You freelanced in Korea, 3.3% was withheld, and now you have no idea whether May brings a refund or a bill. Enter your income and expenses to see the whole chain — taxable base → computed tax → refund or additional payment.
1. What comes out. On the personal-services simplified rate, the refund peaks at exactly ₩40M a year (about ₩471,000). Above that it falls away and flips into an additional payment at ₩51.68M (our calculation).
2. What gets missed. The simplified rate is not one number but two. Article 4 of the NTS notice applies a base rate (64.1%) to income up to ₩40M and an excess rate (49.7%) above it for personal services (business code 940***). Running 64.1% across the whole range overstates expenses.
3. How to use it. Pick an expense method and set the number of dependants. Results include the 10% local income tax but exclude national pension contributions and tax credits — the real crossover sits a little higher.
Calculates automatically using the rate table for the May 2026 filing, including local income tax (10% of computed tax). This estimate excludes tax credits, social insurance and other income types. Eligibility for expense rates depends on your business type and prior-year income.
What order does the calculation go in
With the defaults (₩30,000,000 income, 64.1% simplified expense rate, deduction for yourself only):
- ₩30,000,000 − 64.1% expenses (base-rate band) = net income about ₩10,770,000
- − ₩1,500,000 basic deduction = taxable base about ₩9,270,000 → 6% bracket
- Computed tax about ₩550,000 + 10% local tax = about ₩610,000 total
- Compared with the 3.3% already withheld (₩990,000) → refund of about ₩380,000
Lower income tends to mean a refund; higher income means paying more. Think of the 3.3% not as your actual tax but as a deposit withheld in advance.
What rate applies to my taxable base
Computed tax = taxable base × rate − progressive deduction.
| Taxable base | Rate | Progressive deduction |
|---|---|---|
| Up to ₩14M | 6% | ₩0 |
| ₩14M – ₩50M | 15% | ₩1.26M |
| ₩50M – ₩88M | 24% | ₩5.76M |
| ₩88M – ₩150M | 35% | ₩15.44M |
| ₩150M – ₩300M | 38% | ₩19.94M |
| ₩300M – ₩500M | 40% | ₩25.94M |
| ₩500M – ₩1B | 42% | ₩35.94M |
| Over ₩1B | 45% | ₩65.94M |
A note on source tier. This is the same eight-bracket table we transcribed from National Tax Service documents in our comprehensive income tax article, where we also re-ran the NTS's own worked examples in code to check it. The NTS site would not open during this update, so we could not re-verify it today (see below).
The percentages in the rate table are band rates. What you actually pay is always lower.
Where does a refund turn into a bill
The 3.3% is not a tax rate — it is money held back in advance. Which means you can work out where “getting some back” becomes “owing more.”
The expense rate in this calculation is not a single number. Article 4 of the NTS notice tells personal-service earners (business code 940***) to apply the simplified base rate to income up to ₩40M and the excess rate above it. Code 940909 (other self-employment) is 64.1% base / 49.7% excess.
The worked example printed in the notice (book seller, code 940908, ₩45M a year):
{₩40,000k − (₩40,000k × 75.0%)} + {₩5,000k − (₩5,000k × 65.0%)} = ₩11,750k
| Annual income | Expenses | Net income | Taxable base | Tax incl. local | 3.3% withheld | Difference |
|---|---|---|---|---|---|---|
| ₩20,000,000 | ₩12.82M | ₩7.18M | ₩5.68M | ₩374,880 | ₩660,000 | ₩285,120 refund |
| ₩30,000,000 | ₩19.23M | ₩10.77M | ₩9.27M | ₩611,820 | ₩990,000 | ₩378,180 refund |
| ₩40,000,000 | ₩25.64M | ₩14.36M | ₩12.86M | ₩848,760 | ₩1,320,000 | ₩471,240 refund (peak) |
| ₩50,000,000 | ₩30.61M | ₩19.39M | ₩17.89M | ₩1,565,850 | ₩1,650,000 | ₩84,150 refund |
| ₩51,683,168 | ₩31.45M | ₩20.24M | ₩18.74M | ₩1,705,545 | ₩1,705,545 | zero (crossover) |
| ₩80,000,000 | ₩45.52M | ₩34.48M | ₩32.98M | ₩4,055,700 | ₩2,640,000 | ₩1,415,700 owed |
The refund does not keep growing with income. It peaks at ₩471,240 on income of ₩40M and drops steeply above that (our calculation). The peak sits exactly at ₩40M because that is where the expense rate steps down from 64.1% to 49.7%.
And at ₩51,683,168 the refund reaches zero; above it, May means writing a cheque (our calculation). “They withheld 3.3%, so I'll get money back in May” is not always true.
