“Interest and dividends above 20m won get taxed as global income” is true as far as it goes. What usually gets left off is the rest. Only the excess is aggregated, and if the figure that produces is smaller than the withholding calculation, you pay the withholding one instead. Which means there is a band where crossing the threshold costs nothing at all.
1. Two conditions, not one. Article 14(3)6 excludes income only where it is “20m won or less and withheld under article 127”. Below the threshold but not withheld is not separate taxation.
2. Above the line, only the excess aggregates. Article 62 taxes the first 20m at 14 per cent on its own and adds only what is over to other income at the basic rates.
3. Then it takes the larger. The article sets out two calculations and says to use the greater amount — on our arithmetic, with no other income, the withholding side stays larger up to 77.61m won, so nothing changes.
“20m or less” is not enough on its own
Income Tax Act, article 14 (calculation of the tax base) (3) The following shall not be aggregated in calculating the global income tax base. <Amended … 31 Dec 2023>
…
6. Interest income and dividend income other than those under items 3 to 5 (…), the total of which is 20m won (hereafter the “threshold amount for aggregate taxation of interest income etc.”) or less and which has been withheld under article 127
The clause reads “or less and withheld”. Both have to hold. Interest or dividends that were never withheld do not fall under this item however small they are — that is what the structure says.
And 20m won is a threshold, not a rate. Crossing it does not put a higher rate on everything; it changes how the tax is calculated.
Not every rate here is 14 per cent
The rates article 62 reaches for live in article 129, and interest and dividends are not all taxed alike.
| Type | Rate | Provision |
|---|---|---|
| Other interest income (deposits, bonds) | 14% | art. 129(1)1(d) |
| Other dividend income | 14% | art. 129(1)2(b) |
| Non-business loan interest (private lending) | 25% | art. 129(1)1(b) |
| └ but via a registered P2P lending operator | 14% | same item, proviso |
| Joint-business investor dividends | 25% | art. 129(1)2(a) |
| Income whose real name is not verified | 45% | art. 129(2)2, main text |
| └ but where the Real Name Act art. 5 applies | 90% | same item, proviso |
Interest on private lending is taxed at 25 per cent, not the same as a bank deposit. But the proviso pulls it back to 14 per cent when it comes through an operator registered under the online investment-linked finance law. Same “interest”, and the route it took decides the rate.
The 45 per cent for unverified names also carries a proviso — where article 5 of the Real Name Financial Transactions Act applies, the rate in that article governs. We have now opened that article.
Act on Real Name Financial Transactions and Confidentiality, article 5 (differential taxation of income from non-real-name assets) For interest and dividend income arising from financial assets transacted other than under a real name, the withholding rate for income tax shall be 90 per cent {for interest income from specified bonds, 20 per cent (15 per cent from 1 January 2001)}, and such income shall not be aggregated in calculating the global income tax base under article 14(2) of the Income Tax Act. [Wholly amended 14 July 2011]
Two things sit in that one sentence. The rate is 90 per cent (15 for specified bonds), and income taxed that way never enters the global tax base at all. So neither the 20m won threshold nor the twice-over calculation of article 62 reaches it — there is nothing to aggregate. 45 per cent was not the ceiling.
The widely quoted 15.4 per cent is not in the statute. It is the 14 per cent of article 129 plus local income tax, and we have now found the tail as well — Local Tax Act article 103-13(1).
Local Tax Act, article 103-13 (duty of special collection) (1) Where a withholding agent under the Income Tax Act or the Restriction of Special Taxation Act withholds income tax from a resident, an amount equal to 10 per cent of the income tax withheld (…) shall be specially collected as local income tax at the same time as the income tax. …
What the provision fixes is not a rate but “a tenth of the income tax” — a multiplier, not an addition. So 14 becomes 15.4, 25 becomes 27.5 and 45 becomes 49.5 (our own chaining of the two provisions). To see a maturity figure computed at 15.4 per cent, our Korean savings maturity calculator does it.
The statute calculates twice and takes the larger
Income Tax Act, article 62 (special calculation where interest income etc. is taxed as global income) Where the interest income and dividend income included in a resident’s global income tax base exceeds the threshold amount, the resident’s calculated global income tax shall be the greater of the following amounts; where it does not exceed the threshold, it shall be the amount under item 2. <Amended … 31 Dec 2018>
1. (a) The tax on the sum of the amount exceeding the threshold and other global income excluding interest and dividends
(b) The tax on the threshold amount at the rate in article 129(1)1(d)
2. (a) The tax on the interest and dividends at the rates in article 129(1)1 and 2 …
Three things are settled in that one article.
- Only the excess aggregates. Item 1(a) says “the amount exceeding the threshold” — the first 20m won is not in the aggregate at all.
- The first 20m is taxed separately at 14 per cent under item 1(b).
