19% flat tax for foreign employees in Korea — when it pays off and when it does not

Korea lets foreign employees pay income tax in one of two ways. Most people should stay with the normal method, but at high salaries the flat rate can save millions of won. This guide shows where the line is.

Two ways to be taxed

	Normal method	Flat rate for foreign employees
Rate	6–45% progressive	19% flat
What is taxed	Total salary (non-taxable pay excluded)	All pay, including non-taxable items
Deductions and credits	Earned income deduction, family, cards, pension savings, rent, insurance, medical, education…	None
Local income tax	+10% of the income tax	+10% of the income tax (so 20.9% in total)

The flat rate is simple, but it gives up everything the normal method offers: the earned income deduction, dependents, card spending, the pension savings credit, the rent credit — all of it. That is why it only wins when your salary is high enough that your normal marginal rate is well above 19%.

Where the line is

For a single person whose only non-taxable pay is the ₩200,000 monthly meal allowance (₩2.4 million a year), and who claims nothing else, the calculator gives:

Total salary	Normal method	19% flat rate	Lower
₩100,000,000	₩11,761,364	₩19,456,000	Normal
₩150,000,000	₩26,921,864	₩28,956,000	Normal
₩165,000,000	₩31,806,076	₩31,806,000	Flat (by ₩76)
₩200,000,000	₩43,746,220	₩38,456,000	Flat
₩300,000,000	₩79,098,615	₩57,456,000	Flat

Income tax only; local income tax adds 10% to both columns, so it does not change which one is lower.

The break-even point is about ₩165 million. Below it the normal method is cheaper even with no deductions at all. At ₩300 million the flat rate saves over ₩21 million.

Deductions move the line up

Every deduction you can claim makes the normal method cheaper, so you need a higher salary before the flat rate wins:

Your situation	Flat rate starts to win at about
Single, meal allowance only	₩165,000,000
Single + ₩9 million in pension savings and IRP	₩172,970,000
Spouse + 2 children	₩180,670,000
Spouse + 2 children + ₩6 million pension savings	₩185,880,000

All with the same ₩2.4 million meal allowance. Just above the break-even point, one extra deduction can flip the result — which is why comparing your own numbers matters more than any rule of thumb.

Who can use it

• You are a foreign national employed in Korea (not a daily worker)
• You first started working in Korea on or before December 31, 2026
• The year is within 20 years of that first day of work
• You do not work for an employer that is a related party (for example a company you control)

If you qualify, you can choose the method each year — nothing locks you in.

What counts as “total pay”

The 19% applies to your whole employment income for the year, including non-taxable items such as the meal allowance. The exception is welfare-type non-taxable benefits defined in the Income Tax Act, such as the value of company-provided housing and group insurance premiums — those stay out of the base.

This is the opposite of the normal method, where non-taxable pay is removed first (see non-taxable pay). When you use the calculator, enter your total salary as usual and put your non-taxable pay in the separate field — the calculator adds it back for the flat-rate comparison.

How to apply

• At year-end: tell your employer’s payroll team you want the flat rate and submit the flat-rate application form (외국인근로자 단일세율적용신청서) with your year-end documents. You can also choose it when filing your own return in May.
• During the year: you can ask your employer to withhold 19% from each month’s pay instead of using the normal withholding table. If you do, most of the tax is already paid by year-end.

Withholding at 19% every month does not decide the final result by itself — the year-end settlement is where the method is chosen. If the normal method turns out lower, you get the difference back.

Coming change: 21% from 2027 (proposal)

The government’s 2026 tax reform proposal raises the flat rate from 19% to 21% for income earned from January 1, 2027 and extends the deadline for starting work to December 31, 2029. It still needs to pass the National Assembly. It does not affect the 2026 tax year — we will update this guide and the calculator once it is final.

Common questions

Is the flat rate better if my salary is high but I have a big family? Not necessarily. Each dependent and the child tax credit make the normal method cheaper. With a spouse and two children the break-even point moves from about ₩165 million to about ₩181 million.

My employer already withholds 19%. Can I still get the normal method? Yes. At the year-end settlement the two methods are compared again, and you can choose the lower one.

Does the flat rate cover local income tax? No. Local income tax is 10% of whichever income tax you end up paying, so the flat rate really costs 20.9% of total pay.

Are there other special rules for foreigners? Yes, for example a 50% income tax reduction for qualifying foreign engineers and researchers, and tax treaty exemptions for some teachers. This calculator does not model those — ask your employer or the National Tax Service (1588-0560).