It is called "the thirteenth pay cheque", but about half the time it is a thirteenth bill. One thing decides which: if the year's tax comes to less than what was already withheld, you get a refund; more, and you owe.
1. The rates apply to the tax base, not to gross pay. The earned income relief and the personal allowances come off first.
2. The wage credit has a separate cap. It falls with gross pay — and earning 320,000 won more than 70m costs you 160,000 won of credit.
3. The child credit now starts at 13, not 8 (art. 59-2, amended 21 April 2026).
4. Enter nothing and 130,000 won appears anyway — the standard credit (art. 59-4(9)1).
Enter gross pay, household size and whatever deductions you know, and it gives the tax determined and the refund or balance due.
It follows the order the statute sets. Gross pay less the earned income relief (art. 47 — capped at 20m won), less the basic allowance of 1.5m won per person (art. 50) and any other deductions, gives the tax base. The basic rates (art. 55) applied to it give the gross tax, from which come the wage credit (art. 59 — 55% up to 1.3m won of tax, then 715,000 won plus 30% of the excess, subject to a separate cap set by gross pay), the child credit (art. 59-2 — aged 13 or over: 250,000 won for one, 550,000 for two, then 400,000 each), and any other credits. Enter no other credits and the 130,000 won standard credit applies instead (art. 59-4(9)1). Local income tax of 10% is charged on top. Additional allowances (elderly, disability, single parent), pension contributions, special deductions and the small-business employment relief must be entered in the "other" fields yourself. An estimate.
The rates do not apply to gross pay
This is the most common confusion. 15% is not charged on 40m won of pay. Two subtractions come first.
On 40m won, the earned income relief alone is 11.25m won. Take off the basic allowance of 1.5m won and 3.6m won of other deductions and the tax base is 23.65m won — under 60% of gross pay.
The earned income relief — article 47
This table is an image inside the article and does not come out as text. We read it from the alt attribute.
| Gross pay | Relief |
|---|---|
| up to 5m won | 70% of gross pay |
| 5m won – 15m won | 3.5m won + 40% of the excess |
| 15m won – 45m won | 7.5m won + 15% of the excess |
| 45m won – 100m won | 12m won + 5% of the excess |
| over 100m won | 14.75m won + 2% of the excess |
| Income Tax Act art. 47(1). Middle ranges read "over the first figure, up to the second". The proviso caps it at 20m won, so it stops growing once gross pay passes 362.5m won. | |
The rate falls 70% → 40% → 15% → 5% → 2%. The more you earn, the less relief the next won attracts.
The wage credit has a separate cap
Article 59 has two paragraphs, and most explanations stop at the first.
Paragraph (1) — the calculation: 55% of gross tax up to 1.3m won, then 715,000 won plus 30% of the excess (that table is an image inside the article too)
Paragraph (2) — the cap: "where the credit exceeds the following amounts, the excess shall be treated as nil"
| Gross pay | Cap on the credit |
|---|---|
| up to 33m won | 740,000 won |
| 33m – 70m won | 740,000 − 0.8% of the excess floor of 660,000 |
| 70m – 120m won | 660,000 − half the excess floor of 500,000 |
| over 120m won | 500,000 − half the excess floor of 200,000 |
| Income Tax Act art. 59(2) [amended 31 December 2022]. This table is in the running text, not an image. | |
The bands where the taper is half the excess are the sharp ones. At 70m won of pay the cap is 660,000 won; earn 320,000 won more and it is 500,000 won — 160,000 won gone. The 120m won line behaves the same: 500,000 won falls to 200,000 won within 600,000 won.
Is 320,000 won of extra pay a net loss? No — you earn 320,000 and lose 160,000 won of credit, so something remains. But there are stretches where almost nothing remains after tax. Worth a look if you have any say over when a bonus lands.
The child credit moved to age 13
Article 59-2 was amended on 21 April 2026: the age threshold went from 8 to 13, and the amounts went up.
| Children aged 13+ | Credit |
|---|---|
| 1 | 250,000 won |
| 2 | 550,000 won |
| 3 | 550,000 won + 400,000 = 950,000 won |
| 4 | 950,000 won + 400,000 = 1.35m won |
| Income Tax Act art. 59-2(1). Grandchildren count too, and for a birth or adoption in the year paragraph (3) adds 300,000 for a first child, 500,000 for a second and 700,000 from the third. | |
A great deal of published material still says 8, and still quotes the old 150,000 and 350,000 won. A child under 13 no longer attracts the child credit — though the basic allowance of 1.5m won still applies up to age 20 (art. 50(1)3(b)). They are different provisions.
Questions that remain
What if I enter no credits at all?
Article 59-4(9)1 gives the standard credit of 130,000 won. The condition is that you have not claimed the special deductions, the special credits or the rent credit — so claiming any one of them removes the 130,000 won. Where your credits come to less than 130,000 won, you are better off not claiming them.
Is local income tax separate?
Yes. A further 10% of the tax determined is charged as local income tax. On the worked example's 1.47m won that is 147,350 won. The calculator's "tax determined" does not include it.
If the credits exceed the gross tax, is the difference refunded?
No. Credits above the gross tax are treated as nil — the tax determined stops at zero and does not go negative. Everything already withheld comes back, but no more than that. (The earned income tax credit is a separate scheme.)
What does this calculator leave out?
The additional allowances (1m won for the elderly, 2m for disability, 500,000 for a qualifying woman, 1m for a single parent — art. 51), pension contributions (art. 51-3), the special deductions (art. 52), the medical, education, insurance and donation credits (art. 59-4), the pension account credit (art. 59-3), and the small-business employment relief. Enter them in the two "other" fields and they carry straight through.
Where do I find my gross pay?
It is line 16 of the withholding receipt. It can differ from your headline salary — tax-exempt items such as meal and car allowances are excluded. It is also visible on Hometax under the submitted payment statements.
Sources
Income Tax Act [in force 1 July 2026] [Act No. 21221] — art. 47 (earned income relief), art. 50 (basic allowance), art. 51 (additional allowances), art. 55 (rates), art. 59 (wage credit), art. 59-2 (child credit), art. 59-4(9) (standard credit).
Three of the tables are published as images inside the articles — the earned income relief in art. 47, the rates in art. 55, and the wage credit in art. 59(1). All three were read from the alt attribute. The last row of the art. 55 table was not complete even in the alt — it ended at "45 per cent of the amount exceeding 1bn won" with the base figure missing — so we carried the calculation forward from the band above.
The script was checked against the same model across 3,456 combinations — 16 pay figures x 3 household sizes x 4 child counts x 3 deduction figures x 2 credit figures x 3 withholding figures, all matching, with the 33m, 70m and 120m cap thresholds tested one won either side.
Where to check
What to do before December is in the year-end preparation guide, and the 25% card threshold is in the card deduction calculator. Dependants are covered in personal allowances, rent in the rent credit calculator, and pension accounts in the pension and IRP calculator. Medical bills have their own calculator, whose figure goes into the "other credits" field here. If business income is in the mix, see global income tax.
