How does Korean income tax work?

Korea taxes earned income on an annual basis using eight progressive brackets from 6% to 45%. Before the brackets apply, salary is reduced by a bracketed earned-income deduction and personal deductions, and a 10% local income surtax is added on top of the national tax.

What is the earned-income deduction?

The earned-income deduction (근로소득공제) is a tiered percentage of gross salary that recognises the cost of earning income. It is 70% on the first 5 million won, falling to 2% on income over 100 million, and is capped at 20 million won.

What is the progressive-deduction method?

Rather than taxing each income slice at its own rate, the whole tax base is multiplied by the top marginal rate and a fixed progressive deduction for that bracket is subtracted. The answer matches the slice method but is a single calculation.

What is the local income tax?

On top of national income tax, residents pay a local income tax equal to 10% of the national tax. So a national tax of 5 million won adds 500,000 won of local tax, for 5.5 million total.

Does this include every credit?

No. A real Korean tax return applies many credits such as medical, education, donation and credit-card-spending deductions. This tool models the standard self-only case with a single other-deductions field, so treat it as an estimate.

South Korea Income Tax Calculator

South Korea’s earned-income tax (근로소득세) is an annual, progressive tax with eight brackets from 6% to 45%, plus a 10% local surtax. Several deductions stand between gross salary and the taxable base. This calculator estimates the standard resident case entirely in your browser.

How it works

The calculation flows in stages:

Earned-income deduction — a tiered percentage of gross salary (70% on the first 5m won, tapering to 2% above 100m), capped at 20m won.
Personal basic deduction — 1.5m won for yourself (plus optional other deductions you enter).
Tax base = gross − earned-income deduction − basic deduction − other.
Brackets — the base is taxed with the progressive-deduction method:

≤ 14,000,000     6%    PD 0
≤ 50,000,000     15%   PD 1,260,000
≤ 88,000,000     24%   PD 5,760,000
≤ 150,000,000    35%   PD 15,440,000
≤ 300,000,000    38%   PD 19,940,000
≤ 500,000,000    40%   PD 25,940,000
≤ 1,000,000,000  42%   PD 35,940,000
> 1,000,000,000  45%   PD 65,940,000

national tax = base × rate − progressive deduction

Local income tax = 10% of national income tax.

Notes

The earned-income deduction, not raw salary, sets the base, so two people with the same gross pay but different deductions owe different tax. Real year-end settlement adds many credits (medical, education, card spend) not modelled here. Confirm figures with the National Tax Service.