8 tax brackets from 6% to 45%
South Korea's headline 6-45% rates mask a 10% local surtax—the true top rate is 49.5%. The expat trap: foreigners can choose a flat 20.9% rate for 20 years (beneficial above ₩130 million), but you lose all deductions. A ₩60 million ($43,000 USD) salary pays roughly ₩8.5 million in income tax. Under 5 years in Korea? Only Korean-source income is taxed.
South Korea's income tax runs from 6% to 45% across 8 brackets, but the hidden 10% local income tax surtax pushes the true top rate to 49.5% for income above ₩1 billion (~$715,000 USD). Foreigners get a powerful option: a flat 19% + 1.9% local = 20.9% total for up to 20 years, with no deductions but massive savings for high earners above ₩130 million. The 5-year rule protects expats: if you've been in Korea less than 5 years in any 10-year period, only Korean-source income is taxed. Social security adds ~13%: National Pension 4.75% + Health Insurance 4.07%.
| Taxable Income | Tax Rate |
|---|---|
| ₩0 - ₩14,000,000 | 6% |
| ₩14,000,000 - ₩50,000,000 | 15% |
| ₩50,000,000 - ₩88,000,000 | 24% |
| ₩88,000,000 - ₩150,000,000 | 35% |
| ₩150,000,000 - ₩300,000,000 | 38% |
| ₩300,000,000 - ₩500,000,000 | 40% |
| ₩500,000,000 - ₩1,000,000,000 | 42% |
| Over ₩1,000,000,000 | 45% |
Note: These are marginal rates - you only pay the higher rate on income within each bracket.
Source: National Tax Service
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Get Paid as a Contractor →South Korea uses 8 progressive brackets from 6% to 45%, plus a mandatory 10% local income tax surtax. This means the effective rates are 6.6% to 49.5%. The 45% top rate (49.5% with local tax) applies to income over ₩1 billion (~$715,000 USD). Most employees in the ₩50-88 million range pay 24% + 2.4% = 26.4%.
Foreign workers starting employment in Korea by December 31, 2026 can elect a flat 19% national rate (20.9% with local tax) instead of progressive rates for up to 20 years. You must apply to the National Tax Service or your employer. The catch: you lose all deductions and credits. It's typically beneficial for foreigners earning above ₩130-150 million annually.
Annual tax returns are due May 31 following the tax year. However, most employees don't file separately—employers perform year-end tax settlement (연말정산) in February, adjusting for credits and deductions. Self-employed individuals and those with multiple income sources must file the May return.
Expats benefit from the 5-year rule: if you've spent less than 5 years in Korea within any 10-year period, only Korean-source income is taxed. After 5 years, you're taxed on worldwide income. Foreign engineers and researchers may qualify for a 50% income tax reduction for 10 years under technology transfer agreements.
Employees pay approximately 13% in social contributions: National Pension 4.75% (capped at ₩303k/month), National Health Insurance 3.595%, Long-Term Care ~0.47%, and Employment Insurance 0.9%. The National Pension rate is increasing gradually to 6.5% by 2033 as part of pension reform.
Yes, US citizens working in South Korea pay Korean income tax unless exempt under SOFA (Status of Forces Agreement) for US military personnel and certain civilian employees. The US-Korea tax treaty prevents double taxation via foreign tax credits. Most American expats choose the 19% flat tax rate (20.9% with local tax) over progressive rates for significant savings above ₩130 million. You must file both Korean taxes and US taxes (IRS Form 2555 for FEIE or Form 1116 for foreign tax credits). US military under SOFA pay only US taxes, not Korean taxes.
Last Updated: March 2026