Korean 3.3% Withholding
Calculate Korea’s 3.3% freelance withholding both ways: from contract amount to take-home, or back from the amount you want to receive.
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Korean 3.3% Withholding: complete guide
Walk through the steps and examples, or jump straight to the topic you need.
At a glance
- Taxes withheld
- Two taxes: income tax and local income tax, which is 10% of it.
- What 3% really is
- Income tax of 3% plus local income tax makes 3.3%.
- Preset values
- Business income 3%, other income 8%, other income 20%, and manual entry.
- Two directions
- It does both: deducting from the contract amount and working back from the take-home amount.
- Truncation
- Tax is truncated to the won or to 10 won.
- Cross-check
- It checks and shows whether the take-home amount plus tax equals the contract amount.
- What it does not cover
- The four major social insurances and filing of comprehensive income tax are not calculated.
- Where it runs
- Calculated only in this browser; amounts are not sent to a server.
How to use Korean 3.3% Withholding
Choose the direction
If you want to know how much arrives from the amount written in the contract, choose Deduct from contract amount. If you have a take-home amount in mind and want to know what contract amount to quote, choose Work back from take-home amount.
Choose the income tax rate
Commonly used values are included. Personal-service business income is 3%, and other income with recognized necessary expenses is 8%. If your contract states another value, choose manual entry and enter it. Local income tax is added automatically.
Enter the amount
Commas are read as they are. The truncation place for tax defaults to the won, and you can change it if the client truncates to 10 won.
Check the two taxes separately
Income tax and local income tax appear separately, so you can compare them line by line with your payment statement. It also checks that the take-home amount plus tax equals the contract amount.
What it’s good for
Why 3.3% and not 3%
When 3% income tax is withheld in Korea, local income tax of 10% of that income tax is added with it. Adding 10% of 3, which is 0.3, means 3.3% is actually taken out. The same reason turns 8% on other income into 8.8% and 20% into 22%. This tool shows the two taxes separately so they are easy to check against your payment statement.
It also works backward from the amount you want to receive
You can work back to what the contract amount must be to take home 3,000,000 KRW. Because tax is truncated below the won, several contract amounts can produce the same take-home amount; in that case the tool shows the amount closest to the value from the formula.
Worked examples
Contract of 1,000,000 KRW
Business income 3%Income tax 30,000 KRW
Local income tax 3,000 KRW
Take-home amount 967,000 KRWWhen you want to receive 967,000 KRW
Work back from take-home amount - 3%Contract amount 1,000,000 KRWCommonly used rates
Swipe the table sideways to see the rest.
| Income type | Income tax | Actual deduction rate |
|---|---|---|
| Personal-service business income | 3% | 3.3% |
| Other income (60% expenses recognized) | 8% | 8.8% |
| Other income (expenses not recognized) | 20% | 22% |
When the result isn’t what you expected
The amount differs from my statement by a few won
The truncation place may differ. Try switching between the won and 10 won. Some clients truncate income tax and local income tax at different places.
I do not know which rate it is
Enter the rate written in the contract or payment statement as it is. This tool does not judge which rate is correct. If you are not sure, check with a tax professional.
The amount worked back is not a round number
Because of truncation, there can be several contract amounts that produce the same take-home amount. Of these, it shows the one closest to the value from the formula. It is better to write a round amount in the contract and check the take-home amount again.
Where are the four major social insurances
They are not included in this calculation. Freelancer contracts usually have withholding only, but it can differ by contract type.
Key terms
- Withholding
- The payer deducts tax in advance and pays it on your behalf.
- Local income tax
- A local tax added along with income tax, at 10% of it.
- Take-home amount
- The amount that actually arrives in your bank account after tax.
- Comprehensive income tax
- The tax you file the following year on a year's combined income. The amounts withheld in advance are settled there.
Korean 3.3% Withholding FAQ
Which rate should I choose?
It depends on your contract type and kind of income. In Korea, 3% is common for personal-service business income and 8% for other income with recognized necessary expenses. This tool does not judge which is correct, so please check your contract or ask a tax professional.
Do I get the withheld tax back?
When you file your comprehensive income tax return at year end, the actual tax is settled. If the amount withheld in advance was more than the actual tax, you get the difference back. This tool calculates only the amount withheld in advance.
Are the four major social insurances deducted too?
They are not part of this calculation. Freelancer contracts usually have withholding only, but it can differ by contract type, so please check your contract.
Can I calculate several payments at once?
For now it calculates one at a time. The rate can differ for each payment, so entering each separately is more accurate.
Is VAT calculated too?
It is not included. If you issue a tax invoice, please use a VAT calculator as well.
Is the amount I enter saved?
It is not saved. Refreshing the page returns it to the initial state.