Priya, an engineer on an E-7 visa, heard from a colleague that "foreigners only pay 19% tax." Her progressive rate goes up to 24%, so it sounded like a bargain. She was ready to email HR and ask for it.
Then she ran the numbers on her ₩65 million salary and found the flat rate would cost her about ₩700,000 more a month.
The government's August 2026 tax reform proposal would raise the flat rate to 21% (23.1% with local tax) from January 2027. It still needs National Assembly approval, expected around December 2026. Until then 19% applies. See our income tax guide.
The 19% flat rate taxes every won of your salary, allowances included, and switches off every deduction and credit. Korea’s normal tax only reaches an effective 19% at very high incomes, so the flat rate pays off only for top earners.
How the flat rate works
- It’s in the Restriction of Special Taxation Act (조세특례제한법), article 18-2: 외국인근로자 단일세율 특례.
- Rate: 19% income tax + 1.9% local tax = 20.9% of gross pay.
- No deductions, no tax-free allowances, no credits for children, pension, insurance, rent or donations.
- Who can use it: foreign employees (not day laborers) who started working in Korea by 31 December 2026. It can be used for 20 years from the first day of work.
- How: ask your employer to apply it at year-end tax settlement (연말정산), or choose it when you file in May. You can also ask for it to be withheld monthly.
Why the normal rates usually win
Korea’s top rates look scary (up to 45%), but they apply only to the slice of income above each band, after generous deductions. The earned income deduction alone removes millions of won before any rate applies.
₩60 million salary, single, ₩200,000 meal allowance (2026):
Normal rates: income + local tax ≈ ₩330,000 a month
Flat rate: ₩5,000,000 × 20.9% ≈ ₩1,045,000 a month
Difference: about ₩715,000 a month in favour of the normal rates.
When the flat rate can make sense
Salaries under about ₩100 million, people with children or a dependent spouse, and anyone with big deductions such as rent or medical bills.
Executives and specialists on very high pay, roughly ₩180 million and up, with few deductions. Have a tax accountant confirm.
You don't have to decide once and for all. The choice is made year by year at tax settlement, so you can compare both methods with your actual year's numbers each February.
Things people get wrong
- “Foreigners pay a lower tax rate.” Not by default. You pay the same tax as Koreans unless you elect the flat rate.
- “19% means 19%.” It’s 20.9% once local tax is added, and it’s on gross pay.
- “It’s forever.” It’s limited to 20 years from your first day of work in Korea, and only for people who started by the current cut-off date. The government has extended the cut-off before, so check the current rule.
Try both methods side by side with the switch in the salary calculator, then read what each payslip line means.
Sources: Restriction of Special Taxation Act art. 18-2; Income Tax Act art. 47, 55; National Tax Service guide for foreign workers.
Try it with your own numbersKorea Salary Take-Home CalculatorEnter your annual salary to see what lands in your bank account each month, with every deduction explained.Written from the laws and official notices in force on the date above. Rules change and every case is different, so check with the office named in the article before an important decision. Spotted something out of date? Tell us.