Confused about tax filing every year?

Learn the clear differences between '연말정산' and '종합소득세 신고 and find the right method for you.

1. Simple Tax Filing, '연말정산'  😇  

If you are an '근로자' (salaried employee) affiliated with a company and enrolled in the 4 major insurances, your company will generally handle your tax filing on your behalf.
This is called '연말정산'.

It compares the taxes withheld monthly with the actual taxes owed for the year. If you've overpaid, you get a refund; if you've underpaid, you pay the difference.

2. Tax Filing You Must Handle Yourself, '종합소득세 신고'  🤯

If you are not eligible for '연말정산' or have other income in addition to your company salary (earned income), you must file your taxes yourself in May.
This is called '종합소득세 신고'.

This typically applies in the following cases:

• Business income, other income, real estate rental income, financial income, etc.
• Dual-job employees working for two or more companies
• Cases where연말정산 was not completed by the company

How is 종합소득세 Calculated?

종합소득세 is calculated by summing up all income earned in a year.
It uses a progressive tax rate system where higher income levels are subject to higher tax rates.

Example: If your total taxable income for the year is 60 million won, the final tax is calculated by applying the 24% tax rate and subtracting the progressive deduction amount.
(Calculation: 60 million won × 24% - 5.76 million won = 8.64 million won)

How to Avoid a Tax Bomb: Don't Forget 'Deductions'!

You don't have to pay taxes on all your income.
You can legally reduce your taxes through various deduction items! 
Deductions are broadly divided into two types.

The most crucial part is to keep proper documentation for your expenditures!
Don't miss the May 종합소득세 filing period each year, and carefully review your income and expenses!

Reference Material

💰 2025 Taxable Income Tax Rate Table

Income Descriptions

• Business Income: Income earned through business activities, such as for freelancers, sole proprietors, and professionals.
• Other Income: Income earned temporarily, such as lecture fees, manuscript fees, payment for occasional services, prizes, and lottery winnings.
• Real Estate Rental Income: Income earned from renting out residential or commercial properties.
• Interest Income and Dividend Income (Financial Income): When the total financial income (interest, dividends) exceeds 20 million won.

Deduction Descriptions

• Personal Deductions: Deductions based on the number of oneself, spouse, and dependents (under 20 years old, over 60 years old, or disabled).
• National Pension Insurance Premiums Deduction: Full deduction of National Pension insurance premiums paid monthly.
• Housing-Related Deductions: Repayment of mortgage interest, contributions to housing subscription savings accounts, etc.
• Credit Card Usage Deduction: Deduction for credit card, debit card, and cash receipt usage amounts exceeding a certain percentage of total salary.
• Private Pension Savings/Pension Savings Deduction: Deduction for pension savings contributions made for retirement preparation.
• Medical Expense Tax Credit: Deduction for a certain amount of medical expenses paid for oneself or dependents.
• Education Expense Tax Credit: Deduction for education expenses paid for oneself or dependents.
• Insurance Premium Tax Credit: Deduction for a certain amount of premiums paid for protection-type insurance.
• Donation Tax Credit: Deduction for amounts donated to legally recognized or designated donation organizations.
• Monthly Rent Tax Credit: Deduction for non-homeowner employees who pay monthly rent, subject to certain conditions.