Work freelance in Korea and 3.3% disappears from every payment. Here is the odd part: the number 3.3% appears in no statute. We opened the provisions themselves on the Korean government legal information service, and 3.3% turns out to be two laws multiplied together.
As of July 2026 — the Income Tax Act says only "3/100 on business income subject to withholding" (art. 129(1)3). The Local Tax Act then adds "an amount equivalent to 10/100 of the income tax withheld … shall be specially collected as individual local income tax" (art. 103-13(1)). 3% x 1.1 = 3.3%.
⭐⭐⭐ Every withholding rate is the statutory rate x 1.1
Once you see the structure, all the familiar numbers explain themselves. Local income tax is 10% of the income tax amount, not a rate of its own.
| Income type | Statutory rate (art. 129) | With local income tax |
|---|---|---|
| Business income subject to withholding | 3/100 | ⭐ 3.3% |
| Service charges | 5/100 | 5.5% |
| Interest and dividends (general) | 14/100 | 15.4% |
| Other income (general) | 20/100 | 22% |
| Non-business loan interest | 25/100 | 27.5% |
| Income of unverified ownership | 45/100 | 49.5% |
⭐⭐ The famous 15.4% on bank interest is the same rule — 14% plus 10% of that. Only the left-hand column exists in the statute; the right-hand column is our multiplication.
⭐⭐ The 8.8% takes three provisions
Lecture fees, writing fees and one-off consulting are usually "other income" rather than business income. The statutory rate there is 20%, yet only 8.8% is withheld. We followed the provisions to see why.
- Income Tax Act Decree art. 87(1-2) — for personal-service and similar other income, "an amount equivalent to 60/100 of the amount received by the resident shall be the necessary expense." ⭐ With a proviso: "if the necessary expense actually incurred exceeds … the excess shall also be included."
- Income Tax Act art. 129(1)6(d) — other income generally is taxed at 20/100. Of 1,000,000 won, only 400,000 is taxable, so 80,000 won.
- Local Tax Act art. 103-13(1) — 10% of that, 8,000 won, brings it to 88,000 won.
⭐⭐⭐ So 8.8% is not a rate at all — it is 40% x 20% x 1.1 (our arithmetic). If the deemed 60% exceeds what you actually spent, other income treatment favours you; if your real costs are higher, documenting them is the better route.
Why it is all recalculated in May
Withholding applies a flat percentage to the gross payment. It sees no expenses, no dependants, no other income. The real liability accounts for all of those, and that reckoning is the May comprehensive income tax return.
From the government legal information service, verbatim — "A resident who has global income in the relevant taxable period (including a resident with no global income tax base or with a deficit) shall report the global income tax base to the head of the competent tax office from 1 May to 31 May of the following year" (Income Tax Act art. 70(1)).
⚠️⚠️ The parenthesis carries the weight. "Including a resident with no global income tax base or with a deficit" means a zero liability is still a filing obligation. And the same page warns that without filing, "you cannot receive various tax credits and reductions, and may bear heavy penalty taxes."
Business income or other income?
The same work can fall either way. The guidance sets out the test:
| Category | Test | Withheld |
|---|---|---|
| Business income | income from activity carried on "continuously and repeatedly on one's own account and responsibility" for profit (art. 19) | 3.3% |
| Employment income | ⚠️ where there is "substantial direction and supervision by the employer" or subordination, making it more appropriate to treat as labour | simplified tax table |
| Other income | one-off personal services and the like (art. 21(1)) | 8.8% |
⚠️ You do not choose the category; the nature of the work does. Check which one your withholding receipt shows. If you have both, May combines them.
⭐ The 3 million won fork in other income
Art. 14(3)8(a) defines "other income of 3 million won or less that has been withheld" as separately taxed other income — it need not be rolled into your global income at all.
| Test | Amount in the statute | Provision |
|---|---|---|
| Other income, separate taxation | other income amount of 3M won or less | art. 14(3)8(a) |
| Interest and dividends, global threshold | 20M won combined | art. 14(3)6 |
| Residential rental, separate taxation | gross receipts of 20M won or less | art. 14(3)7 |
⚠️⚠️ The test is the "other income amount," not what you were paid. That is the figure after the 60% deemed expense — so 3 million won corresponds to 7.5 million won of gross fees (our arithmetic: 7.5M x 40% = 3M). ⭐ The same "3 million" differs by more than double depending on which stage it refers to.
⭐ The provision continues with a proviso beginning "provided that, where a resident with such income …" — separate taxation is an option, not a requirement. Someone in a low bracket may do better by combining.
How to file
- Window — 1 May to 31 May of the following year (art. 70(1)).
