- Corporate tax rose 1 percentage point across every bracket in 2026 — now 10 / 20 / 22 / 25%, or 11 / 22 / 24.2 / 27.5% including local tax.
- The 2026 national pension rate could not be confirmed. This article originally stated 9.5%; the previous rate was 9%, split evenly. See the correction notice below.
- Total employer-side social insurance is roughly 11% of payroll for a small employer. Budget about 1.11× gross salary, before severance accrual.
This article originally stated the 2026 national pension contribution rate as 9.5%. On follow-up, that increase could not be confirmed against the National Pension Service’s own 2026 notices or the text of Article 88 of the National Pension Act. The NPS 2026 notice confirms only the revised income ceiling and floor (6,590,000 / 410,000 KRW per month), with no mention of a rate change.
The rate below is therefore marked as unconfirmed. The previous rate was 9%, split 4.5% employer / 4.5% employee. Verify with the National Pension Service (1355) before using it in payroll calculations. This article will be updated once confirmed.
Korea’s tax and social insurance system is not especially complicated, but it is specific, and almost all English-language explanations of it are out of date. This article sets out the current rates as of September 2026, with the legal basis, so you can check anything yourself.
1. Sole proprietor or corporation?
Personal income tax (sole proprietors) — unchanged in 2026
| Taxable income (KRW) | Rate | Progressive deduction |
|---|---|---|
| up to 14,000,000 | 6% | — |
| to 50,000,000 | 15% | 840,000 |
| to 88,000,000 | 24% | 6,240,000 |
| to 150,000,000 | 35% | 15,360,000 |
| to 300,000,000 | 38% | 37,060,000 |
| to 500,000,000 | 40% | 94,060,000 |
| to 1,000,000,000 | 42% | 174,060,000 |
| above 1,000,000,000 | 45% | 384,060,000 |
Basis: Income Tax Act Article 55(1). A separate local income tax of 10% of the calculated tax applies, so the top effective rate is 49.5%.
Corporate tax — raised in 2026
| Taxable income (KRW) | FY2025 | FY2026 | Incl. local tax |
|---|---|---|---|
| up to 200,000,000 | 9% | 10% | 11.0% |
| to 20,000,000,000 | 19% | 20% | 22.0% |
| to 300,000,000,000 | 21% | 22% | 24.2% |
| above 300,000,000,000 | 24% | 25% | 27.5% |
Basis: Corporate Tax Act Article 55(1), as amended by the 2025 tax reform (passed December 2025). Applies to fiscal years beginning on or after 1 January 2026.
Where the crossover sits — and why the table lies
| Taxable income (KRW) | Sole proprietor | Corporation (2026) |
|---|---|---|
| 50,000,000 | 15% | 10% |
| 88,000,000 | 24% | 10% |
| 150,000,000 | 35% | 10% |
| 300,000,000 | 38% | 20% |
2. VAT
| Item | Threshold | Basis |
|---|---|---|
| Simplified taxpayer status | Prior-year gross receipts under 104,000,000 KRW | VAT Act Art. 61 + decree |
| Real estate leasing / taxed entertainment venues | Separate threshold: 48,000,000 KRW | Above this, simplified status is excluded |
| Payment exemption | Simplified taxpayer with annual gross receipts under 48,000,000 KRW | VAT Act Art. 69 |
Filing calendar
| Period | Covers | Due | Who |
|---|---|---|---|
| H1 preliminary | 1 Jan – 31 Mar | 25 Apr | Corporations |
| H1 final | 1 Jan – 30 Jun | 25 Jul | Corporations and individuals |
| H2 preliminary | 1 Jul – 30 Sep | 25 Oct | Corporations |
| H2 final | 1 Jul – 31 Dec | 25 Jan (following year) | Corporations and individuals |
| Simplified | Full calendar year | 25 Jan (following year) | Simplified taxpayers, once a year |
Individual general taxpayers receive a preliminary assessment (half the prior period’s tax) instead of filing preliminary returns.
Electronic tax invoices
For individuals, electronic tax invoice issuance became mandatory at 80,000,000 KRW of prior-year supply value from July 2024, regardless of whether you are a general or simplified taxpayer. The threshold has been stepped down repeatedly — 200 million in July 2022, 100 million in July 2023, 80 million in July 2024 — so it is worth re-checking annually. Simplified taxpayers must issue tax invoices at all once prior-year gross receipts reach 48,000,000 KRW.
3. Withholding when you pay people
| Income type | Withholding rate | Settlement |
|---|---|---|
| Employment income | Per the simplified withholding table | Year-end settlement |
| Business income (freelancers, personal services) | 3.3% 3% income tax + 0.3% local |
Recipient settles via annual return |
| Other income (lectures, writing, advisory) | 8.8% payment × (1 − 60%) × 22% |
Separate taxation electable if annual other income is 3,000,000 KRW or less |
| Other income (no expense allowance) | 22% | — |
The withholding status report is due by the 10th of the month following payment. With approval, it becomes semi-annual (10 January and 10 July).
