For foreign workers' year-end tax settlement, how is the 19% flat tax rate applied?

Foreign workers can choose the flat tax rate when they submit an application at year-end tax settlement. In this case, tax is calculated by multiplying earned income by 19%, instead of using the basic tax rates (6~45%)¹².

Who Can Apply

• You must be a foreign executive or employee. Daily workers are excluded².
• You must not hold Korean nationality on the last day of the tax year².
• It applies to earned income received up to the end of the tax period that ends within 20 years from the first day you worked in Korea².
• Current law covers those who first started working in Korea on or before December 31, 2026².
• It does not apply if you work for a related-party company (특수관계기업). However, some foreign-invested companies are an exception².

How to Apply

1. At year-end tax settlement, attach the "Application for Flat Tax Rate for Foreign Workers" (「외국인근로자 단일세율적용신청서」) to the Income and Tax Credit Deduction Report¹.
2. Submit it to your company (the withholding agent, 원천징수의무자) or a tax association (납세조합). When filing the comprehensive income tax return, you can also submit it to your local tax office².
3. You can also ask your company to withhold tax at 19% from your monthly salary from the start².

How Tax Is Calculated

• The determined tax amount is calculated as (total salary + non-taxable income) × 19%¹.
• If the determined tax is more than the tax you already paid, you pay the difference. If it is less, you get a refund¹.
• Other non-taxable items, deductions, reductions, and tax credits do not apply. This earned income is also not added to your comprehensive income¹².

⚠️ Things to Note

• Under the latest law, some benefit-type pay continues to be recognized as non-taxable. This is slightly different from the manual's explanation that "no non-taxable items apply." In such cases, follow the law².
• In general, people with many dependents or large donations may find the basic tax rate more favorable. It is a good idea to calculate both ways and then choose.
• For the final decision, check with your company's payroll staff or the National Tax Service Call Center (국세상담센터) at 126.