Once the signing date is set, the question of how much cash to bring arrives fast. For a sale it is easy: take the purchase price, apply the rate, done. A monthly rent lease is different, because the contract lists two numbers instead of one. A typical line reads "deposit 10 million won, monthly rent 600,000 won", and it is not obvious whether the rate applies to the deposit, to the rent, or to some combination of the two. That is exactly where most people's mental arithmetic stops.
The short answer is that a lease has to be converted into a single transaction amount first. And that conversion has a second step that most guides mention in a single line and then skip. This article starts with the actual numbers for the lease conditions people sign most often, then unpacks the conversion rule and the bracket table that produced them.
1. Start with the numbers: brokerage fees by lease condition
The figures below use the upper-limit lease rates applied in Seoul and Gyeonggi. VAT is charged separately, and each amount is the maximum an agent may collect.
| Situation | Deposit / Monthly rent | Converted amount | Max rate (cap) | Max fee |
|---|---|---|---|---|
| Small studio | 5M / 400K | 33M won | 0.5% (200K) | 165,000 won |
| Standard studio | 10M / 600K | 70M won | 0.4% (300K) | 280,000 won |
| Short-term lease | 3M / 500K | 53M won | 0.4% (300K) | 212,000 won |
| High-deposit lease | 20M / 700K | 90M won | 0.4% (300K) | 300,000 won |
| Semi-jeonse | 100M / 800K | 180M won | 0.3% | 540,000 won |
| Jeonse | 300M / none | 300M won | 0.3% | 900,000 won |
Three rows in that table look wrong at first glance.
The small studio converts to 33 million won, not the 45 million you get from adding the deposit to a hundred times the rent.
The high-deposit lease multiplies 90 million by 0.4%, which is 360,000 won, yet the fee stops at 300,000 won.
The short-term lease has the smallest deposit of the three low-end rows and still costs more than the small studio.
Each of those is a place where a hand calculation goes wrong. Here is why.
2. The two-step rule that turns rent into a lump sum
A lease brokerage fee is never calculated on the deposit and the rent separately. The two are folded into one transaction amount, and the bracket for that amount decides the rate. The folded figure is usually called the converted deposit.
Step one: multiply the monthly rent by 100
Transaction amount = deposit + (monthly rent × 100)
The formula treats 10,000 won of monthly rent as equivalent to 1,000,000 won of deposit. A lease of 10 million won deposit plus 600,000 won rent becomes 10M + 60M = 70 million won.
Step two: if step one lands under 50 million won, multiply by 70 instead
This is where most calculations diverge from reality. If the step-one figure comes to less than 50 million won, that figure is discarded and the rent is re-converted at a multiplier of 70.
Transaction amount = deposit + (monthly rent × 70)
Run the small studio through it:
- Step one: 5M + (400K × 100) = 45 million won
- 45 million is below the 50 million threshold, so step two applies.
- Step two: 5M + (400K × 70) = 5M + 28M = 33 million won
- Below 50 million, the lease rate is 0.5% with a cap of 200,000 won.
- 33M × 0.5% = 165,000 won, which is under the cap, so the ceiling is 165,000 won.
Skip step two and you would have applied 0.5% to 45 million won, produced 225,000 won, hit the 200,000 won cap and budgeted 200,000 won. That is 35,000 won more than the legal maximum.
The rule exists to protect small leases where the deposit is modest and the rent carries most of the value. Multiplying rent by 100 inflates the transaction amount quickly, which would make the commission disproportionately heavy on exactly the contracts where very little lump-sum money changes hands. Lowering the multiplier below a threshold keeps that in check.
Conditions for step two, restated
- The test always looks at the step-one result, not at the deposit on its own.
- A step-one result of exactly 50 million won is not "less than", so no re-conversion happens.
- The step-two figure can never climb back above 50 million won, because a smaller multiplier always yields a smaller total.
- Jeonse has no monthly rent, so no conversion is needed at all. The deposit is the transaction amount.
3. Rate brackets for the converted transaction amount
Once the amount is fixed, the remaining job is finding the bracket. Lease and sale use different tables, and for the same amount the lease side is lower.
| Converted transaction amount | Lease max rate | Sale max rate |
|---|---|---|
| Under 50M won | 0.5% (cap 200K) | 0.6% (cap 250K) |
| 50M to under 100M won | 0.4% (cap 300K) | 0.5% (cap 800K) |
| 100M to under 200M won | 0.3% | 0.5% (cap 800K) |
| 200M to under 600M won | 0.3% | 0.4% |
| 600M to under 900M won | 0.4% | 0.4% |
| 900M won to under 1.2B won | 0.4% | 0.5% |
| 1.2B to under 1.5B won | 0.5% | 0.6% |
| 1.5B won and above | 0.6% | 0.7% |
Every number in that table is a ceiling. It does not mean the agent must charge that rate; it means the agent may not charge above it. More on that distinction below.
Rates and caps are also set by local ordinance. The table above reflects the Seoul and Gyeonggi standard, and bracket edges or caps can differ elsewhere, so it is worth checking the ordinance for the district where the property sits.
4. The brackets where the cap decides before the rate does
Only the two lowest brackets carry a cap. In those, if the amount times the rate exceeds the cap, the cap wins. Past a certain point the fee stops growing no matter how much the transaction amount rises.
| Bracket | Rate | Cap | Cap starts binding above |
|---|---|---|---|
| Under 50M won | 0.5% | 200,000 won | 40 million won |
| 50M to under 100M won | 0.4% | 300,000 won | 75 million won |
The high-deposit row from the first table lives here. A 20 million won deposit with 700,000 won rent converts to 90 million won, and 0.4% of that is 360,000 won. The cap for the bracket is 300,000 won, so the real ceiling is 300,000 won. By the same logic, converted amounts of 80 million and 95 million both stop at 300,000 won.
