Korea's year-end tax settlement looks like a January job, but half the result is already fixed on 31 December. What you spent on cards, what you paid into a pension account, when you registered a marriage — none of it can be changed once the year turns. January is for paperwork, February is when your employer settles, and anything missed can be reclaimed in May or within five years after. We read the statute behind each deduction in a separate guide; 30 of them are linked here. This page puts them on a calendar: what to do, and by when.
1. Some things close on 31 December. Card spending, pension savings and IRP contributions, donations and housing subscription deposits all count only within the year. The 500,000 won marriage credit needs the marriage registered by 31 December 2026.
2. January is for what the tax feed leaves out. Each dependant is worth 1.5 million won off income; on 600,000 won a month of rent and 50 million won of pay, 1,224,000 won comes off the tax.
3. Missing something is not final. There is the May return, and an amended claim can go back five years.
First, how the tax is worked out
The rates do not apply to gross pay. Two amounts come off your income first, the rates apply, and then credits come off the tax itself. That is why a 1 million won deduction returns only your tax rate, while a 1 million won credit returns all of it.
| Step | The figure that matters | Guide |
|---|---|---|
| Tax-free pay is out from the start | Meals (where none are provided) and childcare allowances up to 200,000 won a month; jobseeker and parental leave benefits are left out of total pay | Non-taxable allowances · benefits and tax |
| Wage income deduction | 70% of the first 5 million won, then 40, 15, 5 and 2%, capped at 20 million | Wage income deduction |
| Social insurance premiums | National pension, health and employment insurance premiums deducted in full | Social insurance deductions |
| Wage income tax credit | 55% of tax up to 1.3 million won, capped by pay; the standard credit is 130,000 won if you claim no special deductions | Wage income tax credit |
| Refund or bill? | The difference between the final tax and what was withheld during the year | Year-end tax calculator |
1. Done by 31 December
Everything in this table depends on money spent, paid in or registered within the year. Finding out in January changes nothing.
| Item | The figure that matters | Guide |
|---|---|---|
| Card spending | Closes on 31 December. The popular “fill the threshold with a credit card” tactic is worth exactly zero in tax when you run the formula | Card deduction calculator · the credit-card rule |
| Pension savings and IRP | Two caps, and you need tax to owe for the credit to land | Pension savings and IRP calculator · 2026 guide |
| Housing subscription deposits | 40% of up to 3 million won a year comes off income — a 1.2 million won deduction hands you 198,000 won | Housing subscription deduction |
| Donations | 15%, 30% above 10 million won; a 100,000 won hometown donation earns 90,909 won | Donation credit · hometown donation |
| Registering a marriage | 500,000 won once, for a marriage registered by 31 December 2026; 1,000,000 won if both spouses claim | Marriage tax credit |
| Joining an SME | Young people hired by 31 December 2026: 90% off income tax for 5 years, up to 2 million won a year | SME employee reduction |
| Registering your address where you rent | The gateway to the monthly rent credit; rent is now counted by days rented, not months paid | Monthly rent credit |
2. January — the tax feed, and what it leaves out
The simplified data from the tax office is a starting point, not the whole return. Glasses and hearing aids are missing because of a proviso in the Decree, not the tax office, and only you can decide whose return each dependant goes on.
| Item | The figure that matters | Guide |
|---|---|---|
| Deductions the feed leaves out | The reason is in the Decree — these need receipts of your own | What the tax feed leaves out |
| Dependants | 1.5 million won each; with wage income only, a dependant passes up to 5 million won of total pay | Dependent deduction |
| Children | Aged 13+: 250,000 won for one, 550,000 for two, 950,000 for three; 300,000 to 700,000 in the year of birth | Child tax credit · compared with the child credit |
| A family member with a disability | Basic deduction with no age limit, an extra 2 million won, medical costs outside the 7 million cap | Disability tax breaks |
| Medical costs | The 3% floor applies paragraph by paragraph; the 7 million won cap sits on paragraph 1 only; fertility treatment is 30% | Medical expense calculator · medical and education credits |
| Insurance premiums | 12% for protection cover, 15% for disability-dedicated, each up to 1 million won a year | Insurance premium credit |
| Monthly rent | 600,000 won a month on 50 million won of pay: 1,224,000 won; there are four thresholds | Monthly rent credit calculator |
| Housing loans and savings | Rent loan and subscription savings share 4 million won, inside the mortgage interest cap | Housing fund deduction |
3. February — your employer settles
| Situation | The figure that matters | Guide |
|---|---|---|
| You owe more | Extra tax over 100,000 won can be split across February to April pay | Year-end settlement rules |
| Less withheld each month | Choose 80% or 120% of the table amount; the year's tax is the same. On 150,000 won a month, 80% withholds 360,000 won less a year | Choosing 80% or 120% |
| You left during the year | Settled with your final pay; only your own deduction without a declaration | Mid-year leavers |
4. Missed something — May, and five years after
| Situation | The figure that matters | Guide |
|---|---|---|
| You left and found no new job that year | The May return is the window for missed deductions | Mid-year leavers |
| A deduction was left out | An amended claim reaches back five years | Amended returns |
| A refund was never collected | After five years it goes to the state, and a notice from the tax office does not stop the clock | Unclaimed tax refunds |
Dates to note
| Date | What to do |
|---|---|
| 31 December 2026 | Card spending, pension accounts, donations and subscription deposits close; deadline for registering a marriage for the marriage credit and for joining an SME for the reduction |
| January 2027 | Check the tax feed, gather receipts it leaves out, settle dependants, hand in the deduction form |
| February 2027 | Employer settles — refund or extra tax (split possible above 100,000 won) |
| May 2027 | Global income tax return — the first chance to add what the settlement missed |
Three situations
It is December and you have done nothing. There is no point spending more on a card to reach the threshold — the formula says zero. Look instead at things that are credited as you pay them in, such as pension savings and donations, and if a wedding is coming, check the registration date.
It is January and the tax feed is open. Decide whose return each dependant goes on first (two siblings cannot both claim the same parent), and compare whose return clears the 3% medical floor.
You find a deduction you missed last year. Even after the May return, an amended claim can recover it for up to five years.
Checklist
- ☐ Before 31 December: pension and IRP contributions, donations, subscription deposits
- ☐ Dates of marriage registration and address registration
- ☐ Dependants' income (5 million won of total pay if wages only) and ages
- ☐ Receipts the tax feed leaves out (glasses, hearing aids and so on)
- ☐ Rental contract and transfer records
- ☐ Extra tax over 100,000 won in February: ask to split it
Questions that remain
What is the difference between a deduction and a credit?
A deduction comes off income before the rates, so it returns only your rate; a credit comes off the tax itself. A 1.2 million won housing subscription deduction hands you 198,000 won, while a 250,000 won child credit is 250,000 won.
If I owe little tax, do I get every credit?
No. Credits come off calculated tax, so there has to be tax to take them from — which is why the pension calculator says you need tax to owe.
Does this apply to foreign workers?
These guides read the statutes for resident wage earners in general. Special rules that apply only to foreign workers are outside them.
Sources
- Our guides linked above — each cites the Income Tax Act, the Restriction of Special Taxation Act or the Decree it reads, with the date checked. The figures here are copied from those guides.
- Not read. Special rules for foreign workers; the National Tax Service's January 2027 schedule (not yet announced).
- What we added. The calendar order and the three situations.
Where to check further
- Hometax and your employer's payroll team — for your own deductions.
Written on 26 October 2026. The figures are from the linked guides; the grouping is ours.
