Year-End Tax Settlement
Estimated refund or extra payment.
Approximate estimateBased on 2026 rulesSources: Income Tax Act · National Tax Service · Hometax
Estimated refund
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What is year-end tax settlement?
Year-end settlement compares tax withheld monthly throughout the year against the final decided tax. If more was withheld than owed, you get a refund; if less, you owe an additional payment.
How it's calculated
The earned-income deduction is applied to gross salary, then personal deductions (1.5M per dependent) and pension contributions are subtracted to get the taxable base. Income tax brackets and the earned-income tax credit apply, then your entered tax credits are subtracted to get the decided tax.
Seasonal schedule
January: check the National Tax Service's simplified year-end service and submit deduction filings to your employer. February: refund or additional payment is reflected in your salary. May (optional): missed deductions can still be claimed via an amended comprehensive income tax filing.
Deductions that boost your refund
Credit card spending over 25% of gross salary (15% credit; 30% for debit/cash receipts), medical expenses over 3% of gross salary (15% credit), education expenses (15%), and donations (15%, 30% above 10M KRW) are the main levers. This calculator does not compute these individually — sum their effects into "total tax credits" yourself.
Worked examples
Gross 40,000,000 KRW, withheld 2,000,000, credits 300,000 → decided tax approx. 1,558,500 → refund of approx. 441,500 KRW. Gross 50,000,000 KRW, withheld 1,600,000, credits 300,000 → decided tax approx. 2,861,250 → additional payment of approx. 1,261,250 KRW.
Notes
Deduction conditions, and how to reclaim what you missed
Refunds turn on deductions, not rates — and most deductions carry conditions, so having spent the money is not enough.
The income condition for dependants
The basic deduction requires the dependant's annual income to be 1 million KRW or less — or gross salary of 5 million KRW or less where employment is the only source. Income means receipts net of expenses.
Age conditions apply: 60 or over for ascendants, 20 or under for descendants, with no age limit for those with disabilities. Siblings sharing a household can also qualify.
Only one sibling may claim a shared parent. Duplicate claims are collected back with penalties, so agree in advance — usually the higher earner benefits most.
Card spending only counts above a threshold
Card spending is deductible only above 25% of gross salary; anything below that threshold has no effect, so the payment method is irrelevant until it is crossed.
Above it, rates differ: debit cards and cash receipts are more generous than credit cards, and traditional markets and public transport more generous still. Hence the tactic of switching to debit once the threshold is passed.
Many payments are excluded even by card — taxes and public charges, telecom bills, insurance premiums, tuition, vehicle purchases and apartment management fees.
Missed deductions can be reclaimed for five years
Deductions missed at year-end can be reclaimed by amended return within five years of the statutory deadline, filed through Hometax with no penalty.
Commonly missed items include parents living separately, the year of a mid-year resignation, glasses and contact lenses, and the monthly rent credit.
Leavers get only a rough settlement from the employer, with individual deductions largely unapplied. Filing an income tax return the following May often produces a sizeable refund.
Legal basis
- Basic deduction — Income Tax Act art. 50
- Card spending deduction — Restriction of Special Taxation Act art. 126-2
- Monthly rent credit — same Act art. 95-2
- Five-year amended return — Framework Act on National Taxes art. 45-2