Cross 100 million won and the cap disappears. At exactly 100 million the rate of 0.3% gives 300,000 won; at 150 million it gives 450,000 won. The design keeps the curve continuous across the boundary, which also means that near this edge, shifting money between deposit and rent barely moves the fee.
5. How the calculation shifts: semi-jeonse, short-term and jeonse
Semi-jeonse moves the whole bracket
A semi-jeonse of 100 million won deposit plus 800,000 won rent converts to 180 million won. The rate drops to 0.3%, but the base is far larger, so the fee is 540,000 won. Restructure the same property as a pure monthly lease at 20 million deposit and 1,000,000 won rent and the converted amount is 120 million won, for a fee of 360,000 won. The more of the value sits in the deposit, the higher the commission.
A short lease does not get a discount
Whether the term is six months or two years, the formula is identical. Nothing is prorated by duration. In the short-term example, a 3 million won deposit with 500,000 won rent gives a step-one figure of 53 million won, so no re-conversion applies and the 0.4% bracket takes over for a fee of 212,000 won. Compared with the 5 million deposit and 400,000 won rent lease, the deposit is 2 million won smaller yet the fee is 47,000 won higher, purely because 100,000 won more rent pushed the converted amount past the 50 million line and out of the step-two relief.
Jeonse jumps sharply around 600 million won
Jeonse is the simplest case, since the deposit is the transaction amount, but the bracket edges create large steps.
| Jeonse deposit | Max rate | Max fee |
|---|---|---|
| 200M won | 0.3% | 600,000 won |
| 500M won | 0.3% | 1,500,000 won |
| 590M won | 0.3% | 1,770,000 won |
| 600M won | 0.4% | 2,400,000 won |
| 1.19B won | 0.4% | 4,760,000 won |
| 1.2B won | 0.5% | 6,000,000 won |
Ten million won more deposit adds 630,000 won to the ceiling. Signing just above a boundary is the clearest situation in which to remind everyone that the published figure is a ceiling, not a price.
6. The ceiling and the amount you actually pay are different
Every figure calculated so far is an upper limit. Korean brokerage law sets the ceiling and leaves the actual rate to agreement between the agent and the client, with the agreed rate and amount written into the contract. Confirming and negotiating the rate before signing is the normal procedure, not an unusual request.
Items to settle alongside the rate:
- VAT: brokerage fees carry VAT on top. A standard-registered agency charges 10%; a simplified-taxation agency applies an industry value-added ratio and effectively charges less. A fee of 280,000 won becomes 308,000 won with 10% VAT, so always ask whether a quote includes it.
- Timing: the fee is due when payment for the transaction is complete, which for a lease means the balance payment date, unless the parties agree otherwise.
- Each side pays its own: the landlord and the tenant each owe a full fee. The amount calculated above is what one side pays, not a total to be split in half.
- Non-residential property: an officetel of 85 square meters or less with its own kitchen, flush toilet and bathing facilities takes 0.5% for sales and 0.4% for leases. Other officetels, retail units and land are negotiated within 0.9%.
- If the deal collapses: where brokerage was not completed and the client is not at fault, no fee is generally owed. Outcomes vary with the circumstances, so a special clause in the contract is the cheapest way to avoid a dispute.
7. Frequently asked questions (FAQ)
Q1. What exactly is the fee on a 10 million deposit and 600,000 won rent?
Step one gives 10M + (600K × 100) = 70 million won. That is above 50 million, so step two does not apply. The lease rate for the bracket is 0.4% with a 300,000 won cap, so 70M × 0.4% = 280,000 won, below the cap and therefore the ceiling. Adding 10% VAT brings it to 308,000 won.
Q2. Some sources say multiply rent by 100 and others say 70. Which is right?
Both, in sequence. Multiply by 100 first; only if the result falls under 50 million won do you redo it at 70. Leases with a sizeable deposit or rent above roughly 500,000 won almost always clear 50 million on the first pass, so the multiplier of 70 shows up mainly in small studios with deposits in the low millions.
Q3. Do the landlord and tenant split the fee between them?
No. Each pays a separate fee. If the calculation yields 280,000 won, the tenant pays 280,000 won and the landlord pays 280,000 won. It is not 140,000 won each, and confirming this before signing keeps the moving budget honest.
Q4. Can I pay less than the rate in the table?
Yes. The published figures are ceilings and negotiating below them is exactly what the law contemplates. Amounts sitting just above a bracket edge, or units that have been vacant for a while, tend to leave the most room. Settle it before signing and write the agreed rate into the contract so nothing changes on the balance payment date.
8. Run your own numbers in the brokerage fee calculator
Even once the conversion rule is clear, a small change in the lease terms can move the entire bracket, which means redoing the arithmetic every time. Enter the deposit and the monthly rent into the real estate brokerage fee calculator and it handles both the first conversion and the fallback multiplier below 50 million won, showing the converted transaction amount, the applied rate and the fee ceiling on one screen. Try a higher deposit with lower rent, then a semi-jeonse structure, and you can see immediately which combination costs less in commission.
To check what an agreed rate is as a share of the ceiling, or what the total looks like once VAT is added, the percentage calculator pairs well with it. For the rest of the pre-signing checklist, the exclusive versus supply area guide explains how listed floor areas are reported, and if you are also weighing a purchase, the apartment acquisition tax calculator guide covers the tax that lands on the same closing date.
