Bonus Tax Calculator

Overview

The Bonus Tax Calculator shows what you actually take home from a Korean holiday bonus, performance pay, or year-end bonus after income tax, local income tax, and employment insurance. Enter your monthly salary, number of dependents, and the bonus payment period, and it applies the special bonus withholding rule from the Enforcement Decree of the Income Tax Act, then compares it against your real year-end tax liability.

Formula

Net Bonus = Bonus − Income Tax − Local Income Tax − Employment Insurance

[Income Tax — bonus withholding rule, Enforcement Decree Art. 194]
① Monthly-equivalent bonus = Bonus ÷ payment-period months
② Combined monthly tax = tax(monthly salary + monthly-equivalent bonus)
③ Salary-only monthly tax = tax(monthly salary)
④ Bonus income tax = (② − ③) × payment-period months

• Local income tax = income tax × 10%
• Employment insurance = bonus × 0.9% (employee share, 2026)
• National Pension (4.75%) and Health Insurance (3.595%) are levied on a fixed
  standard monthly income, so they are usually settled later, not on the bonus month

How to Use

1. 1Enter your monthly gross salary, excluding the bonus.
2. 2Enter the gross bonus amount.
3. 3Enter the number of dependents (including yourself) and children aged 8–20.
4. 4Choose the payment period: 1 month for a monthly bonus, 3 for quarterly, 12 for an annual performance bonus.
5. 5Choose how social insurance is deducted; most employers only add employment insurance.
6. 6See your net bonus, deduction breakdown, tax derivation, and expected year-end refund.

Examples

Background

Korea applies no special tax rate to bonuses. Article 194 of the Enforcement Decree of the Income Tax Act prescribes that for a bonus with a designated payment period, the bonus is divided by the number of months, added to the average monthly salary for that period, run through the simplified withholding tax table, multiplied back by the number of months, and reduced by tax already withheld. Without a designated period, the bonus is simply added to that month's pay, which temporarily pushes the employee into a higher progressive bracket — the reason bonuses feel heavily taxed. The final liability is recomputed on annual gross pay at year-end settlement, so over-withheld amounts are refunded. Among social insurances, employment insurance is charged on remuneration actually paid and therefore applies to the bonus immediately, while National Pension and Health Insurance are charged on a pre-set standard monthly income and are instead reflected in the annual recalculation and the total-compensation settlement.

Tips

• ✔Picking the right payment period matters most: the same bonus withholds very differently as 1 month versus 12 months of work.
• ✔A heavy deduction on the bonus month is usually refunded at year-end settlement — check the projected refund figure.
• ✔Health insurance may bill the bonus portion in the following April's total-compensation settlement.
• ✔Regular holiday bonuses can count toward average and ordinary wage, affecting severance pay and allowances.

FAQ