What the 3.3% is
If you do freelance work in Korea without a business registration (teaching, design, translation, modelling and so on), the client withholds tax before paying you: 3% income tax plus local income tax of 10% of that, which is 0.3%. Together that is the familiar “3.3%”. This page applies to residents of Korea, including foreign residents; non-residents are covered by different withholding rules.
- Income tax = payment × 3%, with anything under ₩10 dropped
- Local income tax = that income tax × 10%, again dropping anything under ₩10
- Take-home = payment − both taxes
Because the won amounts are rounded down twice, the deduction can be a few won less than an exact 3.3%.
Worked examples
| Contract amount | Income tax 3% | Local tax | Total withheld | Take-home |
|---|---|---|---|---|
| ₩1,000,000 | ₩30,000 | ₩3,000 | ₩33,000 | ₩967,000 |
| ₩1,234,567 | ₩37,030 | ₩3,700 | ₩40,730 | ₩1,193,837 |
In the second row 3% is ₩37,037.01, which becomes ₩37,030 after rounding down, and the local tax drops from ₩3,703 to ₩3,700.
Going the other way, if you need ₩3,000,000 in your account, invoice ₩3,102,370: ₩93,070 income tax and ₩9,300 local tax come off and exactly ₩3,000,000 is left. Use the Take-home → contract amount tab when you quote a fee.
The May tax return
The 3.3% is a prepayment, not your final tax. In May you file a global income tax return (종합소득세) covering all of last year’s income. Your expenses and deductions are subtracted, the progressive rates are applied, and the tax already withheld is credited. Pay less than was withheld and you get a refund; owe more and you pay the difference.
Freelancers with modest income often get money back, while people with other income can end up owing more. Since expense rates and deductions vary, this tool does not estimate the May result. For a rough yearly figure try the income tax calculator. If you are paid the same amount every month, enter the number of months under Number of payments to see the total withheld for the year.
Good to know
- Being paid “3.3%” does not make you an employee: there is no national pension or employment insurance deducted, and health insurance may be billed to you separately.
- If you actually work as an employee but are paid on a 3.3% basis, your pay is really wage income and is taxed differently. See the salary calculator.
- VAT-registered businesses that issue tax invoices charge VAT instead of having 3.3% withheld.