How to Read Korea’s Income Tax Brackets
The most common myth — does crossing a bracket tax everything at the higher rate?
A common misconception is that once your tax base crosses a bracket boundary, the whole amount gets taxed at the higher rate. Korean income tax is a marginal, progressive structure — the higher rate applies only to the portion above the boundary, so nudging past a boundary never lowers your after-tax income. Below, we work through the 2026 rate table to show exactly how this plays out with real numbers.
2026 income tax brackets, all eight
| Tax base range | Rate | Cumulative deduction |
|---|---|---|
| Up to 14,000,000 | 6% | — |
| 14,000,000–50,000,000 | 15% | 1,260,000 원 |
| 50,000,000–88,000,000 | 24% | 5,760,000 원 |
| 88,000,000–150,000,000 | 35% | 15,440,000 원 |
| 150,000,000–300,000,000 | 38% | 19,940,000 원 |
| 300,000,000–500,000,000 | 40% | 25,940,000 원 |
| 500,000,000–1,000,000,000 | 42% | 35,940,000 원 |
| Over 1,000,000,000 | 45% | 65,940,000 원 |
The cumulative deduction column reconciles "tax computed bracket by bracket" with "the whole base times the final bracket’s rate" in one step — the example below shows exactly why it works.
Calculating a 40,000,000 KRW tax base two different ways
| Rate applied | Base range | Tax |
|---|---|---|
| 6% | 0 ~ 14,000,000 원 | 840,000 원 |
| 15% | 14,000,000 ~ 40,000,000 원 | 3,900,000 원 |
Adding the two bracket amounts gives 840,000 + 3,900,000 = 4,740,000 KRW.
Method 2 multiplies the whole base by the rate of the highest bracket it reaches, then subtracts the table’s cumulative deduction once: 40,000,000 × 15% − 1,260,000 = 4,740,000 KRW — identical to Method 1’s total.
Why the two methods always agree
The cumulative deduction reverses the extra tax that the formula would otherwise add — because the formula applies the top bracket’s rate to the whole base, even the earlier portion that should really be taxed at a lower rate. Look at the second bracket (15% rate, 1,260,000 KRW deduction): the formula applies 15% even to the first 14,000,000 KRW, which should only carry a 6% rate. The 9-percentage-point gap (15% − 6%) times 14,000,000 KRW is exactly 1,260,000 KRW — the deduction shown in the table.
How this connects to take-home pay and year-end settlement
The tax computed here applies rates to the tax base. To see the full path from taxable pay to that base, the take-home pay guide walks through a sample payslip, and the year-end settlement guide covers how the gap between monthly withholding and this final figure gets settled.
What happens exactly at a bracket boundary
It can be confusing which rate applies exactly at a boundary. Because each bracket taxes only the amount “over” its threshold, a tax base of exactly 50,000,000 KRW has not yet exceeded that threshold, so it still falls under the 15% bracket (1,260,000 KRW deduction); only the portion above 50,000,000 KRW — even by 1 KRW — starts being taxed at 24%. A simple rule of thumb: the exact boundary value always belongs to the lower bracket.
A caveat — the tax base is not your gross pay
What’s covered here is the rate structure applied to the tax base itself — reaching that base from real pay requires subtracting the labor income deduction, personal deductions and more first. A local income tax equal to 10% of the computed tax is added on top. This is reference information as of 2026-07-17; see the National Tax Service for the source, and confirm your specific case with a licensed tax accountant.