Every May is comprehensive income tax filing month in South Korea. If you're a freelancer, sole proprietor, or side hustler (not just a regular employee), this is a mandatory process. With proper preparation, you can save hundreds of thousands to millions of won in taxes.
This guide covers everything about the 2026 comprehensive income tax: who must file, tax brackets, filing methods for freelancers/business owners/side hustlers, 7 tax-saving strategies, and tax liability simulations.
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Income Tax Calculator
Calculate your estimated comprehensive income tax liability
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1. What Is Comprehensive Income Tax?
Comprehensive Income Tax (종합소득세) is a tax levied on an individual's total annual income (January 1 to December 31). While regular employees settle their taxes through year-end settlement, those with other income sources must file and pay during May 1-31 each year.
Income types subject to filing:
| Income Type | Examples | Filing Threshold |
|---|
| Business Income | Self-employment, online shops, delivery | All business income |
| Freelance Income | Design, development, translation, lectures | All 3.3% withholding income |
| Rental Income | Residential/commercial property rental | Over 20M KRW/year (residential) |
| Interest Income | Bank deposits, bonds | Over 20M KRW/year |
| Dividend Income | Stock dividends | Over 20M KRW/year |
| Other Income | Manuscript fees, royalties, lecture fees | Over 3M KRW/year (after expenses) |
| Employment + Other | Salary + freelance side work | Any additional income beyond salary |
Filing period: May 1 (Fri) to May 31 (Sun), 2026. Those subject to Faithful Filing Confirmation get an extension to June 30. Late filing incurs a 20% non-filing penalty and 0.022%/day late payment penalty.
2. 2026 Tax Brackets
Korea's comprehensive income tax uses a progressive tax rate system. Higher income faces higher rates, but only the portion within each bracket is taxed at that rate.
| Taxable Income | Rate | Progressive Deduction |
|---|
| Up to 14M KRW | 6% | — |
| 14M ~ 50M KRW | 15% | 1.26M KRW |
| 50M ~ 88M KRW | 24% | 5.76M KRW |
| 88M ~ 150M KRW | 35% | 15.44M KRW |
| 150M ~ 300M KRW | 38% | 19.94M KRW |
| 300M ~ 500M KRW | 40% | 25.94M KRW |
| 500M ~ 1B KRW | 42% | 35.94M KRW |
| Over 1B KRW | 45% | 65.94M KRW |
For example, with a taxable income of 50M KRW: 50M x 15% - 1.26M = 6.24M KRW in calculated tax. Add local income tax (10%) for a total of 6.864M KRW.
3. Filing for Freelancers
Freelancers (personal service providers) have 3.3% (3% income tax + 0.3% local tax) withheld at source. However, this is merely a prepayment; the exact tax is settled through the May comprehensive income tax filing.
Freelancer tax settlement process:
1
Verify Total Revenue
Sum all freelance income for the year. Check via 'Withholding Tax Receipts' on HomeTax.
2
Calculate Necessary Expenses
Apply the simple expense ratio or standard expense ratio. If you keep books, deduct actual expenses.
3
Determine Income Amount
Total revenue - expenses = income. Subtract income deductions (personal, pension, etc.).
4
Calculated Tax - Prepaid Tax (3.3%)
Apply the tax rate to your taxable income, then subtract the 3.3% already withheld to determine additional payment or refund.
Simple Expense Ratio vs. Standard Expense Ratio:
| Category | Simple Expense Ratio | Standard Expense Ratio |
|---|
| Eligibility | Prior year revenue under 24M KRW (incl. new businesses) | Prior year revenue 24M KRW or more |
| Expense calculation | Revenue x ratio (60-93% by industry) | Verified major expenses + other expenses x standard ratio |
| Freelancer ratio (940909) | 64.1% | 17.4% |
| Advantage | No documentation needed, simple | Better if actual expenses are high |
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Withholding Tax Calculator
Calculate your 3.3% withholding and expected refund after filing
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4. Filing for Business Owners
Sole proprietors must file comprehensive income tax on their business income. Bookkeeping requirements vary by business scale.
Simple Bookkeeping vs. Double-Entry Bookkeeping:
| Category | Simple Bookkeeping | Double-Entry |
|---|
| Target | Small-scale businesses | Businesses above threshold |
| Format | Income/expense only (household ledger style) | Full accounting (financial statements) |
| Tax accountant | Self-filing possible | Tax accountant recommended |
| Penalty for no books | Estimated filing (expense ratio applied) | 20% non-bookkeeping penalty |
Bookkeeping requirements by revenue:
| Industry | Simple Bookkeeping | Double-Entry Required |
|---|
| Retail, Real Estate Sales | Under 300M KRW | 300M KRW+ |
| Manufacturing, F&B, Construction | Under 150M KRW | 150M KRW+ |
| Services, Freelancers | Under 75M KRW | 75M KRW+ |
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VAT Calculator
Easily calculate your business VAT liability
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5. Side Hustle Income Tax
With the rise of multi-job workers in Korea, a common question is: "Do I need to file for side income as an employee?" In most cases, yes, you do.