- And it is compared against item 2, which applies the withholding rates to the whole of the interest and dividends. The larger of the two is the tax.
With no other income, nothing changes up to 77.61m won
Computed from the article, for someone whose only global income is interest and dividends. Amounts in won.
| Income | Tax due | Rate | Item 1 · 2 |
|---|---|---|---|
| 20m | 2.8m | 14.00% | at threshold |
| 30m | 4.2m | 14.00% | 3.4m · 4.2m |
| 50m | 7.0m | 14.00% | 6.04m · 7.0m |
| 70m | 9.8m | 14.00% | 9.04m · 9.8m |
| 77.61m | 10.866m | 14.00% | flips here |
| 80m | 11.44m | 14.30% | 11.44m · 11.2m |
| 100m | 16.24m | 16.24% | 16.24m · 14.0m |
| 150m | 32.86m | 21.91% | 32.86m · 21.0m |
The effective rate does not move off 14.00 per cent until 77.61m won. The income becomes reportable, but because item 2 is the larger figure, what was already withheld simply is the tax.
The reason is that item 1(a) starts at the 6 per cent band. With no other income, the excess enters the rate table at the bottom rung, while item 2 applies 14 per cent to everything. It takes a while for the first to catch the second.
Below the threshold nothing here changes — how tax differs by asset type is in our Korean ETF tax guide, and the route that avoids it altogether is the ISA account.
A salary removes that headroom
| Other global income | Crossing point | Below it |
|---|---|---|
| none | 77.61m won | no increase |
| 5m won | 68.61m won | no increase |
| 10m won | 56.01m won | no increase |
| 13.99m won | 20.10m won | headroom of 0.1m |
| 14m won or more | 20.01m won | it costs from the first won over |
14m won is not a coincidence. It is the first boundary of the basic rate table (6 per cent up to 14m). Once other income passes that line, the excess financial income starts in the 15 per cent band and so clears 14 per cent immediately. The crossing point collapses to just above the threshold.
Put another way, this headroom belongs to people whose income is only financial. With any substantial salary or business income, the cost starts the moment you pass 20m won. The structure of the annual filing itself is in our Korean global income tax piece.
Where readers usually go wrong
Does everything get aggregated once I pass 20m?
No. Item 1(a) tells you to add only “the amount exceeding the threshold” to other income. The first 20m is handled separately at 14 per cent by item 1(b).
So can I skip filing if the tax does not change?
The statute splits it in two. Article 70(1) requires a resident with global income to file between 1 and 31 May of the following year, and article 73(1)8 says a person with “only separately taxed interest income, separately taxed dividend income …” may choose not to file the final return. Item 9 covers people with, say, wage income only who also hold separately taxed interest and dividends.
So once you pass 20m won and the income is aggregable, you are in the return — even in the band where the tax does not rise. Item 8 carries one parenthesis, though: “excluding income not withheld under article 127”. Interest or dividends that were never withheld cannot use this exemption however small they are — the same direction as the double condition in article 14(3)6 above. Forms and procedure are with the National Tax Service.
Is health insurance also based on 20m?
One of the numbers is the same; the basket is not. We opened two provisions this time.
- Enforcement Decree of the National Health Insurance Act, article 41(4) — the “amount prescribed by Presidential Decree” in article 71(1) of the Act is “20m won a year”. Same number as the tax threshold, but here it is subtracted from total non-wage income (interest, dividends, business, wage, pension and other income together).
- Enforcement Rule, article 44(1), proviso — “where income under article 14(3)6 of the Income Tax Act is 10m won or less, that interest and dividend income shall not be aggregated”. Whether financial income counts at all turns on 10m won.
Which opens a band between 10m and 20m won. Tax law leaves it alone; health insurance counts it — and counts all of it, not the excess. This is the cliff our piece on health premiums after retirement described as “10,000 won of income, 810,000 won of premium”.
Above 20m, it splits by the kind of insured person — we opened Act art. 71 on 18 September 2026. A locally insured person falls under para. 2: annual income divided by twelve, with nothing subtracted. An employee falls under para. 1: 20m is taken off first, then divided by twelve. The provisions are set out below.
What still does not read off the text is the proviso to Rule art. 44(1): the income it points to is 20m or less and withheld, so how that proviso applies past the threshold remains unsettled. Ask the National Health Insurance Service for that one point.
Is it assessed per couple?
No — the statute says “each.” Article 2(1) reads “an individual falling under any of the following shall be liable to pay income tax on his or her own income under this Act”. Article 62’s “included in a resident’s global income tax base” runs the same way.
And article 2-2 (scope of liability) enumerates the cases where liability is shared — joint business operators, heirs for a decedent’s income, donor and donee, and co-owners of an asset on disposal. Spouses are not on that list. In an enumerating provision, what is absent from the list is the answer.
Twenty million is not the line where the rate changes. It is the line where the method changes — and the method runs twice, keeping the larger.