The assumptions, stated plainly. This uses business code 940909 and only the ₩1.5M personal deduction. A different code carries different rates — instructors and tutors (940903) are 61.7% / 46.4%, insurance agents (940906) 77.6% / 68.6%. Dependants, pension contributions and other deductions all push the crossover higher.
How much more pension do freelancers pay
Alongside income tax, social insurance is the other large bill — and this is where freelancers diverge. The National Pension Service page states it directly: workplace members' contributions are borne “half each by the member and the workplace employer,” while regional, voluntary and voluntary-continued members “bear the contribution in full.”
| Item | Salaried | Freelance (regional member) | Difference |
|---|---|---|---|
| Pension rate | 9.5% | 9.5% | same |
| What you pay | 4.75% | 9.5% | exactly double |
| Standard monthly income | ₩410,000 – ₩6,590,000 (July 2026 – June 2027) | same | |
| Employment insurance | 0.9% | generally not enrolled | — |
The rate is not different — there is simply nobody to split it with. At the ₩6.59M ceiling that is ₩626,050 a month alone, against the ₩313,025 a salaried worker pays on the same income (our calculation). The structure is in our national pension estimator.
Health insurance is deliberately absent from that table. Regional health premiums are assessed on an income-and-property points system rather than a rate applied to income, and the insurer's page is blocked, so we could not read the formula. Writing “double the 3.595% employee rate” would risk being wrong, so we left it out.
Same rate, double the burden — for one reason.
Which expense method applies to me
- Simplified rate — a fixed share of income counted as expenses without bookkeeping. For personal services the figure varies by business code, and there are two of them: 940909 (other self-employment) 64.1% / 49.7%, 940903 (instructors, tutors) 61.7% / 46.4%, 940906 (insurance agents) 77.6% / 68.6%. The first is the base rate up to ₩40M, the second the excess rate above it.
- Standard rate — applies once income exceeds the threshold. 940909 is 13.4%, 940903 14.9%, 940906 26.5%. Far less is recognised as expense, so tax rises sharply.
- The threshold. The simplified rate is available when prior-year income falls below the limit — ₩24M for the “associations, repair and other personal services” group, but ₩36M for personal services within it (footnote in the notice).
- Actual expenses (bookkeeping) — better when real spending exceeds the rate. You need documentation (tax invoices, card records).
Questions that remain
Can I skip filing if my income was small?
Business income with 3.3% withheld must be reported regardless of amount. Smaller incomes often produce refunds, so filing usually pays.
I have an employer plus freelance income.
They're combined for filing, which can push you into a higher bracket. This calculator handles business income alone, so a combined filing may owe more.
When and where do I file?
May 1–31 each year via Hometax or the Sontax app. If you receive a pre-filled notice, it can take just a few taps.
Is local income tax separate?
It's 10% of the computed tax and is already included in the result above.
Do social insurance premiums reduce my tax?
National Pension contributions come off income under Article 51-3 of the Income Tax Act, which we read in the original in July 2026 (see above). The article sets no cap, so the full amount paid is deducted. Contributions differ from person to person, so the calculator still does not apply it — which means the true crossover sits higher than the table above.
They withheld 3.3% — why do I owe more?
Because 3.3% is a flat share of gross receipts, while actual tax is progressive and applies to the base left after expenses and deductions. Above a certain income the progressive side overtakes the 3.3% — in our calculation, at ₩51.68 million. Where the 3.3% itself comes from is now confirmed: Article 129 of the Income Tax Act (3%) and Article 103-13 of the Local Tax Act (10% of that income tax).
The 3.3% isn't your tax — it's money paid in advance. May is when it's settled either way.
Where does the 3.3% come from
This article has carried “the statutory basis for deducting pension contributions” and “the statutory basis for the 3.3% withholding” in the unverified list below for a long time. In July 2026 we opened the Income Tax Act and the Local Tax Act at Korea's National Law Information Centre and filled both.
3.3% — it is two articles multiplied together
The number “3.3%” appears in no statute. It only emerges when two articles from two different Acts are combined.
Income Tax Act, Article 129(1)3 — for business income subject to withholding, 3 per cent
Local Tax Act, Article 103-13(1) — an amount equal to 10 per cent of the income tax withheld shall be specially collected as individual local income tax
Applying them: 3% + (3% × 10%) = 3% + 0.3% = 3.3% (our own arithmetic). The familiar gloss — “3% income tax plus 0.3% local” — turns out to be exactly what the text says.
The same structure sits under every familiar withholding number. The rate actually taken is the statutory rate × 1.1 (our own arithmetic) —
business income 3 → 3.3% · dividends and interest 14 → 15.4% · other income 20 → 22% · non-business loans 25 → 27.5% · service charges 5 → 5.5%
It also explains why the trailing 0.3% is missing from NTS tables — that portion is a local tax, not a national one, so it does not belong in a National Tax Service schedule.
