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
Hometax access, or your employer's payroll team

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
Model the flat-rate election properly
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 in Korea. It forfeits every deduction, exemption and credit and excludes people with a controlling interest in the employer, so it only wins at high salaries. Compare both each year rather than deciding once.
Via employerWho: You, with your employer or a tax accountantElected annually
4
Do not budget a company plan around abolished FEZ tax breaks
If you are moving to set up or run a foreign-invested company in Songdo, note that the up-to-seven-year corporate and income tax reductions for FEZ investments ended for new investments from 1 January 2019. Pre-2019 investments were grandfathered. What remains is local tax reduction on application, customs duty exemption on capital goods, and land and rent support — real, but a different order of magnitude.
OnlineWho: You, with a Korean tax adviser and the IFEZ investment deskBefore committing capital
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
Deduction evidence: pension and health contributions, housing, medical, education, dependants
Business registration certificate and expense records, for freelancers
Records of foreign income and of remittances into Korea

Things most newcomers don’t know

The Free Economic Zone's corporate tax holiday was abolished in 2019 and most published material still promises it.

Korea ended the up-to-seven-year corporate and individual income tax reductions for qualifying foreign direct investment — including investment in free economic zones, foreign investment zones and free trade zones — for new investments from 1 January 2019, to equalise treatment of domestic and foreign capital under international base-erosion work. Pre-2019 investments were grandfathered. Local tax reductions, customs exemptions and land support survive, and are what an IFEZ package now actually contains.

Source: Invest Korea / KOTRA; PwC Worldwide Tax Summaries — Korea corporate incentives

The five-year window on foreign income is the most valuable relief nobody mentions.

Resident five years or fewer of the last ten, 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 quietly. Knowing the exact date it closes is worth an appointment with an accountant in year four rather than year six.

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

The flat 19% election costs money below its break-even.

It replaces the progressive scale on Korean employment income with a single rate but strips out every deduction and credit at the same time. The break-even sits well into the six figures in US dollar terms, so mid-range earners who elect it because it sounds simpler pay more than they need to. It is an annual election, so model both ways each year rather than committing once.

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

Living in Incheon rather than Seoul does not reduce your income tax.

The 10% local income tax is a fixed proportion of your national income tax, paid to the municipality where you reside — it is not a rate you can shop for between cities. Where local variation does bite is on property acquisition and holding, and there the Free Economic Zone carve-outs and the overcrowding-restriction rules can genuinely differ. Take advice on property, not on salary.

Source: National Tax Service

Common mistakes to avoid

Planning a Songdo company around corporate tax reductions that ended in 2019.
Not tracking when the five-year foreign-income window closes.
Electing the flat rate below its break-even and losing deductions worth more.
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.