The income tax taken from a Korean pay slip each month is the amount shown in the “simplified wage income withholding table.” Few people know that employees may ask for 80% or 120% of that amount instead. The option sits in article 194 of the Income Tax Act’s Enforcement Decree. It does not change the year’s total tax: it decides whether you pay less now and more in February, or more now and get it back in February. We read the articles as written.
1. Three choices: 80%, 100% or 120%. The default is the amount in the table (100%); on the employee’s request tax may be withheld at 120/100 or 80/100 (Decree art. 194(1)).
2. The year’s tax is the same. Year-end settlement recalculates the year and deducts what was withheld, then collects more or refunds (Act art. 137). Choosing 80% raises monthly take-home pay but shrinks the February refund or enlarges the extra payment.
3. Extra tax over 100,000 won can be split. The employer may withhold it across February to April pay (Act art. 137(4)).
The article — Decree art. 194
Paragraph 1 … tax on wage income shall be withheld based on the amount in the relevant column of the simplified wage income withholding table in Annex 2. However, where an employee applies for withholding at 120/100 or 80/100 of that amount, tax may be withheld accordingly.
Paragraph 3 The employee … shall submit an application to adjust the withholding amount to the withholding agent, or state the withholding ratio in the income and tax credit declaration …. The changed ratio applies from wages paid after the date of submission.
Paragraph 4 … the changed ratio applies to wages paid from the date of the change until the end of the tax year.
There are two ways to apply: hand your employer an application to adjust the withholding amount, or write the ratio on the income and tax credit declaration filed for year-end settlement. Months already paid are not reworked; the change applies from pay after the submission date. Switching again to another ratio works the same way (para. 3 item 2).
What changes — an example of 150,000 won a month
Take someone whose table amount is 150,000 won a month (the real figure comes from Annex 2 by pay and number of dependants).
| Choice | Withheld monthly | Over the year (12 months) |
|---|---|---|
| 80% | 120,000 won | 1,440,000 won — 360,000 won less than 100% |
| 100% (default) | 150,000 won | 1,800,000 won |
| 120% | 180,000 won | 2,160,000 won — 360,000 won more than 100% |
The amounts and arithmetic are our example. Local income tax is added separately and left out of the table. We assumed the same ratio all year.
If year-end settlement puts this person’s tax for the year at, say, 1,700,000 won, then at 100% they get 100,000 won back; at 80%, with only 1,440,000 won withheld, they pay 260,000 won more; at 120% they get 460,000 won back. In all three cases the year’s tax is 1,700,000 won — only the timing differs (our arithmetic).
The settlement side — Act art. 137
- Paragraph 1 — when paying February wages of the following year (or the month of leaving, for leavers), the employer takes the year’s calculated tax, deducts tax withheld under article 134(1) and credits, and withholds the extra.
- Paragraph 2 — if tax withheld plus credits exceeds the calculated tax, the excess is refunded.
- Paragraph 4 — if the extra tax exceeds 100,000 won, it may be withheld in parts up to April pay, starting with February.
Which suits whom — our summary
| Situation | Ratio to consider | Why |
|---|---|---|
| A large refund every year | 80% | Less withheld means more in hand each month |
| An extra payment every February | 120% | Withholding more now eases February |
| Paid by two or more employers | 120% | The secondary workplace withholds as if only your own basic deduction applied (art. 194(2)) |
This table is our summary, not the statute. Ignoring interest, the year’s total is the same for all three.
Checklist
- ☐ Last year’s settlement — a refund or an extra payment?
- ☐ To change the ratio, submit the adjustment application to your employer
- ☐ It applies to pay after the submission date
- ☐ If February’s extra tax exceeds 100,000 won, ask whether it can be spread to April
Questions that remain
Does choosing 80% cut my tax?
No. Article 137 recalculates the year at settlement, so the total stays the same; what you do not pay monthly comes back as a smaller refund or a larger February payment.
Does the choice carry over to next year?
Article 194(4) applies the changed ratio “until the end of the tax year.” We did not settle from this article alone how it carries into the next year, so check with your payroll team.
Sources
- Enforcement Decree of the Income Tax Act [in force 1 Oct 2026] [Presidential Decree No. 36737] — original text (checked 1 October 2026). Article 194(1) (120/100 and 80/100), (2) (secondary workplace), (3) (adjustment application, pay after submission) and (4) (until the end of the tax year).
- Income Tax Act [in force 1 Jul 2026] [Act No. 21221] — original text. Article 134 (withholding by the table) and article 137 (settlement, refunds, splitting over 100,000 won from February to April).
- Our own working. The 150,000 won example and the refund or extra payment against 1,700,000 won of tax are our arithmetic.
Where to check further
- Your table amount — the simplified withholding table lookup on the National Tax Service Hometax site.
- Preparing for settlement — year-end tax settlement prep.
Written on 1 October 2026. Articles are from the National Law Information Center; the tables and examples are ours.
