The Korea year-end tax settlement for foreigners 2026—known locally as yeonmaljeongsan—is the annual reconciliation between the tax already withheld from your salary and your true tax liability. If you worked as an employee in Korea during 2025, you complete this process in January and February 2026, and it determines whether you receive a refund or owe extra. This step-by-step guide explains the 19% flat-rate option, which deductions foreigners can claim, the Hometax workflow, and the deadlines you must hit.
Done well, the Korea year-end tax settlement for foreigners can return a meaningful refund. Done carelessly, you leave money on the table. Here is exactly how to navigate it.
Throughout the year, your employer withholds estimated income tax from each paycheck. The year-end settlement compares that total withholding against your final liability after all eligible deductions and credits. If you overpaid, you get a refund through your February or March salary; if you underpaid, the shortfall is collected. Every employed foreigner with Korean employment income participates, whether they use the progressive scale or the flat rate.
Eligible foreign employees may elect a flat 19% national rate (plus the 10% local surtax, roughly 20.9% all-in) on total Korean employment income, available for a limited number of years from when you first start working in Korea. The flat rate forgoes most deductions, so it benefits high earners whose progressive-scale tax would exceed the flat figure, but not lower earners who would do better claiming deductions.
| Method | Rate | Deductions | Best For |
|---|---|---|---|
| Progressive scale | 6%–45% + 10% local surtax | Full range allowed | Most employees, those with big deductions |
| Flat-rate election | 19% + 10% local surtax (~20.9%) | Generally forgone | High earners, time-limited eligibility |
To see how the progressive scale would tax your salary, try our Korea income tax calculator for foreigners 2026 before choosing.
Under the progressive method, foreigners can claim many of the same deductions as Korean nationals, subject to residency and documentation:
If you elected the 19% flat rate, you generally cannot claim these itemized deductions, which is the key trade-off.
| Period | Action |
|---|---|
| Mid–late January 2026 | Hometax simplified service opens; gather deduction data |
| By early February 2026 | Submit deduction documents to employer |
| February–March 2026 | Settlement finalized; refund or extra tax in payroll |
| May 2026 | File global income tax return if you had other income or unreconciled jobs |
If you switched employers in 2025, give your previous employer's withholding receipt to your current employer so all income is combined into one settlement. If that is not possible, you will likely need to file a May global income tax return to reconcile both jobs and avoid under- or over-paying.
The Hometax simplified service is the backbone of the Korea year-end tax settlement for foreigners. After logging in (with a digital certificate or simplified authentication), open the year-end settlement section to view automatically compiled data—credit and debit card spending, insurance premiums, medical expenses, pension contributions, and education costs reported by third parties. You confirm the figures, add any items not captured (such as some rent payments or overseas donations), and generate a deduction report. Download the PDF and submit it to your employer's payroll team. Foreigners sometimes find certain data missing because a provider did not link it; in that case, gather the original receipts and enter them manually so you do not lose the deduction. Start early in the window, because last-minute submissions can be rejected if your employer's internal cut-off has passed.
Three factors interact in your settlement: residency status, your choice of flat rate versus progressive scale, and which deductions you can claim. A resident using the progressive method can claim the widest range of deductions; a foreigner electing the 19% flat rate generally forgoes them. Because the flat rate is only worthwhile when its lower headline rate beats the progressive tax-after-deductions, you should model both each year while you remain eligible. Use our Korea income tax calculator for foreigners 2026 to estimate the progressive figure, then compare it against 19% (about 20.9% with surtax) on your income before deciding.
The year-end settlement is not always a refund—sometimes you owe more, typically when too little was withheld during the year (for example, after a raise, a bonus, or losing a deduction you previously claimed). In that case the shortfall is deducted from your February or March pay, and if the amount is large, Korea allows it to be spread over a few months. To avoid surprises, review your withholding allowance with payroll mid-year, keep your dependents and deduction status current, and set aside a small buffer if you received irregular income. Owing a modest amount is normal and simply means your monthly withholding was slightly low rather than that you did anything wrong.
The year-end tax settlement (yeonmaljeongsan) is Korea's annual reconciliation of the tax already withheld from your salary against your actual tax liability. Employed foreigners complete it in January-February 2026 for the 2025 tax year, submitting deduction documents to their employer, who calculates whether you get a refund or owe more.
Eligible foreign employees can elect a flat 19% rate (plus 10% local surtax, about 20.9% all-in) on total Korean employment income instead of the progressive scale, for a limited number of years from when they start working in Korea. The flat rate forgoes most deductions, so it helps high earners but not everyone.
Employers run the settlement in January and finalize it with February payroll, reflecting any refund or additional tax. The supporting deduction data is typically gathered through the Hometax simplified service in mid-to-late January.
If your withheld tax exceeded your final liability after deductions, the difference is refunded through your February or March salary. Submitting all eligible deductions through Hometax and to your employer maximizes the refund.
Common deductions include national pension and health insurance contributions, credit and debit card spending, housing rent or loan items, dependents, medical and education expenses, and donations. Eligibility varies by residency and whether you chose the flat rate.
Yes. Even if you elect the flat rate, your employer still performs the year-end settlement to reconcile withholding, but you generally cannot claim the itemized deductions available under the progressive method.
Hometax is the National Tax Service's online portal. Its year-end simplified service compiles much of your deduction data automatically. Foreigners can access it to download deduction statements to give to their employer.
You should provide your previous employer's withholding receipt to your current employer so all income is combined in one year-end settlement. If you cannot, you may need to file a May global income tax return to reconcile.
Most employees finish with the year-end settlement. You file a May global income tax return only if you had other income, multiple unreconciled employers, or were not covered by an employer settlement.