19% flat tax vs progressive
For 20 years after starting work in Korea, foreign employees may elect a flat 19% rate on gross pay, giving up all deductions. See which option costs less at your salary.
How it works
Flat: gross pay (including non-taxable allowances) × 19% + 1.9% local tax = 20.9%. You forgo every deduction and credit.
Progressive: the standard employee method (earned-income deduction → allowances → 6–45% → credits), identical to our salary-after-tax calculator.
The flat rate typically wins from around KRW 100–120M a year; more dependents or bigger deductions push the break-even higher.
Assumptions
- Progressive side uses only the standard credit; itemized deductions raise the break-even
- Flat rate available for 20 years from first day of work in Korea (2023 amendment)
- Social insurance is identical under both, so excluded
FAQ
How do I elect it?
Submit the flat-rate application form to your employer; it is applied at year-end settlement. You can switch each year.
Does it cover non-taxable allowances?
Yes — under the flat rate, housing and other normally non-taxable benefits are included in the 19% base, which is why it can lose at lower salaries.