Taxes for foreigners in Korea: year-end settlement, the flat tax rate and leaving Korea

TUREFF• •0

If you work for a Korean employer, most of your income tax is handled for you, but there are a few choices and deadlines that are yours to manage. This is an overview of how it works for foreign employees. It is general information, not tax advice: rules depend on your visa, income and nationality, and they change every year.

How income tax is collected

Your employer withholds income tax, plus local income tax (an extra 10% of the income tax), from every pay packet using standard tables. That withholding is only an estimate. The real figure for the year is worked out in the year-end tax settlement (연말정산).

Year-end tax settlement

It happens in January and February for the previous calendar year, through your employer.
You submit details of deductions and credits: insurance premiums, medical bills, education costs, card spending, housing rent, pension contributions, donations and dependants.
Most of the data is gathered automatically in the National Tax Service's simplified service on Hometax; you download it and hand it to your employer, or your employer collects it.
The result appears in your February or March salary as a refund or an extra deduction.

Card spending matters: a share of what you spend on Korean credit and check cards and on public transport counts towards a deduction, which is one reason colleagues use a Korean card for everything.

The flat tax rate for foreign workers

Korea offers foreign employees a choice between the normal progressive rates (from 6% up to 45%) and a single flat rate.

Under current law the flat rate is 19% (20.9% with local income tax), applied to your total employment income.
It is open to foreign workers who first started working in Korea on or before 31 December 2026, and can be used for up to 20 consecutive years from then.
If you choose it, you give up the deductions and tax credits of the normal system.
It does not apply if you work for certain related parties of your employer.
You elect it at year-end settlement (or in the May filing).

A change is proposed. The government's 2026 tax reform proposal, announced in August 2026, would raise the flat rate to 21% (23.1% with local tax) for income from 2027 and extend the deadline for starting work to the end of 2029. At the time of writing this was a proposal, not law; check the National Tax Service or your employer's payroll team for what was finally passed. The flat rate usually helps people on high salaries and hurts people on modest ones, but run both calculations; your payroll office or a tax adviser can do it.

Tax treaties

Korea has tax treaties with most countries. They decide which country taxes what and how to avoid paying twice. Some treaties include an exemption for teachers or researchers for a limited period, which matters for English teachers from certain countries. You usually have to apply for a treaty benefit through your employer; it is not automatic. Check the treaty between Korea and your own country, and your home country's rules on foreign income.

Hometax and May filing

Hometax (hometax.go.kr) has an English section and a phone app. Log-in needs a certificate or simple authentication, which works once you have a residence card, phone and bank account in your name.
If you have income besides one salary, such as freelance work, a second job or rental income, you may need to file a comprehensive income tax return in May.
The NTS runs an English helpline for foreign taxpayers.

Leaving Korea

When you leave a job, your employer does a settlement on departure for that part of the year.
If you leave the country for good, make sure that settlement is done and that any May filing is either handled or delegated to a tax agent.
Depending on your nationality, you may be able to claim a lump-sum refund of National Pension contributions when you leave. Check with the National Pension Service before your flight; some claims can be made at the airport.
Close Korean accounts, cards and phone contracts in a sensible order: keep the bank account open until the last refund has arrived.

Where to check

National Tax Service English pages and the foreigners' tax guide it publishes each year
Your employer's payroll or HR team
A Korean tax accountant (세무사) for anything unusual

Our earlier guides on banking and moving to Korea cover the account and residence card you need first. Ask about your own situation, or share what you learned at settlement time, in the comments.