Taxes in Korea for Foreigners
Last verified: September 22, 2026 · Source-verified
If a Korean client says, “We’ll deduct 3.3% before paying you,” treat that number as a tax clue, not the final answer.
For certain business income paid to a Korean tax resident, the payer withholds 3% national income tax. Individual local income tax is generally collected at 10% of that national withholding, bringing the familiar deduction to 3.3%.
That deduction usually does not settle your annual tax. Your first job is to identify what kind of income you are actually earning: wage income, continuing independent business income, a one-off payment classified as other income, or income subject to nonresident rules.
Gangnam District Tax Office, Seoul · Photo: hyolee2 / Wikimedia Commons · CC BY-SA 3.0
You work independently and provide services repeatedly:
Your payment may be treated as business income, and 3.3% withholding is common for income that falls within the withholding rules.
You work under an employment relationship:
Your income may be wage and salary income even if someone casually calls you a freelancer.
You performed one isolated job:
The payment may fall into other income rather than continuing business income.
You are a nonresident for Korean tax purposes:
Do not assume the resident 3.3% treatment applies. Korean-source rules and a tax treaty may change the result.
1. Where the 3.3% comes from
The National Tax Service states that a withholding agent generally withholds 3% from business income that is subject to withholding.
Korea also collects individual local income tax alongside that withholding. For a resident, the local amount is generally 10% of the national income tax withheld. A 3% national withholding therefore produces another 0.3% in local income tax.
| Item | Rate in the common 3.3% case | What it is |
|---|---|---|
| National income tax | 3% | Business-income withholding |
| Individual local income tax | 0.3% | 10% of the national withholding |
| Total deducted | 3.3% | Common combined withholding |
A qualifying payment of ₩1,000,000 could be handled as:
National income tax: ₩30,000
Local income tax: ₩3,000
Amount paid after withholding: ₩967,000
This example only shows the withholding arithmetic. It does not decide whether your income should legally be classified as business income, whether VAT applies to your business, or what your final annual tax will be.
2. The 3.3% deduction is usually not your final tax
Think of the amount withheld during the year as tax already paid toward your annual liability.
When annual income is calculated, your final result can be different. Your total income, allowable business expenses, deductions, credits and tax already withheld all affect the settlement.
That can produce three outcomes:
- the tax already withheld is close to the final amount;
- too much was withheld and you receive a refund;
- too little was withheld and additional tax is due.
This is why a year of receiving “96.7% of the invoice” does not automatically mean your Korean tax obligations are finished.
3. “Freelancer” is not a complete tax classification
Korean tax guidance looks at the actual relationship behind the payment.
A 2026 National Tax Service interpretation restated the basic distinction:
| Actual working arrangement | Possible tax category |
|---|---|
| Work provided under an employment or similar employment relationship | Wage and salary income |
| Independent services provided continuously or repeatedly | Business income |
| Independent service provided temporarily or as a one-off activity | Other income may apply |
The name printed on your contract does not settle this by itself. The real working relationship, continuity of the activity and other facts matter.
If you work regular hours for one company, follow detailed direction, function like its staff and receive recurring compensation, do not assume that writing “freelancer” in a contract automatically makes the payment business income.
4. Cases where you should not apply the 3.3% rule automatically
You are really an employee
Wage income follows payroll withholding and year-end settlement rules. The tax process is different from ordinary freelance business-income withholding.
The work was genuinely one-off
A temporary independent service may fall under other-income rules. Its withholding calculation can differ from 3.3%.
You are a tax nonresident
Nonresident taxation starts with whether the income is Korean-source income and whether a tax treaty changes Korea's taxing right or withholding treatment.
A special settlement rule applies
Certain categories of business income can be handled through specific year-end settlement rules. The fact that business income was withheld during the year does not by itself prove that every recipient follows exactly the same May filing route.
5. Keep the records that explain your income
Do not wait until May to reconstruct a year of freelance work from bank deposits.
Keep:
- contracts and statements of work;
- payment records and invoices;
- withholding statements, including 사업소득 원천징수영수증 where applicable;
- receipts and records for legitimate business expenses;
- HomeTax income records;
- documents showing your Korean tax-residency position if that is not obvious.
사업소득 — business income
원천징수 — withholding
원천징수영수증 — withholding tax receipt/certificate
종합소득세 — Global Income Tax
필요경비 — deductible/necessary business expenses
6. The next question is whether you have to file in May
For many foreign freelancers, the practical sequence is:
Payment → 3.3% withholding where applicable → annual income records → Global Income Tax review in May → refund or additional payment
The next step is to check whether your income actually requires a Global Income Tax return, what HomeTax shows, and whether wage, business or other income has already been settled under another procedure.
Video: Korea’s 3.3% freelancer withholding
This English explainer gives a useful introduction to the 3.3% freelancer-tax concept. The legal and rate details in this article were rechecked separately against 2026 NTS and statutory sources.
Official sources checked
- National Tax Service — Business Income Withholding
- National Law Information Center — Local Tax Act, Article 103-13
- NTS Tax Law Information — 2026 Income Classification Interpretation
- NTS — Individual Income Tax and Benefit Guide for Foreigners 2026