Year-End Tax Settlement in Korea for Foreigners: Step by Step 외국인 연말정산 방법

1. Check whether you are a resident

For tax, you are a resident if you have lived in Korea for 183 days or more, or your home and life are here — your visa type does not decide it. Residents get the same deductions and credits as Koreans. Non-residents get only their own personal deduction, pension contributions and the wage income tax credit.

Residents are taxed on worldwide income. But if you have lived in Korea for 5 years or less in total over the last 10 years, income from abroad is only taxed when it is paid in Korea or sent to Korea.

2. Before December 31

• Pension savings or IRP: payments up to ₩9 million in total earn a credit of 13.2% (16.5% if your taxable pay is ₩55 million or less), including local tax — but only up to the tax you owe.
• Card spending: only spending above 25% of your taxable pay counts. Above that, debit cards and cash receipts (30%) count double credit cards (15%).
• Rent: monthly rent paid by bank transfer can earn a 15–17% credit if you meet the conditions — your registered address (체류지) must match the lease.
• Family: check who you can claim — spouse with income of ₩1 million or less, children 20 or under, parents 60 or over.

3. Key dates

4. Get your data from Hometax

From about January 15, the simplified data (연말정산 간소화) on Hometax shows the insurance, medical, education, card and other records Korean companies reported for you. Log in with a certificate registered to your alien registration number — see logging in to Korean government sites. Many employers collect the data for you if you give consent; ask HR which way they use.

Not everything is in the data. Collect these yourself:

• Glasses and contact lenses, school uniforms, some private academy fees
• Monthly rent: your lease, proof of your registered address, and the transfer receipts
• Documents for family members not registered with you in Korea
• Donation receipts from groups that do not report electronically

5. What foreigners can and cannot claim

Family living abroad

If you are a resident and really support them, a spouse, children and parents abroad can count as dependents, on the same age and income rules. Expect your employer to ask for documents proving the relationship — from your home country, usually with a Korean translation — and often proof that you send them money. Their medical bills and school fees abroad do not count.

Not deductible

• Medical bills from hospitals abroad
• Schools and academies abroad, for you or your children
• Card spending abroad
• A sibling’s card spending (a spouse’s or parent’s with little income can count)

Housing

Resident foreigners can claim the monthly rent credit when they meet the usual conditions (no home, taxable pay ₩80 million or less, a home of 85㎡ or less or worth ₩400 million or less, and a registered address that matches the lease). Since 2025 the housing subscription savings (주택청약) deduction is open to foreigners only as the spouse of a household head who owns no home, with taxable pay of ₩70 million or less — 40% of up to ₩3 million paid in.

6. Special rules only for foreigners

19% flat tax rate

You can choose a flat 19% (20.9% with local tax) on all your pay, with no deductions. It usually pays off only on high salaries. Is the flat tax worth it? →

Foreign engineers and researchers: 50% tax reduction

Engineers who provide technology under an engineering technology contract worth US$300,000 or more, researchers with a science or engineering degree who worked 5+ years at a research institute abroad and now work at a Korean company’s research centre, and outstanding foreign talent under the Special Act on advanced industry talent can get 50% off their income tax for 10 years. The application goes through your employer to the tax office by the 10th of the month after you start work.

Teachers and professors from treaty countries

Some tax treaties exempt teachers. For example, under the Korea–US treaty a US resident invited by the government or an accredited school to teach or research, for no more than 2 years, can be exempt. Private language academies (hagwons) do not qualify. Each treaty is different — check yours with the National Tax Service.

7. Hand in your documents and check the result

Give HR your deduction report (근로소득자 소득·세액공제신고서) with the Hometax data and other papers by their deadline. Add the flat-rate application if you choose 19%. When the settlement is done, check the withholding tax receipt: if the tax to collect (차감징수세액) is negative, that is your refund.

8. Changing jobs or leaving Korea

• New job in the same year: give your new employer the withholding tax receipt from the old job so both are settled together. If not, you must file a return in May.
• Leaving Korea: your employer settles your tax with your last pay. Hand in your documents before then, and keep your Korean bank account open until any refund arrives.
• Two jobs at once: pick a main workplace and give it the other employer’s receipt, or file in May.

What to say to HR

Questions

Do foreigners have to do year-end tax settlement in Korea?

Yes. Foreign employees go through it with their employer exactly like Korean employees, every January–February for the previous year’s pay. Daily workers are the exception.

What happens if I leave my job or Korea during the year?

Your employer settles your tax with your last month’s pay, using the documents you hand in before you leave — so give HR your papers early. Anything missed can be claimed in a May tax return.

My employer has not paid my refund. What can I do?

The refund is owed by your employer in the same way as wages. If they do not pay it, you can claim it like unpaid wages — call the Ministry of Employment and Labor on 1350.