Flat 19% vs Progressive
Foreign workers in Korea get a choice most taxpayers do not: a flat 19% on employment income, or the ordinary progressive brackets. One of them will cost you less — and it isn’t the same one for everyone.
The 20-year window runs from your first day of work in Korea, and the special provision is only open to people whose first work day falls on or before December 31, 2026.
Subtracted on the progressive side — but included in full in the 19% base. The same allowance that lowers one bill inflates the other.
Pension account, donations, insurance premiums and so on. All forfeited if you elect the flat rate.
| Progressive (기본세율) | Flat 19% (단일세율) | |
| Taxable pay (총급여액) | 51,600,000 | 54,000,000 |
| Employment income deduction | −12,330,000 | — |
| Personal allowances | −1,500,000 | — |
| Social insurance deducted | −5,014,164 | — |
| Tax base (과세표준) | 32,755,836 | 54,000,000 |
| Computed tax (산출세액) | 3,653,375 | 10,260,000 |
| Tax credits | −660,000 | — |
| Income tax (결정세액) | 2,993,375 | 10,260,000 |
| Local income tax | 299,338 | 1,026,000 |
| Total tax for the year | 3,292,713 | 11,286,000 |
| Effective rate on gross | 6.1% | 20.9% |
Given your other answers, the two methods meet at about 178,000,000 KRW of annual taxable pay. Below that the progressive rate wins; above it the flat rate does.
An estimate on annual figures, which is how the choice is actually made at 연말정산. Rates and tables as in force for tax year 2026 (소득세법 제47조·제55조·제59조; 조세특례제한법 제18조의2), checked Aug 28, 2026. Social insurance is estimated from your pay. Nothing you enter is stored.
How it works
Because the election has two time limits and both run off that date. It is available only for tax periods ending within 20 years of your first day of work in Korea, and — as the law stands — only to workers whose first day falls on or before December 31, 2026. Watch this space: the government’s 2026 tax reform bill (announced August 3, 2026) proposes extending the cutoff to December 31, 2029 while raising the flat rate from 19% to 21%. It is before the National Assembly and not yet law.
Two reasons. The 19% applies to your gross including pay that would otherwise be non-taxable — the meal allowance, the car allowance, childcare — because electing the flat rate switches the exemptions off. And local income tax is charged on top at 10% of the income tax, so the all-in rate is 20.9%, not 19%.
From the statute, in the order the law applies them: 총급여액 → 근로소득공제 (소득세법 제47조, capped at ₩20,000,000) → personal allowances (제50조·제51조) and your social insurance → 과세표준 → the eight-bracket rate table (제55조) → 근로소득세액공제 (제59조, with its sliding ceiling) → 결정세액, plus 10% local income tax. We test this engine against the National Tax Service’s own published worked example and it reproduces every line.
No, and it is important to say so. The National Tax Service explicitly declines to publish one — its position is that whether the flat rate helps “differs from person to person” depending on your tax base and deductions. Four different English-language sites publish four incompatible numbers and none shows its working. Ours is arithmetic from your own inputs, with the assumptions on screen. Confirm your own case in NTS’s year-end settlement service.
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Questions people ask
Yes. 조세특례제한법 제18조의2 제3항 switches off non-taxable treatment, deductions, reductions and tax credits together. The ₩200,000/month meal allowance, the car allowance, childcare pay and the production-worker overtime exemption all get pulled back into the 19% base. The one carve-out that survives is employer-provided housing (사택).
The election is made for a tax year at year-end settlement, so it is decided annually rather than locked in for good. Because the better answer moves with your salary, your dependants and your credits, it is worth re-running the comparison each year rather than assuming last year’s answer still holds. Confirm the mechanics for your own case with your employer’s payroll team or NTS.
Possibly. A qualifying foreign engineer under 조세특례제한법 제18조 gets a 50% income-tax reduction for ten years, and that reduction is forfeited if you elect the flat rate. Where it applies, progressive-with-reduction beats the flat rate at every income level. Eligibility is narrow — broadly, providing technology under an engineering transfer contract of USD 300,000 or more, or research at a qualifying foreign-invested R&D facility. Check it before electing anything.
No. The flat rate applies to employment income only. Severance and the national pension lump-sum refund are retirement income and are taxed separately under their own method — our severance and pension-refund calculators handle those.
Figures as of Aug 28, 2026 — the rules and official sources are set out in the payslip and tax guide.