A plain-language overview of every major tax rate in South Korea, updated for 2026.
If you have ever searched “what is the tax rate in Korea,” you are not alone. Korea’s tax system layers national and local levies across individuals and corporations, and finding a single, reliable summary in English can be surprisingly difficult. This guide covers the essentials in one place.
Individual Income Tax
Korea taxes individual income on a progressive scale. Residents are taxed on worldwide income, while non-residents are generally taxed only on Korean-source income.
The national income tax brackets for 2026 are as follows:
| Taxable Income (KRW) | Rate |
|---|---|
| Up to 14 million | 6% |
| 14 million to 50 million | 15% |
| 50 million to 88 million | 24% |
| 88 million to 150 million | 35% |
| 150 million to 300 million | 38% |
| 300 million to 500 million | 40% |
| 500 million to 1 billion | 42% |
| Over 1 billion | 45% |
On top of these national rates, a local income tax of 10% of the national tax due is assessed separately. This is not an additional 10 percentage points on income; it is 10% of whatever national tax you owe. For example, if your national income tax bill is KRW 10 million, the local income tax adds KRW 1 million.
Foreign residents may also be eligible for a flat 19% tax rate on their entire Korean employment income, as an alternative to the progressive scale above. This election is available for up to 20 years of residence in Korea. Whether the flat rate or the progressive scale produces a lower tax bill depends on each individual’s income level and eligible deductions. For a detailed comparison of the two options, see our guide on the flat 19% income tax rate for foreigners in Korea.
Corporate Income Tax
Korea’s corporate income tax also follows a progressive structure. The national rates for fiscal years beginning on or after January 1, 2025 are:
| Taxable Income (KRW) | Rate |
|---|---|
| Up to 200 million | 10% |
| 200 million to 20 billion | 20% |
| 20 billion to 300 billion | 22% |
| Over 300 billion | 25% |
These rates increased by one percentage point across all brackets compared to the prior schedule. As with individuals, a local income tax of 10% of the national corporate tax due applies on top.
Local Income Tax
Local income tax in Korea is straightforward but often misunderstood. It equals 10% of your national income tax liability, whether you are an individual or a corporation. Because it is calculated as a percentage of the tax itself rather than a percentage of taxable income, the effective local rate varies depending on your bracket.
To illustrate: an individual in the 24% national bracket effectively pays a combined rate of 26.4% (24% national + 2.4% local). A corporation in the 20% bracket pays an effective combined rate of 22% (20% national + 2% local).
Other Taxes to Keep in Mind
While income tax and local tax form the core of the system, businesses and individuals operating in Korea encounter several other levies:
Value Added Tax (VAT) is applied at a flat rate of 10% on most goods and services. Businesses registered for VAT are required to file returns semi-annually and issue electronic tax invoices for all B2B transactions.
Withholding tax applies to various types of income paid to both residents and non-residents, including employment income, freelance income, dividends, interest, and royalties. The rates vary by income type and the applicable tax treaty between Korea and the recipient’s home country.
Acquisition tax is relevant for companies or individuals purchasing real estate. For corporate purchases of residential property, the rate is 12%.
How These Rates Compare Regionally
For multinational companies evaluating where to establish their Asia-Pacific operations, Korea’s progressive corporate tax structure (10% to 25% national, plus 10% local income tax) contrasts with Singapore’s flat 17% corporate rate and Hong Kong’s two-tier system of 8.25% on the first HKD 2 million and 16.5% thereafter. Each jurisdiction offers distinct incentives and compliance requirements, and the right choice depends on the company’s operational structure, profit expectations, and long-term plans. For a closer look at this comparison, see our analysis on expanding into Korea vs. Singapore vs. Hong Kong.
The Bottom Line
Korea’s tax rates in 2026 are neither the highest nor the lowest in the region, but the layered structure of national tax, local tax, and various special provisions means that the effective rate can vary significantly depending on your circumstances. Whether you are an individual employee, a freelancer, or a corporation, the numbers above provide the framework, but the real savings come from understanding which deductions, credits, and elections apply to your specific situation.
If you have questions about how these rates apply to you, feel free to reach out to us.
Written by Ara Jung (CTA)
All information provided is of limited scope and not exhaustive or comprehensive of any subject. It is not intended to be legal advice, and should not be used in place of consultation with appropriate professionals