Tax and Legal Rules in South Korea for September 2026

Tax and Legal Rules in South Korea for September 2026

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For individuals in Korea, the tax year runs from 1 January to 31 December, the annual return is filed from 1 May to 31 May of the following year, and employers handle monthly withholding and the year-end settlement. According to PwC’s Worldwide Tax Summaries, last reviewed on 2 July 2026, those are the anchor dates. What changes most from person to person is whether you count as a tax resident and which of the special elections for foreign employees applies, so the rest of this article walks through the calendar, the residence test and one rule that has changed in recent years.

The annual calendar for individuals

PwC gives the following timetable:

When What happens
Through the year Employers withhold income tax at source monthly.
After year-end, by 10 March Employers finalise employees’ tax liability and file the final tax settlement receipt with the tax authorities.
1 May to 31 May Individual income tax return filing period for the previous tax year; tax accompanying the return is due by 31 May.

The older National Tax Service (NTS) manual on year-end settlement for foreigners describes the employee side: settlement occurs when February salary is paid, and employers issue withholding receipts by the end of February. The two sources describe slightly different dates for the employer’s step, one for settling with the employee and one for filing the receipt, so ask your payroll team which date it follows.

When a deadline falls on a weekend or holiday it can move. A Busan city announcement about local income tax shows a filing period ending on 2 June in one year, with a link from the NTS’s Hometax platform to the Wetax platform for the local income tax portion. For the current year’s exact date, check the NTS notice.

Who must file a return

PwC states that expatriates who receive only Class A salary income, or retirement income, are not required to file a tax return before leaving Korea, while those with other income types must file before departing. The NTS manual says foreign residents whose only income is wages settled through year-end settlement need not file an additional global income return, while other taxpayers file in May of the following year. If you have rental income, freelance income, dividends or foreign-employer income, ask the NTS or an adviser whether a return is required.

The residence test

PwC says an individual is a resident if they have a domicile in Korea or reside in Korea for 183 days or more in a tax year. It lists a consecutive rule that is new as of 2026 for people who reside in Korea for a consecutive 183 days spanning two tax years. It states that tax authorities also look at occupation, accompanying family and substantial assets in Korea, and that residence is decided on the facts. Under the NTS manual, residents are taxed on worldwide income and non-residents only on Korean-source income. If you travel often or arrive mid-year, keep a calendar of days spent in Korea.

A rule that changed: the flat tax election for foreign employees

The NTS manual cited here is the 2020 edition. It says foreign employees may elect a flat 19% rate instead of the graduated rates of 6% to 42% for five years from the first service date, and that the election disqualifies the standard deductions and credits. PwC’s current summary says foreign expatriates may elect a flat 19% rate, excluding local tax, for 20 years from the start of employment, provided they began working by 31 December 2026, and that most deductions and credits are forfeited. The difference between a five-year and a 20-year period shows why an older guide cannot be relied on. Whether the election helps depends on your income and deductions, which this article cannot assess; ask your payroll team or an adviser, and find out how and when the election must be made.

Foreign-source income for residents

PwC says foreign residents who have stayed longer than five years during the last ten must include foreign-source dividends and interest in global income, taxed at the greater of the basic rates or 15.4%. Residents who have stayed five years or less include foreign-source income only if it is paid by a Korean entity or transferred to Korea. PwC also notes penalties for offshore account non-disclosure. For anyone with overseas accounts, raise this with the NTS or an adviser early.

A calendar checklist for a resident employee

  1. January to February: collect documents for year-end settlement and give them to your employer.
  2. By March: confirm you received the withholding receipt.
  3. Before May: decide whether you have other income that requires a return.
  4. 1 to 31 May: file and pay if a return is required, through the NTS Hometax portal.
  5. Local income tax: after the national filing, check the local portion on Wetax, as described in the Busan announcement.
  6. Before leaving Korea: check whether a final return is required.

Common mistakes and what to verify

  • Assuming everything is settled by the employer. Other income can require a May return.
  • Using a past manual. The flat tax election differs between the 2020 manual and the current PwC summary.
  • Ignoring residence days. Resident status changes what is taxed.
  • Forgetting local income tax. The Busan announcement describes a separate local filing step.
  • Leaving without checking. Some expatriates must file before departure.

Rules change: confirm with the official body

This article is general information, not tax, legal or financial advice. Dates, rates, residence tests and elections are set by the National Tax Service and the Ministry of Economy and Finance, and are amended by legislation. PwC itself shows its summary was last reviewed on 2 July 2026. Confirm the current rules and dates with the NTS, its Hometax portal or a qualified tax adviser before acting.

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