Korea's year-end tax settlement (연말정산) happens in February, but the result is mostly locked in before December — once you've spent the year, there's little left to adjust. Whether you get a "13th-month bonus" refund or owe money depends on a few things you set up before year-end.
Here's what to check from the second half of the year. Exact limits and rates change annually, so read this for direction.
First: your card spending "ratio"
The card deduction only counts spending above 25% of your total salary, and the rate depends on the payment type:
- Credit card 15% · debit/cash receipt 30% · traditional market & transit ~40%
- So fill the 25% threshold with a rewards credit card, then shift spending beyond that to debit/cash for the higher deduction.
Check how much of your salary you've spent via the Hometax "year-end settlement preview."
Fill tax credits that cut tax directly
- Pension savings / IRP — the strongest lever. Up to ₩9M combined returns 13.2–16.5% as a tax credit (see the pension & IRP guide). Deposit by Dec 31 to count for the year.
- Monthly rent credit — qualifying employees without a home can credit part of rent paid; keep the contract and transfer records.
- Donations — confirm the recipient qualifies.
Use the Hometax "preview" to pull your card spending so far and simulate how much more you'd get back by spending a certain way in the remaining months.
Dual-income & dependents
- Dual-income couples — loading card spending onto the lower earner can clear the 25% threshold more easily; dependent deductions usually help the higher earner more.
- Dependents — don't miss eligible family members, and gather their medical and education expenses too.
FAQ
Isn't it automatic if I only have salary?
Basic data loads automatically, but rent, donations and pension savings you must claim yourself — miss them and you get less back.
What helps most right now?
If you have spare funds, maxing pension/IRP has the biggest impact, then adjusting your card mix.
What about deductions I missed last year?
You can reclaim them via an amended return within 5 years.
Year-end settlement is a year-round task, not a February event. Checking your card ratio and pension limit before December changes the outcome.
This is general information, not tax advice. Deduction limits, rates and rules change yearly — confirm on Hometax or with a tax professional.
