How does the resident surtax (주민세) work?

The resident surtax is 10% of the IIT amount. For example, if your IIT is KRW 10 million, you pay an additional KRW 1 million as resident surtax, bringing total to KRW 11 million.

What is the difference between year-end settlement and global income tax return?

Year-end settlement (연말정산) is for salaried employees only and is handled by the employer. Global income tax return (종합소득세 확정신고) is for self-employed individuals or those with mixed income sources.

Are foreign taxes paid creditable?

Yes, Korea provides a foreign tax credit (외국납부세액공제) for income taxes paid abroad on foreign-source income. The credit is limited to the Korean tax attributable to the foreign income.

Can married couples file jointly?

Korea does not have joint filing. Each individual files separately. However, certain deductions (e.g., for dependents) can be claimed by either spouse.

Disclaimer

This guide provides general information about South Korean personal income tax for the 2026 tax year. Tax laws and rates may change. The information is based on published NTS data and may not reflect individual circumstances. Always consult with a qualified Korean tax advisor (세무사) or the NTS directly for advice specific to your situation. InvestmentKit does not provide tax advice.