4. Social insurance rates (2026)
| Insurance | Total | Employee | Employer | Note |
|---|---|---|---|---|
| National pension | 9.5% (unconfirmed — see notice) | 4.75% | 4.75% | Raised 1 Jan 2026; +0.5pp per year toward 13% by 2033 |
| National health | 7.19% | 3.595% | 3.595% | 2026 rate |
| Long-term care | 0.9448% | 0.4724% | 0.4724% | Up from 0.9182% in 2025 |
| Employment insurance (unemployment) | 1.8% | 0.9% | 0.9% | Unchanged since 1 Jul 2022 |
| Employment stability / vocational development | 0.25–0.85% | — | All | 0.25% under 150 employees |
| Industrial accident | avg. 1.47% | — | All | Varies by industry. Frozen for 2026 |
Approximate total for a workplace under 150 employees using the average accident rate. Your accident rate depends on industry classification.
Practically: an employee on 3,000,000 KRW a month costs roughly 3,340,000 KRW in cash terms. Add statutory severance accrual, which runs around 8.3% of monthly pay, and the real figure is higher again.
One subsidy worth knowing about
| Item | Detail |
|---|---|
| Programme | Durunuri social insurance support |
| Eligible workplace | Fewer than 10 employees |
| Eligible worker | Average monthly pay under 2,700,000 KRW, newly enrolled (existing enrollees excluded since 2021) |
| Covers | National pension and employment insurance only — not health or accident |
| Support level | 80% for up to 36 months |
| Disqualifiers | Prior-year property tax base of 600 million KRW or more, or prior-year comprehensive income of 43 million KRW or more |
| Mechanism | Pay the monthly premium in full and on time, then it is deducted from the following month’s premium |
Note the mechanism: full and timely payment is a condition. One late month forfeits that month’s support.
5. Bookkeeping and diligent-filing thresholds
| Business group | Double-entry required | Standard expense rate applies |
|---|---|---|
| Wholesale / retail / real estate trading | 300M KRW+ | 60M KRW+ |
| Manufacturing / food & lodging / construction / transport | 150M KRW+ | 36M KRW+ |
| Real estate leasing / professional & technical / other services | 75M KRW+ | 24M KRW+ |
This table comes from practitioner sources rather than statute text directly — verify before relying on it.
Separately, diligent-filing confirmation (성실신고확인) applies to sole proprietors at revenue of 1.5 billion KRW for wholesale/retail, 750 million for manufacturing and food service, and 500 million for leasing and professional services. Those filers get an extended deadline of 30 June instead of 31 May. Basis: Income Tax Act Article 70-2 and its enforcement decree Article 133.
6. The annual calendar
| When | What |
|---|---|
| 10 Jan | Semi-annual withholding payment (if approved) |
| 25 Jan | VAT H2 final return; simplified taxpayers’ annual return |
| Feb–Mar | Year-end settlement of employment income; payment statements filed |
| 31 Mar | Corporate tax return (December year-end companies) |
| 25 Apr | VAT H1 preliminary (corporations); preliminary assessment payment (individuals) |
| 31 May | Personal income tax return |
| 30 Jun | Personal income tax return for diligent-filing taxpayers |
| 25 Jul | VAT H1 final return |
| 31 Aug | Interim corporate tax prepayment (December year-end) |
| 25 Oct | VAT H2 preliminary (corporations) |
| 10th monthly | Withholding status report; social insurance premiums |
- Same index, triple the fee — how to actually compare ETFsVOO and SPY track the same S&P 500 but charge 0.03% and 0.0945%. Here is what a 0.47pp fee gap costs over 30 years, and what else to check besides the expense ratio.
- 2026년 사업자 세금 전체 지도 — 법인세 인상과 국민연금 9.5%법인세율이 전 구간 1%p 올랐고 국민연금이 9.5%가 됐습니다. 종합소득세·법인세·부가세·원천징수·4대보험의 현행 기준과 연간 세무 일정을 한 장에 정리했습니다.
- Korea Law Information Center — Income Tax Act Art. 55, Corporate Tax Act Art. 55, VAT Act Arts. 61 and 69: law.go.kr
- National Assembly Budget Office — 2025 Tax Law Amendments: nabo.go.kr
- Korea Law Information Center — simplified-taxpayer exclusion criteria (NTS Notice 2025-28)
- Korea Ministry of Government Legislation — Easy-to-find practical law (reference date 15 Aug 2026)
- National Pension Service — contribution rate amendment notice
- Ministry of Health and Welfare — 2026 health insurance rate decision (7.19%)
- KDI — 2026 long-term care rate (0.9448%); 2026 average industrial accident rate held at 1.47%
- Ministry of Employment and Labour — employment insurance and industrial accident rate notices
- Durunuri social insurance support official site: insurancesupport.or.kr
Some National Tax Service pages could not be read directly, so statute text and ministry notices were used as primary sources instead. Items marked in the text still need verification against source documents.