South Korea's income tax runs from 6% to 45% across 8 brackets, but the hidden 10% local income tax surtax pushes the true top rate to 49.5% for income above ₩1 billion (~$715,000 USD). Foreigners get a powerful option: a flat 19% + 1.9% local = 20.9% total for up to 20 years, with no deductions but big savings for high earners above ₩160 million. The 5-year rule protects expats: if you've been resident in Korea 5 years or less in the past 10, foreign-source income is taxed only when it is paid in or remitted to Korea. Employee social insurance adds about 9.7%: National Pension 4.75%, National Health Insurance 3.595%, long-term care about 0.47% and employment insurance 0.9%.
Note: These are marginal rates — you only pay the higher rate on income within each bracket.
Source: National Tax Service
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South Korea uses 8 progressive brackets from 6% to 45%, plus a mandatory 10% local income tax surtax. This means the effective rates are 6.6% to 49.5%. The 45% top rate (49.5% with local tax) applies to income over ₩1 billion (~$715,000 USD). Income in the ₩50-88 million band is taxed at 24% + 2.4% = 26.4%.
Foreign workers starting employment in Korea by December 31, 2026 can elect a flat 19% national rate (20.9% with local tax) instead of progressive rates for up to 20 years. You must apply to the National Tax Service or your employer. The catch: you lose all deductions and credits. It's typically beneficial for foreigners earning above roughly ₩160 million annually.
Annual tax returns are due May 31 following the tax year. However, most employees don't file separately—employers perform year-end tax settlement (연말정산) in February, adjusting for credits and deductions. Self-employed individuals and those with multiple income sources must file the May return.
Expats benefit from the 5-year rule: if you've been resident in Korea for 5 years or less in the past 10 years, foreign-source income is taxed only when it is paid in or remitted to Korea. After that, you're taxed on worldwide income. A 50% income tax reduction for foreign engineers existed for those who began work in Korea on or before 31 December 2023; check with the National Tax Service whether any reduction still applies to you.
Employees pay approximately 9.7% in social contributions: National Pension 4.75% (capped at about ₩303k/month, rising to about ₩313k from July 2026), National Health Insurance 3.595%, Long-Term Care ~0.47%, and Employment Insurance 0.9%. The National Pension rate is increasing gradually to 6.5% by 2033 as part of pension reform.
Yes, US citizens working in South Korea pay Korean income tax unless exempt under SOFA (Status of Forces Agreement) for US military personnel and certain civilian employees. The US-Korea tax treaty prevents double taxation via foreign tax credits. The 19% flat tax rate (20.9% with local tax) can beat progressive rates above about ₩160 million. You must file both Korean taxes and US taxes (IRS Form 2555 for FEIE or Form 1116 for foreign tax credits). US military under SOFA pay only US taxes, not Korean taxes.
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Last Updated: October 2026