Korean income tax is not charged on gross pay. The wage income deduction comes off first: 70% of the first 5 million won, then 40%, 15%, 5% and 2% as pay rises, capped at 20 million won. We read Article 47 of the Income Tax Act in the original and worked out the deduction at several pay levels.
1. It is the first deduction from total pay. Every resident with wage income gets it; no claim is needed (Article 47(1)).
2. Five bands, a 20 million won cap. It starts at 70% up to 5 million won and falls to 2% above 100 million won. If the result exceeds 20 million won, 20 million won is deducted.
3. Daily workers get 150,000 won a day. That replaces the table (Article 47(2)).
The table — Article 47(1)
| Total pay | Deduction (statute) | At the top of the band (ours) |
|---|---|---|
| 5 million won or less | 70/100 of total pay | 5 million → 3.5 million |
| Over 5 million to 15 million | 3.5 million + 40/100 of the excess over 5 million | 15 million → 7.5 million |
| Over 15 million to 45 million | 7.5 million + 15/100 of the excess over 15 million | 45 million → 12 million |
| Over 45 million to 100 million | 12 million + 5/100 of the excess over 45 million | 100 million → 14.75 million |
| Over 100 million | 14.75 million + 2/100 of the excess over 100 million | Cap of 20 million at 362.5 million |
Each band’s opening figure (3.5, 7.5, 12 and 14.75 million won) equals the deduction at the top of the band before, so the bands join without a jump. The cap is reached at 100 million + (20 million − 14.75 million) ÷ 0.02 = 362.5 million won (our arithmetic).
By pay level — our arithmetic
| Total pay | Wage income deduction | Wage income amount |
|---|---|---|
| 3 million won | 2.1 million | 0.9 million |
| 10 million won | 5.5 million | 4.5 million |
| 30 million won | 9.75 million | 20.25 million |
| 40 million won | 11.25 million | 28.75 million |
| 50 million won | 12.25 million | 37.75 million |
| 80 million won | 13.75 million | 66.25 million |
| 120 million won | 15.15 million | 104.85 million |
With total pay of 40 million won, 7.5 million + (40 million − 15 million) × 0.15 = 11.25 million won comes off, and personal and other deductions are then taken from the remaining 28.75 million. Our year-end tax calculator shows the steps that follow.
The other paragraphs — Article 47(2), (3) and (5)
- Daily workers — notwithstanding paragraph (1), the deduction is 150,000 won a day ((2)).
- If total pay is less than the deduction — total pay itself is the deduction ((3)). We read this as: the deduction cannot push the result below zero.
- Pay from two or more employers — the sum of the wage income is treated as total pay and the deduction is calculated once. Daily workers are excluded ((5)).
Someone paid 20 million won by each of two companies does not get the 20-million deduction twice; the deduction is 11.25 million won on 40 million. Calculated separately it would be 8.25 million each, 16.5 million in all — 5.25 million more (our arithmetic).
Checklist
- ☐ Check that total pay excludes non-taxable income
- ☐ Work out your band (up to 45 million won: 7.5 million + 15% of the excess)
- ☐ If you changed jobs during the year, add the pay together and calculate once
Questions that remain
Is this the same as the wage income tax credit?
No. The wage income deduction comes off total pay before the rates apply; the wage income tax credit comes off the calculated tax after — see wage income tax credit.
Is total pay the same as gross salary?
No. It is salary less non-taxable income — see non-taxable wage allowances.
Sources
- Income Tax Act [Act No. 21221, partially amended 23 December 2025] — original text (checked 2 October 2026). Article 47(1) (70/100, 3.5 million, 40/100, 7.5 million, 15/100, 12 million, 5/100, 14.75 million, 2/100, the 20 million cap), (2) (150,000 won a day), (3) and (5).
- Our own working. The deductions and wage income amounts by pay level, the 362.5 million figure, and the 8.25, 16.5 and 5.25 million in the two-employer example are ours.
Where to check further
- The whole calculation — year-end tax calculator.
- After the rates — wage income tax credit.
Written on 2 October 2026. The provisions are as published by the Korea Law Information Center; the arithmetic and examples are ours.
