Tax in Korea is more straightforward than many newcomers fear — for most employees it is handled automatically — but understanding it helps you avoid surprises, claim refunds you are entitled to, and keep the clean tax record you will need for visa renewals and permanent residency.
Who pays tax in Korea
If you earn income in Korea, you are generally subject to Korean income tax. How much depends on whether you are treated as a resident for tax purposes (most people who live and work here are) and on your income level. Korea uses a progressive system: higher income is taxed at higher rates.
How employees pay
If you work for an employer, you usually do not file monthly — your employer withholds income tax and other contributions from your salary automatically and pays them on your behalf. Your payslip will show deductions for:
- Income tax and local income tax
- National Pension
- National Health Insurance
- Employment Insurance
The year-end tax settlement (yeonmaljeongsan)
This is the part that matters most to your pocket. Each year, usually in January and February, employees go through the year-end settlement, where the tax withheld over the year is reconciled against your actual liability after deductions and credits.
- If too much was withheld, you receive a refund (often paid with your February or March salary)
- If too little was withheld, you pay the difference
Your employer or their accountant runs the process, but you provide the documents that unlock deductions.
Deductions and credits worth claiming
You can reduce your taxable income with things like:
- Credit and debit card spending above a threshold (a major reason to pay with your registered Korean card rather than cash)
- Cash receipts (hyeongeum yeongsujeung) registered to your phone number
- Rent paid (for eligible taxpayers)
- Medical and education expenses
- Pension and insurance contributions
- Dependants, if you support family
The National Tax Service offers a simplified service that pulls much of this data automatically once your card and phone are registered.
Freelancers, side income and business
If you earn income that is not through a single employer — freelance work, a business, or multiple sources — you may need to file a May global income tax return yourself. Keep records of income and expenses throughout the year.
Why a clean tax record matters
Consistent, properly paid taxes are checked when you apply to extend your visa, switch to F-2, or apply for F-5 permanent residency. Unpaid or irregular tax is a common reason for refusal. Treat your tax record as part of your immigration file.
Getting help
- The National Tax Service (NTS) runs an English helpline on 1588-0560
- Larger employers have payroll staff who can answer settlement questions
- For complex situations, a licensed tax accountant (semusa) is worth the fee
For most employees, tax runs itself — but the year-end settlement is where you reclaim money. Pay with your registered Korean card, register for cash receipts, hand in your deduction documents on time, and keep every statement for your future F-5 application.