- Method — verbatim: "electronic filing via Hometax, electronic filing via mobile Sontax, filing through a tax agent, downloading the form from the National Tax Service website, or completing a form available at the tax office and submitting it to the competent tax office."
- ⭐ Pre-filled returns — the guidance notes that someone on the simplified expense rate with only delivery-agency business income can use the pre-filled return, with the refund or payment already computed by the tax office.
- Payment — Hometax electronic payment, a bank, Cardrotax or Internet Giro.
Actual liability by bracket is worked through in the comprehensive income tax article, and you can run your own figures in the income tax calculator. For years already missed, see the amended return.
Questions that remain
They already took 3.3% — why file again?
Because withholding is a flat percentage of the gross payment with no expenses or deductions in it. May compares that against the real liability: overpaid comes back, underpaid is topped up.
Can I skip it if I earned very little?
⚠️ The provision expressly includes "a resident with no global income tax base or with a deficit." The obligation does not depend on the amount.
When does the refund arrive?
⚠️ We could not confirm this. Neither the provisions nor the guidance page states a payment date. An earlier version of this article said "usually June or July"; with no source, it is gone.
Is other income better than business income?
⭐ It depends on whether the deemed 60% beats what you actually spent. If your real costs are higher, the Decree's proviso lets you include the excess — so keep the documentation.
What about VAT?
Some personal services are VAT-exempt. The structure is in the VAT guide, and the year's deadlines in the tax calendar.
Sources
- ⭐⭐⭐ Korean Law Information Center — statute — Income Tax Act art. 129 (withholding tax rates) (in force 1 Jan 2026, Act no. 21221). Source for 3/100 on business income, 20/100 on other income, 14/100 on interest and dividends, 25/100 on non-business loan interest, 5/100 on service charges and 45/100 on income of unverified ownership.
- ⭐⭐⭐ Korean Law Information Center — statute — Local Tax Act art. 103-13 (duty of special collection) (in force 1 Jan 2026, Act no. 21308). Source for the "10/100 of the income tax withheld" rule and the 10th-of-the-following-month deadline.
- ⭐⭐ Korean Law Information Center — statute — Income Tax Act Enforcement Decree art. 87 (necessary expenses for other income) (in force 1 Jul 2026, Decree no. 36343). Source for the 60% deemed expense and the "excess also included" proviso.
- ⭐⭐ Korean Law Information Center — statute — Income Tax Act art. 14 (computation of the tax base). Source for the 3M won, 20M won and 20M won separate-taxation thresholds.
- ⭐⭐ Ministry of Government Legislation, Easy-to-Find Practical Laws — primary source — "Delivery app workers > Filing the comprehensive income tax return" (page states as of 15 July 2026). Source for the business-versus-employment test, the 1–31 May window, the consequence of not filing, the filing and payment methods, and the pre-filled return.
- Our own arithmetic — 3.3% / 5.5% / 15.4% / 22% / 27.5% / 49.5% (statutory rate x 1.1), 8.8% = 40% x 20% x 1.1, and 7.5M won gross = 3M won of other income.
What we could not confirm
- ⚠️⚠️⚠️ The simplified and standard expense rates. The earlier version quoted "64.1% simplified," "19.4% standard" and a "24 million won prior-year threshold" for personal services. Those live in National Tax Service notices we could not open, so all of them are gone — along with the worked example ("30M won of revenue → about 380,000 won refunded") that rested on them.
- ⚠️⚠️ When a refund is actually paid. Not in the provisions, not on the guidance page.
- ⚠️ The specific penalty rates. The source says only "heavy penalty taxes" and points to the National Tax Service.
- ⚠️ The income tax rate table. Art. 55(1) is published as an image on the legal information service, so we could not read it as text. Rates are covered in the comprehensive income tax article.
- ⚠️ Which subparagraph your own other income falls under. Decree art. 87(1-2) points to art. 21(1) subparagraphs 7, 8-2, 9, 15 and 19; which applies depends on your contract, so we have not asserted one.
- ⚠️ The listed ministry. The legal information service lists the responsible ministry for the Income Tax Act as the Ministry of Economy and Finance under a renamed form. We reproduced the label as shown and did not investigate the reorganisation.
3.3% is not a rate — it is 3% x 1.1. And it is not a tax bill either; it is money taken in advance. The actual figure appears in May.
As of July 2026 (Income Tax Act and Local Tax Act in force 1 Jan 2026; Decree 1 Jul 2026; guidance page as of 15 Jul 2026). Rates and provisions are the Korean Law Information Center verbatim; the x1.1 multiplications, the 8.8% breakdown and the 7.5M won conversion are ours. ⚠️ This is not tax advice — expense rates and actual liability vary by trade and income, so confirm through Hometax or a tax professional.