Article 103-13(2) sets payment “by the 10th day of the following month,” so the withholding side runs on the same calendar as the national tax.
Pension contributions — the whole amount, and it comes off income
Income Tax Act, Article 51-3(1) — where a resident with global income has paid contributions or personal charges under the public pension-related Acts (hereinafter “pension premiums”), the pension premiums paid in that taxable period shall be deducted from the global income amount for that period.
The article sets no cap. Whatever was paid comes off. Someone paying ₩5 million a year as a regional National Pension subscriber reduces their income amount by that full figure.
Paragraph 3 does add a ceiling of a different kind. Where the personal deduction, this pension deduction, the reverse-mortgage interest deduction, the special income deductions and deductions under the Restriction of Special Taxation Act together exceed the global income amount, the excess is treated as pension premium deduction not taken. In a very low-income year, you may not get the full amount off.
And because it is “deducted from the global income amount,” this is an income deduction, not a tax credit — the saving is the amount paid × your marginal rate, not the amount paid.
The calculator still does not apply it. The statutory basis is now confirmed, but applying it needs each person's actual contributions, which cannot be hard-coded. Real filings do apply it, so the crossover in the table above sits lower than the real one — more deductions mean less tax, which pushes the point where progressive tax overtakes the 3.3% further out.
Sources
- National Tax Service — primary source — “Standard and Simplified Expense Rates for 2024 income” (NTS Notice 2025-6, effective 28 March 2025). Source of business code 940909 other self-employment — simplified base 64.1 / excess 49.7, standard 13.4, 940903 instructors 61.7 / 46.4 / 14.9, 940906 insurance agents 77.6 / 68.6 / 26.5, Article 4 (“for personal-service earners (940***), income up to KRW 40 million takes the base rate and the excess takes the excess rate”), the worked example for book sellers (940908), and the note that personal services within repair and other personal services use a KRW 36 million prior-year threshold.
- Korea Ministry of Government Legislation, National Law Information Centre — Income Tax Act, Article 51-3 (pension premium deduction), in force 1 January 2026, Act No. 21221. Source for deduction from the global income amount, the absence of any cap, and paragraph 3's treatment of the excess.
- National Law Information Centre — Income Tax Act, Article 129 (withholding rates). Source for the 3 per cent on business income subject to withholding.
- National Law Information Centre — Local Tax Act, Article 103-13 (specially collected amount). Source for “10 per cent of the income tax withheld” and the 10th-of-the-following-month deadline — where the remaining 0.3% of the 3.3% comes from.
- National Pension Service — agency source — “Contribution — amount and rate” (checked 30 July 2026). Source for the 9.5% rate, the ₩410,000–₩6,590,000 band, and the statement that workplace members split it while regional, voluntary and voluntary-continued members bear it in full.
- Ministry of Health and Welfare — agency source — “2026 health insurance rate set at 7.19%” (28 August 2025). That is the workplace-subscriber rate; regional premiums use a different formula (see below).
- Rate table — the same eight-bracket table our comprehensive income tax article transcribed from National Tax Service documents and verified by re-running the NTS's own worked examples in code. We did not reopen the NTS site during this update.
- Our own calculation. Every net income, taxable base and tax figure above, the ₩471,240 peak refund at ₩40,000,000, the ₩51,683,168 crossover, and the freelance pension being exactly double are ours, not published figures. Assumptions: business code 940909 — 64.1% base / 49.7% excess, ₩1.5M personal deduction only, 10% local income tax included.
Where to check further
- Your own business code. Expense rates are set per business code, and your contract may not fall under 940909 — check it on Hometax's expense-rate lookup or on your May filing notice, then enter the figure under “manual.”
- The health insurance formula for regional subscribers. The insurance service's page is blocked by robots, so health insurance is left out of the freelancer cost comparison — the National Health Insurance Service (1577-1000) and its app's premium simulator give your own figure.
- The provision behind the 10% local income tax on the final return. Art. 103-13 covers withholding, so the final-return basis is a different provision we did not locate; the calculator includes 10% as is conventional — the local income tax notes on the Hometax filing screen show the basis applied.
As of July 2026. The pension statements come from the National Pension Service's own page; the tax figures and crossover points are our arithmetic. The expense rates are the National Tax Service notice verbatim. This is a general-information estimate, not tax advice. Actual tax varies with income types, deductions, credits and business category — confirm with Hometax or a tax professional. Hourly work is in our part-time pay calculator, salaried take-home in the net salary calculator, and reclaiming missed deductions in the amended return article.