Filing requirements by side income type:
| Side Income Type | Classification | Filing Threshold |
|---|
| Freelance work | Business income | Must file |
| Blog/YouTube ad revenue | Business income | Must file |
| Lecture/manuscript fees | Other income | Over 3M KRW/year after expenses |
| Delivery/driving services | Business income | Must file |
| Stock dividends | Dividend income | Over 20M KRW/year |
| Rental income | Rental income | Over 20M KRW/year |
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Take-Home Pay Calculator
See your actual take-home pay after taxes and social insurance
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6. 7 Tax-Saving Strategies
The key to reducing your comprehensive income tax is maximizing deductions and claiming all available credits.
1
Maximize Business Expenses
Collect receipts for all business-related expenses (supplies, telecom, transport, entertainment, software subscriptions). Register a business credit card for automatic expense tracking.
2
Yellow Umbrella Mutual Aid
A retirement savings plan for small business owners. Deduct up to 5M KRW (income under 40M), 3M KRW (40M-100M), or 2M KRW (over 100M) from taxable income.
3
Pension Savings & IRP Tax Credit
Contribute up to 6M KRW to pension savings + 9M KRW total with IRP for up to 1.485M KRW tax credit (16.5% for income under 55M, 13.2% above).
4
Donation Tax Credit
15% credit for donations up to 10M KRW, 30% for amounts above. The Hometown Love Donation program offers full credit up to 100K KRW plus local gifts.
5
Medical Expense Tax Credit
15% credit for medical expenses exceeding 3% of gross income. Infertility treatment gets 30%, premature infant care gets 20%.
6
Education Expense Tax Credit
15% credit with no limit for self-education, up to 3M KRW/year for K-12, and 9M KRW/year for university tuition per child.
7
Faithful Filing Confirmation
Businesses above certain revenue thresholds verified by a tax accountant receive additional medical/education credits, a 1-month filing extension, and 60% credit on confirmation costs (up to 1.2M KRW).
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Tax Refund Calculator
Calculate your expected refund with tax-saving strategies applied
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7. Tax Calculation Simulations
Here is a comparison of estimated tax payments by annual income for freelancers (simple expense ratio 64.1%, single, basic deductions only):
| Annual Revenue | Expenses (64.1%) | Taxable Income | Calculated Tax | Prepaid (3.3%) | Result |
|---|
| 30M KRW | 19.23M | 7.67M | 0.506M | 0.99M | -484K (Refund) |
| 50M KRW | 32.05M | 14.85M | 1.075M | 1.65M | -575K (Refund) |
| 80M KRW | 51.28M | 25.62M | 2.724M | 2.64M | +84K (Additional) |
| 100M KRW | 64.10M | 32.80M | 4.294M | 3.30M | +994K (Additional) |
Key insights:
- Freelancers earning under 50M KRW typically receive a refund since the 3.3% withholding exceeds their actual tax liability.
- Starting at 80M KRW, additional payment begins. Tax-saving strategies become critical at this level.
- At 100M KRW+, double-entry bookkeeping is mandatory. Professional tax management is essential.
8. Filing Timeline & Checklist
Monthly preparation timeline:
| Timing | Tasks |
|---|
| Jan-Feb | Organize prior year income/expenses, download business card statements, verify tax invoices |
| March | Close books, calculate depreciation, consult tax accountant (double-entry filers) |
| April | Check HomeTax filing notice (filing type, expense ratios), finalize deduction documentation |
| May 1-31 | File and pay comprehensive income tax (HomeTax / tax office / via tax accountant) |
| Late June | Faithful filer deadline, refunds begin (approx. 30 days after filing) |
| November | Mid-term prepayment (1/2 of previous year's tax) |
Filing preparation checklist:
✅HomeTax filing notice (filing type, applicable expense ratio)
✅Withholding tax receipts (3.3% withholding records)
✅Business credit card and cash receipt records
✅Tax invoice purchase/sales records
✅National pension and health insurance payment records
✅Pension savings/IRP contribution certificates
✅Yellow Umbrella contribution certificate
✅Donation receipts
✅Bookkeeping records (simple or double-entry) completed
✅Refund bank account information ready
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Rental Income Tax Calculator
Easily calculate tax on residential and commercial rental income
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Summary: Filing comprehensive income tax may seem complex, but with early preparation and thorough use of deductions, you can significantly reduce your tax burden. Use CalKit's tax calculators to estimate your liability in advance and build the optimal tax-saving strategy. Don't forget to file every May!