If a member cancels their gym membership early, how do we correct the revenue we already reported?
You correct the revenue by deducting the refunded amount from what you already reported, and you should keep the refund records and supporting documentation together. Since fitness facility businesses are subject to VAT, even if a one-year membership is paid in a single lump sum, VAT is reported in full at the time of payment, while comprehensive income tax revenue must be prorated over the actual usage period — both points are worth keeping in mind.
The Trickiest Part — Membership Revenue Recognition and Trainer Contracts
VAT and income tax recognize revenue at different times, and determining the trainer's contract type is critical
VAT at the Time of Payment, Income Tax Prorated Over the Usage Period
If a one-year membership is paid in a single lump sum, VAT is reported in full at the time of payment, but comprehensive income tax revenue must be prorated over the actual usage period. Don't confuse the fact that the two taxes recognize revenue at different times.
How a PT Trainer Files Depends on How They Actually Work
If a PT trainer independently recruits and manages their own members, a business-income (3.3%) freelance contract fits, but if their hours are fixed and they work under the center's direction, they may in substance be classified as an employee, so the contract structure needs careful design.
Income Structure Features of Gyms (Weight Training)
Key Expense Items
Must-Know for Gyms (Weight Training)
Split Exercise Equipment & Trainer Pay by Category to Save on Taxes
From weight machines to member-management apps, categorizing each item correctly is what cuts unnecessary tax
Long-Term Fixed Assets — Equipment Subject to Depreciation
Exercise equipment: weight machines, cardio equipment (treadmills, bikes)
Facility fixtures: lockers, shower facilities
Once a per-unit purchase exceeds KRW 1 million, it's classified as a depreciable asset and must be expensed over its useful life.
Consumables — Immediate Expense
Laundering costs for rental workout attire, towels, and hygiene supplies are expensed in full at the time of purchase.
Personal-Service Costs — PT Trainer Pay
PT trainers are filed as business income (3.3% withholding) or employment income depending on how they actually work.
Member-Management App & Booking System Fees
Member-management app and booking-system fees are a recurring monthly cost, expensed in full at the time they're incurred.
| Category | Typical Examples | Tax Treatment |
|---|---|---|
| Long-term fixed assets | Weight machines, cardio equipment, lockers | Depreciated once over KRW 1M |
| Consumables | Attire laundering, towels, hygiene supplies | Fully expensed immediately at purchase |
| Personal service | PT trainer pay | 3.3% withholding or employment income |
| Member management system | Member-management app, booking-system fees | Expensed immediately |