Chapter Key Takeaways
| Tax Bracket Range | 8 tiers: 6% (under 14M KRW) up to 45% (over 1 billion KRW) |
|---|---|
| Local Income Tax | Additional 10% surtax on national income tax (effective rate 6.6% to 49.5%) |
| Basic Personal Deduction | 1,500,000 KRW per person (taxpayer, spouse, qualifying dependents) |
| Spouse & Dependent Income Limit | Annual total income amount ≤ 1,000,000 KRW (or gross wage ≤ 5,000,000 KRW) |
| Dependent Age Criteria | Direct ascendants (parents) age 60+, direct descendants (children) age 20 or under |
| Foreign Tax Credit | Direct tax credit or expense deduction for income taxes paid to foreign governments |
| Standard Tax Credit | 70,000 KRW for general business operators / 120,000 KRW for employees without itemized deductions |
1. 2026 Korean Progressive Income Tax Rate Table
For the 2025 tax year (reported in May 2026), Korea applies an 8-bracket progressive tax structure under Article 55 of the Income Tax Act:
| Tax Base (과세표준) | Tax Rate (세율) | Quick Deduction (누진공제액) | Effective Rate (incl. 10% Local Tax) |
|---|---|---|---|
| Up to 14,000,000 KRW | 6% | - | 6.6% |
| 14,000,000 ~ 50,000,000 KRW | 15% | 1,260,000 KRW | 16.5% |
| 50,000,000 ~ 88,000,000 KRW | 24% | 5,760,000 KRW | 26.4% |
| 88,000,000 ~ 150,000,000 KRW | 35% | 15,440,000 KRW | 38.5% |
| 150,000,000 ~ 300,000,000 KRW | 38% | 19,940,000 KRW | 41.8% |
| 300,000,000 ~ 500,000,000 KRW | 40% | 25,940,000 KRW | 44.0% |
| 500,000,000 ~ 1,000,000,000 KRW | 42% | 35,940,000 KRW | 46.2% |
| Over 1,000,000,000 KRW | 45% | 65,940,000 KRW | 49.5% |
Calculated Tax (산출세액) = (Tax Base × Tax Rate) - Quick DeductionExample: If your Tax Base is 40,000,000 KRW (15% tier):
(40,000,000 × 15%) - 1,260,000 = 4,740,000 KRW national tax (+ 474,000 KRW local tax).
2. Personal Deductions for Foreign Tax Residents
Foreign tax residents are entitled to deduct personal allowances from their gross income:
- Basic Deduction (기본공제): 1,500,000 KRW per year for the taxpayer themselves.
- Spouse Deduction (배우자공제): 1,500,000 KRW if your legal spouse's annual income amount is 1,000,000 KRW or less (or total employment salary ≤ 5,000,000 KRW). Foreign spouses living abroad can qualify if proof of marriage is verified.
- Dependent Deduction (부양가족공제): 1,500,000 KRW per qualifying dependent living in the same household:
• Direct descendants (children/grandchildren): Age 20 or younger.
• Direct ascendants (parents/grandparents): Age 60 or older. - Additional Deductions: Senior citizen aged 70+ (1,000,000 KRW extra), Disabled individual (2,000,000 KRW extra), Female head of household (500,000 KRW), Single parent (1,000,000 KRW).
3. Foreign Tax Credits (외국납부세액공제)
To eliminate international double taxation, Article 57 of the Income Tax Act allows foreign residents who paid taxes to an overseas government on foreign-source income included in their Korean tax base to claim a Foreign Tax Credit.
Taxpayers can elect either:
1. Direct Tax Credit: Deduct the foreign income tax paid directly from their calculated Korean tax liability (up to the statutory limit: Calculated Tax × [Foreign Source Income ÷ Total Tax Base]).
2. Necessary Expense Deduction: Include the foreign taxes paid as necessary business expenses in calculating taxable income.
Frequently Asked Questions
Official NTS Foreigner Tax Guide Series
Explore all 6 chapters compiled from the 2026 National Tax Service Individual Income Tax Guide for Foreigners:
Need English Filing Support? Meet 103Tax
Lead tax accountant Kwon Ji-hyun and our bilingual tax specialists provide one-on-one English tax consultation, deduction screening, and direct electronic filing on Hometax. Whether you are an expat engineer, an E-2 instructor, or a freelance contractor under 3.3% withholding, we ensure full statutory compliance and maximize your legal tax refund.