Korea Comprehensive Income Tax 2026: Brackets, Deductions, and a Real Example
Who has to file Korea's 5월 종합소득세, how brackets from 6% to 45% actually work, and a full ₩40M worked example with deductions and credits.
My first year as a freelancer in Korea, I got hit with a comprehensive income tax bill that was almost three times what I expected. I had been saving 10% of every invoice, thinking that was plenty. It wasn't. After basic deductions, bracket math, and local income tax, the real number was closer to 18% of my total revenue — and I had already blown most of the buffer on a new laptop.
If you earn money outside a regular paycheck — freelance gigs, side business, rental income, YouTube, or even side consulting on top of a salary — you file 종합소득세 every May. This guide walks through who has to file, how the brackets work, which deductions actually move the needle, and a full worked example at ₩40M so you can see where the money goes.
What you'll learn
- ✅Who actually has to file 5월 종합소득세 (and who can skip it)
- ✅How Korea's 6%–45% brackets stack with the 누진공제 shortcut
- ✅A full ₩40M freelancer example: deductions, credits, local tax, final bill
What Is 종합소득세?
Comprehensive income tax is Korea's way of adding up all your taxable income for the year — business, freelance, rental, pension, and certain financial income — and taxing the total on a progressive scale. Salaried workers usually finish this in January through 연말정산, but the moment you have income outside a single W-2-style paycheck, you're back in the system every May.
Who Has to File?
The rule is simpler than it looks. If you have income that wasn't fully settled by your employer, you probably need to file.
- Freelancers and self-employed: any 3.3% withholding on invoices means you have business income
- Side hustlers: salary from a day job plus freelance or platform income = file
- Landlords: rental income above the exemption threshold
- High financial income: interest + dividends above ₩20M per year
- Anyone with business income — even if you lost money, filing protects your deductions
Pure salary earners with one employer don't file 종합소득세. Their tax life ends in January. Everyone else shows up in May.
2026 Tax Brackets and the 누진공제 Shortcut
Korea uses 8 progressive brackets. Instead of stacking each bracket manually, the tax office publishes a 누진공제 (cumulative deduction) amount so you can do one multiplication and one subtraction.
| Taxable base | Rate | Cumulative deduction |
|---|---|---|
| Up to ₩14M | 6% | — |
| ₩14M – ₩50M | 15% | ₩1.26M |
| ₩50M – ₩88M | 24% | ₩5.76M |
| ₩88M – ₩150M | 35% | ₩15.44M |
| ₩150M – ₩300M | 38% | ₩19.94M |
| ₩300M – ₩500M | 40% | ₩25.94M |
| ₩500M – ₩1B | 42% | ₩35.94M |
| Over ₩1B | 45% | ₩65.94M |
So if your taxable base is ₩40M, the calculation is ₩40M × 15% − ₩1.26M = ₩4.74M. Then you add a 10% local income tax on top, which brings the bill to around ₩5.21M before any tax credits.
Try this tool now:
Income Tax Calculator →Deductions vs. Credits — Why the Difference Matters
People mix these up, but the gap is huge. Income deductions (소득공제) reduce your taxable base before the bracket math. Tax credits (세액공제) come off the final tax bill. A ₩1M deduction at the 24% bracket saves ₩240K. A ₩1M tax credit saves a full ₩1M. Whenever you have a choice, credits win.
- Personal exemption: ₩1.5M per dependent, deducted before brackets
- National pension and health insurance: fully deductible for the self-employed
- Pension savings / IRP: up to ₩9M per year, credited at 13.2–16.5%
- Medical expenses above 3% of income: credited at 15%
- Donations: 15–30% tax credit depending on amount
- Monthly rent for qualifying renters: up to 17% credit
A Real Example: Freelancer Earning ₩40M
Let me run through the exact numbers for a freelance designer making ₩40M in gross revenue. They paid ₩1.32M in 3.3% withholding across the year, contributed ₩3.6M to national pension, and put ₩6M into an IRP account.
Comprehensive income tax on ₩40M revenue
This person gets money back — the IRP credit plus basic deductions beat the withholding. But change one variable, like skipping the IRP contribution, and the refund turns into a ₩248K bill. That's why May planning starts in January, not April 30.
How to Actually File in May
The window is May 1–31. You file through Hometax (홈택스) or the mobile app Sontax (손택스). For most freelancers, the flow is: log in with your certificate, pull the pre-filled data the tax office already has, add your deductions and credits, review, submit. Payment can be split into two installments if the bill is over ₩10M.
Three moves that actually lower the bill
First, max out IRP or pension savings before December 31 — this is the single biggest credit available to freelancers, worth up to ₩1.48M off your final tax. Second, collect every receipt that even smells like a business expense: software subscriptions, coworking, client lunches, domain fees. A higher expense rate drops your net income before the brackets even touch it. Third, if you donate, get the official 기부금 영수증 — it flows straight into the credit column in Hometax. These three moves together routinely swing a ₩2M bill into a refund.
Don't file late
If you miss May 31, the penalty starts at 20% of the unpaid tax for non-filing, plus 0.022% per day in late-payment interest. A ₩3M bill left alone for six months grows by roughly ₩720K. If you genuinely can't pay, file on time anyway — filing and paying are separate, and the 무신고 penalty is the expensive one.
Frequently Asked Questions
I'm a salaried employee with one job. Do I need to file?
No. Your employer already handled everything through 연말정산 in January. The only reason you'd touch 종합소득세 in May is if you had side income, rental income, or more than ₩20M in financial income on top of the salary.
I only made ₩5M freelancing on the side. Still file?
Yes, technically. Any business income triggers a filing obligation. The good news: at that level, the 3.3% that was withheld (₩165K) is usually more than the actual tax owed once you add deductions, so you'll likely get most of it back as a refund.
What counts as business expenses I can deduct?
Anything reasonably tied to earning the income — laptop, software, phone bill, internet, transportation to client meetings, coworking fees, professional education, business meals. Keep card statements and cash receipts. If your revenue is under the 간편장부 threshold, the tax office also lets you use a standard expense rate without itemizing.
Is the 누진공제 the same as a deduction?
No, it's just a calculation shortcut. Because each bracket stacks on the previous one, the 누진공제 is the pre-computed amount you subtract to get the same answer as manually applying each rate to each slice. It doesn't actually reduce your taxable income.
What's the difference between this and the freelancer tax calculator?
The freelancer tax calculator focuses on the 3.3% withholding flow for a single invoice or monthly income. The income tax calculator handles the full May filing — multiple income types, deductions, credits, local tax, and the final refund or balance due.
Income Tax Calculator
Plug in income, deductions, and credits to see your real May tax bill.
Calculate Now →▶Try the tools from this article
Seokjun
Founder of QuickFigure. Building tools that make complex calculations and document tasks simple for everyone.
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