Sources
- Korean Law Information Center, Ministry of Government Legislation — statutory text — Income Tax Act, article 14(3)6 and article 62. The double condition “or less and withheld”, the comparison structure “the greater of the following amounts” and item 1(a)’s “amount exceeding the threshold” are transcribed from the text. This version is in force from 1 January 2026, Act No. 21221 (amended 23 December 2025).
- Korean Law Information Center — statutory text — Income Tax Act, article 129 (withholding rates) and article 55(1). The 14, 25 and 45 per cent figures above, the P2P proviso and the eight-band basic rate table come from there. Same version.
- Korean Law Information Center — statutory text — Act on Real Name Financial Transactions and Confidentiality, article 5. The 90 per cent, the 15 per cent for specified bonds and “shall not be aggregated in calculating the global income tax base” are transcribed from the text. In force from 1 April 2025, Act No. 20894.
- Korean Law Information Center — statutory text — Local Tax Act, article 103-13 (duty of special collection). The tail of 15.4 per cent — “10 per cent of the income tax withheld” — is here. In force from 1 January 2026, Act No. 21308.
- Korean Law Information Center — statutory text — Enforcement Decree of the National Health Insurance Act, article 41 and the Enforcement Rule, article 44. Article 41(4)’s “20m won a year” and the article 44(1) proviso’s “10m won or less” are the text. Decree in force from 19 February 2026 (Presidential Decree No. 36116); Rule from 11 August 2026 (Ministry of Health and Welfare Decree No. 1187).
- The arithmetic and the crossing points are ours — both items of article 62 were transcribed into code and swept in 10,000-won steps to find where they flip. Deductions and tax credits are not included (adding them moves the crossing point), and every amount is treated as falling under the 14 per cent rates. These figures illustrate the structure; they are not anyone’s tax bill.
How health insurance counts financial income above 20m
This article said it could not settle that from the text. It was reading the wrong provision — the proviso to Rule art. 44(1) is about wage-based income, while financial income enters through the “income-based monthly amount”. We opened that on 18 September 2026.
National Health Insurance Act art. 71(1) — an employee insured's non-wage monthly income is computed where non-wage income exceeds an amount prescribed by Presidential Decree:
(annual non-wage income − that amount) × 1/12
— the formula is an image in the provision; transcribed from its alt text
| Item | Provision | Content |
|---|---|---|
| That “amount” | Decree art. 41(4) | KRW 20m a year |
| Locally insured | Act art. 71(2) (inserted 6 Feb 2024) | Annual income divided by twelve — nothing subtracted |
| Which income counts | Decree art. 41(1) | Interest, dividend, business, employment, pension, other — six (tax-exempt excluded) |
| Which year's data | Decree art. 41(3) | Jan–Oct: two years back; Nov–Dec: last year (pension: last year) |
| Who pays | Act art. 77(1)2 | The insured person pays the non-wage premium (only the wage-based one is the employer's) |
- Only the excess. Crossing 20m does not bring the whole sum in — the provision subtracts 20m first, then divides by 12. Same number as the tax threshold, opposite treatment: for income tax, crossing pulls the entire 20m into global taxation.
- Interest and dividends sit side by side as items 1 and 2 (Decree art. 41(1)) — the same pairing this article uses for the rates.
- 🔴 There is a lag. January–October premiums run on data from two years back. Cross 20m this year and the bill arrives about two years later — clearing the tax threshold is not the end of it.
The rate and the adjustment process remain outside the text — the rate changes yearly, and Decree art. 41-2 provides separately for adjustment on closure or a fall in earnings and for later settlement. For the figure, ask the National Health Insurance Service (1577-1000).
Where to check further
- Your actual premium above 20m won. How it is counted was settled on 18 September 2026 (below: Act art. 71(1), Decree art. 41) — what remains is the rate and the adjustment/settlement process, which the National Health Insurance Service handles.
- Forms and filing procedure. Articles 70 and 73 settle whether you are in the return; the forms and payment procedure are not covered here — see Hometax.
- Filing and paying local income tax. Local Tax Act art. 95 sets it: a resident filing a global income return under the Income Tax Act files and pays personal local income tax by the same deadline (para. 1), deducting the tax specially collected under article 103-13 (the 1.4% taken from interest and dividends, among others) (para. 3.4); a bill over ₩1 million may be split over two months (para. 4). Forms are on Wetax (checked 23 September 2026).
Written in August 2026 and revisited in September. The quoted provisions are the text as published by the Korean Law Information Center, and the tax figures and crossing points are our own, from transcribing article 62 into code — a simplified calculation with no deductions, as noted beneath the tables. The five places we first left as “not verified” — the Real Name Act rate, local income tax, the filing obligation, the health insurance threshold and joint assessment — have now been filled from the statutes, and only health insurance above 20m won is still open. Our other everyday tools are in the calculator index.
