If you earned a salary in Korea in 2026, your employer will settle your income tax for the year in January–February 2027 — this is year-end tax settlement (연말정산, yeonmal jeongsan). Most foreign employees get money back; some owe more. The difference is mostly in what you prepare now, in November and December. Here is what applies to foreigners, step by step.
The 2026 timeline
| When | What happens | What you do |
|---|---|---|
| Nov – Dec 2026 | Last chance to change your 2026 spending and savings | Use debit cards / cash receipts, top up pension accounts, keep rent transfer records |
| Around Jan 15, 2027 | Hometax Simplified Service (연말정산 간소화 서비스) opens | Download your deduction records (medical, card, insurance) as PDF |
| Jan – Feb 2027 | Employer collects your forms | Submit deduction forms and proof; choose flat 19% or standard |
| Feb – Mar 2027 payslip | Refund or extra tax appears | Check your payslip and withholding receipt |
| May 2027 | Comprehensive income tax filing month | Claim anything you missed (or file a correction within 5 years) |
Standard method or the flat 19% rule?
Foreign employees can choose to pay a single 19% income tax (20.9% including local tax) on their total pay instead of Korea’s progressive rates. The option lasts up to 20 years from the year you first worked in Korea; under current law it covers people whose first Korean employment starts by December 31, 2026. It is not available if you own 30% or more of the company that employs you.
The catch: under the flat rate you lose every deduction, exemption and credit — even normally non-taxable items, such as health insurance premiums your employer pays for you, become taxable. For most salaries the standard method is cheaper; the flat rate tends to help only high earners with few deductions. Run both options in our Korea salary calculator before you decide, and tell your payroll team by the time you hand in your year-end forms.
Deductions foreigners can claim (standard method)
| Deduction | Can foreign residents claim it? | Key conditions |
|---|---|---|
| Card spending (신용카드 소득공제) | Yes — Korean spending only | Counts once spending passes 25% of your salary; debit cards and cash receipts get a higher rate than credit cards; overseas spending does not count |
| Monthly rent credit (월세 세액공제) | Yes, for resident foreign workers (since the 2021 tax year) | No home owned, salary up to ₩80M, home up to 85㎡ or official price up to ₩400M, rent paid by bank transfer, lease address matching your registered address |
| Dependents (부양가족 공제) | Yes, including family living abroad | ₩1.5M per person; parents 60+ or children 20 or under (spouse: any age), income under ₩1M; abroad you need relationship certificates (apostilled + translated) and remittance records |
| Medical and education costs | Yes — in Korea only | Overseas hospitals and schools do not count; licensed foreign schools in Korea do |
| Pension savings & IRP (연금저축·IRP) | Yes | Contributions made by December 31 count for 2026 |
| Housing subscription savings (주택청약종합저축) | Foreign spouses of Koreans only | Salary up to ₩70M, no home owned; 40% of up to ₩3M a year |
Special rules worth checking
- Native English teachers: some tax treaties exempt teaching income for a limited period (often the first two years). Conditions differ by treaty — check yours before assuming you owe nothing.
- Qualified foreign engineers: a 50% income tax reduction for up to 10 years may apply if you meet the education and overseas R&D experience rules.
- Leaving Korea mid-year: your employer settles your tax with your final pay. Ask for your withholding receipt (근로소득 원천징수영수증) before your last day; missed deductions can be claimed in May.
Your November–December checklist
- Check your card spending so far. If you have already passed 25% of your salary, switch to a debit card or cash receipts (현금영수증) for the rest of the year — they earn a higher deduction rate.
- Register your phone number for cash receipts. Give your phone number at checkout so cash and bank-transfer purchases count. You can register the number for cash receipts on Hometax.
- Pay rent by bank transfer. Rent paid in cash cannot be proven. Keep your lease and transfer records together.
- Collect dependents’ documents early. Apostilles and translations for family abroad take weeks. Start now if you plan to claim parents or children overseas.
- Decide on pension top-ups. Pension savings and IRP contributions must arrive by December 31 to count for 2026.
- Compare standard vs. flat 19%. Use the calculator, then tell payroll which method you want.
Useful calculators
Renting? Read our jeonse fraud checklist for foreign tenants too.
Frequently asked questions
Do I have to do anything, or does my employer handle it?
Your employer runs the calculation, but you must give them your deduction forms and proof. If you hand in nothing, you only get the basic deductions and may miss a refund.
Can I switch between the flat 19% rate and the standard method each year?
You choose for each tax year when you submit your year-end forms, and the choice covers that whole year. Compare both every year — the better option can change as your salary and family situation change.
Is the Hometax Simplified Service available in English?
Hometax has English menus for many services, and the National Tax Service publishes an English “Easy Guide” for foreigners every year. Your payroll team can also download the data with your consent.
I am not a tax resident. What can I claim?
Non-residents (in Korea under 183 days with no base here) can claim only a narrow set of items. Housing, medical, education and dependent-family deductions are generally not available, so check with payroll.
What if I missed a deduction?
You can claim it during the May comprehensive income tax filing, or file a correction (경정청구) within five years.
Sources: National Tax Service (English); The Korea Times, Jan 7, 2026; Newsis: foreign workers eligible for rent credit; SeoulStart year-end guide.
General information only, not tax advice. Rules can change in the 2027 tax law amendments — confirm details with your payroll team or the NTS (tax helpline 126). Last checked November 2026.
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