Korea Foreigner Income Tax Special Tax Treatment §18-2 · Apr 2026
Korea lets foreign workers choose a 19% flat tax instead of the 6-45% progressive scheme. We pick whichever is cheaper for you.
How it works
- Flat 19% (Special Tax Treatment Art. 18-2): 19% of taxable income, no deductions. + 1.9% local income tax = 20.9% total. Available for first 20 years from initial Korean employment.
- Progressive (default): 6%-45% in 8 brackets. After standard deductions:
- Earned-income deduction (sliding, max ₩14.75M+)
- Personal deduction (₩1.5M × dependents)
- Earned-income tax credit (capped ₩500k-740k)
- Local tax: 10% of national income tax — same in both cases.
- Resident vs non-resident: non-residents typically forced into 19% flat (no progressive option). Residents can choose.
⚠ Simplified: ignores child tax credits, medical/insurance/pension deductions, special foreign-employee deductions, etc. Always confirm with NTS hometax (hometax.go.kr) or your employer's tax agent.
📌 Official Sources · References
- Korea National Law Information Center — Restriction of Special Taxation Act Article 18-2 (Foreign Worker Flat-Rate Tax) · Legal basis for 19% flat tax election (20 years from initial Korean employment)
- Korea National Law Information Center — Income Tax Act · Progressive tax rates (6-45%), earned-income deduction, personal exemptions, and 8-bracket schedule
- National Tax Service (NTS) — Foreigner Tax Guide · Year-end settlement procedures + bilateral tax treaty benefits + flat-tax election (☎ 126)
- NTS Hometax — Year-End Settlement & Tax Treaty · Official channel for year-end settlement filing and tax treaty applications
- Ministry of Economy and Finance (MOEF) — Tax Treaty List · Korea's bilateral tax treaty list (US, Canada, UK, EU, etc.) for double-taxation relief
This calculator estimates Korean income tax for foreigners under the 19% flat option versus progressive (6-45%). Actual tax depends on individual deductions (dependents, medical, education, donations), bilateral tax treaties, and your employer's payroll setup. Verify with NTS Hometax (☎ 126) or a licensed tax accountant.
FAQ
What is Korea's 19% flat tax for foreigners?
Foreign workers in Korea can elect a flat 19% (plus 1.9% local tax = 20.9% total) income tax rate instead of the progressive 6-45% scheme — Special Tax Treatment Control Act §18-2. Available for the first 20 years from your initial Korean employment date. Election form ('외국인근로자에 대한 과세특례 신청서') must be submitted to your employer's payroll department; switch is permitted in either direction once per year. No deductions or credits allowed — straight 20.9% × taxable income. Effective from the year you submit, applied automatically to monthly withholding.
When does the flat 19% beat progressive?
Typically once annual taxable income exceeds roughly ~₩130-150M (varies with dependents). Below that range, progressive (with personal/family deductions, medical, donations) is usually cheaper. Above ~₩300M annual, flat 19% is nearly always cheaper since you've hit the 38-45% brackets. Run both options in this calculator with your specific income to see your exact crossover point.
Resident vs non-resident — which am I?
Resident: stayed 183+ days in Korea in a calendar year, OR have your 'center of life' in Korea (family, primary home). Taxed on worldwide income (with foreign tax credits). Non-resident: under 183 days and no center-of-life ties. Taxed only on Korea-source income (your Korean salary). The flat 19% election is available to both, but most expats are residents within their first year.
Does the flat rate include local tax?
No — the headline 19% is national income tax only. Local income tax (지방소득세) of 10% of the national tax adds 1.9% on top, for a 20.9% effective rate. Both are withheld from each paycheck and reconciled in the year-end settlement (연말정산, January-February).
What about 4대보험 (social insurance)?
Foreign workers usually pay the same 4대보험 as Koreans (national pension, health, long-term care, employment insurance) — about 9.4% of monthly salary. Some bilateral pension agreements (US, Canada, Japan, Australia, Germany, etc.) allow you to opt out of national pension and credit it to your home country. Verify with your embassy + your employer.