Before you start

A view on your residence position — settled life in Korea, or 183 days
An Alien Registration Card; its thirteen-digit number is your tax identifier
Clarity on income types: Korean employment, foreign-source, freelance business income
Resident registration at your rented address, if you want the rent credit

Step-by-step

1
Establish residence and how long you have held it
Residence turns on domicile or 183 days of presence in the tax year. Then count how many of the last ten years you have been resident: at five or fewer, foreign-source income is taxed only if a Korean entity pays it or you bring it into Korea. Crossing that threshold moves you to worldwide taxation and nothing announces it.
OnlineWho: You, with a tax accountant if you hold foreign income or assetsAssess on arrival, re-check annually
2
Let the year-end settlement do it if you are a plain employee
Employers withhold monthly and run the year-end settlement in January and February against the tax office's pre-filled data, filing the final receipt by 10 March. Over-withholding comes back through the February or March payslip. Employees with only Class A salary normally file nothing separately.
Via employerWho: Your employer's payroll team, with documents from youJanuary–February
3
Claim the monthly rent tax credit at year-end settlement
Employees below an income threshold can claim a credit on rent paid, at a rate and up to an annual cap that are both revised most years. The conditions people trip over: your resident registration must be at the rented address, and the property must be within the size or value limits. Landlord consent is not required. Gather your lease, the transfer records showing rent paid, and your resident registration abstract, and submit them with your other deduction evidence.
Via employerWho: You, through your employer's year-end settlement or on HometaxJanuary–February
4
Model the flat-rate election
Foreign employees may elect a flat 19% on Korean employment income, roughly 20.9% with the local surtax, for a long window from your first day of work. It strips out every deduction, exemption and credit — including the rent credit — and excludes people with a controlling interest in the employer. It only wins at high salaries. Compare both each year.
Via employerWho: You, with your employer or a tax accountantElected annually
5
Freelancers: treat the 3.3% as a prepayment
Korean clients withhold 3.3% from freelance fees as a credit against your real liability, not as a final tax. Sustained self-employment means registering as a sole proprietor with the tax office shortly after starting, after which you generally charge and remit VAT instead.
OnlineWho: You, via HometaxRegister soon after starting
6
File the May global income return if you are not a single-salary employee
Freelancers, the self-employed, people with several employers and anyone with extra reportable income file between 1 and 31 May for the previous calendar year and pay by month end. Filing on Hometax is free and the tax office runs an English helpline on 126.
OnlineWho: You, or a licensed tax accountant1–31 May

Documents you’ll need

Alien Registration Card — the registration number is your tax identifier
Withholding receipts and the year-end settlement statement from your employer
Lease, rent transfer records and resident registration abstract, for the rent credit
Deduction evidence: pension and health contributions, medical, education, dependants
Business registration certificate and expense records, for freelancers

Things most newcomers don’t know

The monthly rent tax credit is money on the table and the move-in report is what makes it claimable.

Employees under an income threshold can credit a percentage of rent paid against tax, up to an annual cap. The condition that trips foreigners is that your resident registration must be at the rented address — the same move-in report that protects your deposit. You do not need the landlord's permission and they cannot refuse. Rates, cap and threshold are revised most years, so check Hometax for the current figures.

Source: National Tax Service — Hometax, year-end settlement guidance

Electing the flat 19% rate cancels the rent credit along with everything else.

The election replaces the progressive scale with a single rate on Korean employment income and forfeits every deduction, exemption and credit in exchange. That includes housing, medical, education and the monthly rent credit. In a city like Daegu, where salaries are moderate and rents low enough that many people clear the credit's income threshold, the election loses at incomes where it might look tempting.

Source: PwC Worldwide Tax Summaries — Korea, taxes on personal income

The five-year window on foreign income is the most valuable relief most newcomers never hear about.

Resident five years or fewer of the last ten and your overseas salary, investments and rental income sit outside Korean tax unless a Korean entity pays them or you remit them here. That is substantial planning space for anyone with assets abroad, and it closes silently. Knowing the exact date it closes is worth an accountant's hour in year four rather than a surprise in year six.

Source: PwC Worldwide Tax Summaries — Korea, residence and income determination

Moving from Seoul to Daegu does not reduce your income tax, whatever the cost of living does.

The 10% local income tax is a fixed proportion of your national income tax paid to the municipality where you live — not a rate that varies between cities. What Daegu genuinely changes is the cost side: low rents, low parking, low everyday prices, and an income threshold for the rent credit that far more people clear here than in the capital. Take the saving in the right column.

Source: National Tax Service

Common mistakes to avoid

Never claiming the monthly rent tax credit, or losing it by not having your resident registration at the rented address.
Electing the flat rate below its break-even and forfeiting the rent and other credits.
Not tracking when the five-year foreign-income window closes.
Freelancers treating the 3.3% withholding as final and skipping the May return.
US citizens forgetting the treaty does not remove their annual IRS filing obligation.

Some of this may be out of date. Spotted something inaccurate? Help us keep it right for the next newcomer.