Can I expense a laptop or server purchased for academy practice in one go?
A PC or peripheral of 1,000,000 KRW or less per unit can be expensed in full immediately in the year of purchase. However, a high-spec server or workstation exceeding 1,000,000 KRW is classified as a depreciable asset and must be expensed gradually over its useful life. If you also run government-funded courses, the trainee's own contribution and the government subsidy portion are often deposited through separate channels, so it is important to grasp both flows to accurately record the full training fee as revenue.
The most confusing part — revenue settlement for government-funded courses
The settlement structure often differs from regular tuition, so it needs separate attention
The trainee's contribution and the government subsidy are deposited separately
Government-funded courses under the National Tomorrow Learning Card and similar programs often have the trainee's own contribution and the government-subsidized training fee deposited through different channels and at different times. To accurately record the full training fee as revenue, you need to track both flows in your books, or nothing will be omitted.
Treatment can differ depending on your operating form
Operating government-funded courses as a general registered academy is different from operating as a separately designated vocational training institution when it comes to settlement and accounting treatment. It is safer to confirm the operating form and settlement structure with a tax accountant before opening the course.
Tax structure characteristics of an IT academy
Key expense categories
Must-read for computer & IT academies
Sort practice equipment, licenses, and instructor fees by category to save on taxes
Sorting each item correctly, from government-funded course settlement to instructor fees, reduces tax-audit risk
Long-term fixed assets — PCs/servers/workstations
Practice equipment: high-spec servers, workstations
General equipment: practice PCs/monitors
Items of 1,000,000 KRW or less are expensed immediately; anything over that is classified as a depreciable asset and expensed gradually over its useful life.
Consumables — software licenses/cloud
Software licenses and cloud/LMS usage fees are expensed in full at the time of payment if they are subscription-based. Since the academy business is VAT-exempt, you cannot claim a separate input VAT credit.
Personal service costs — industry instructors
Inviting a current-industry developer or designer for a guest lecture is subject to 3.3% withholding as business income; a full-time instructor working regularly is reported as employment income.
Government-funded courses — managing dual revenue streams
Since the trainee's own contribution and the government subsidy (HRD-Net settlement) are deposited through different channels and at different times, both flows must be recorded as revenue in your books so nothing is omitted.
| Category | Examples | Tax treatment |
|---|---|---|
| Long-term fixed assets | High-spec servers, workstations | Depreciated if over 1,000,000 KRW |
| Consumables | Software licenses, cloud/LMS | Expensed in full at payment (no input VAT credit) |
| Personal services | Industry guest instructors, full-time instructors | 3.3% withholding or employment income |
| Government-funded settlement | Trainee contribution + government subsidy | Both flows recognized as revenue, recorded separately by settlement timing |