Korean Tax Return Made Easy: A Complete Guide for Foreign Workers in Korea

Did you know that foreign workers in Korea are also eligible for a Korean Tax Return?

If you didn’t, make sure you don’t miss it in 2026. For many foreigners, Korea’s tax system can feel complicated—especially with language barriers and unfamiliar administrative processes.

That’s why Homes in Korea has put together this guide to help foreign residents settle in Korea smoothly, without unnecessary tax issues, by clearly explaining the essentials of Korea’s year-end tax settlement system.

What Is the Korean Tax Return?

Understanding Korea’s Year-End Tax Settlement for Foreigners

The Korean Tax Return (Year-End Tax Settlement) is a process that compares the taxes withheld from your salary throughout the year with the actual tax you are required to pay.

Regardless of nationality, any foreign worker who earns employment income in Korea may be subject to this year-end tax settlement process.

In most cases, your employer handles the tax return on your behalf. As an employee, you are only required to submit necessary documents such as the income and tax deduction application form and relevant supporting documents.

Residency Status and Tax Differences in the Korean Tax Return

How Residency Status Is Determined

Residency status plays a critical role in determining tax liability underKorea’s year-end tax system.

If you qualify as a resident, you may apply various deductions such as medical expenses, insurance premiums, and education expenses.

If classified as a non-resident, available deductions are limited, which can result in a higher tax burden. Therefore, foreign workers should always confirm their residency status before proceeding with their year-end tax filing.

You are generally considered a resident if:

You have stayed in Korea for 183 days or more, andYour main place of living and work is in Korea

Progressive Tax vs. Flat Tax: How to Choose in the Korean Tax Return

Progressive Tax: Korea’s Standard Tax System

Korea’s income tax system is fundamentally based on a progressive tax structure.

This means tax rates increase as income increases:

Lower income brackets are taxed at lower ratesHigher income moves into higher tax brackets

This structure is designed so that individuals with higher income bear a greater tax burden. As a result, Korean nationals are taxed exclusively under the progressive tax system.

Flat Tax: A Special Option for Foreign Workers

Foreign workers, however, are given a special option in Korea : they may choose a flat tax rate of 19% instead of the progressive tax system.

This option offers two major advantages:

Simplified tax calculation: No need to apply multiple deductions or prepare extensive documentation, making it easier for foreigners unfamiliar with the Korean tax system.Potential benefit for high-income earners: While progressive tax rates increase with income, the flat tax remains fixed at 19%, which may be advantageous for foreign workers with high income and few deductions.

However, there is an important trade-off.

By choosing the flat tax rate, you give up most deductions and tax credits, including:

Medical expenses / Insurance premiums / Education expenses / Donations / Personal and dependent deductions

In summary:

Few or no deductions → Flat tax may be convenient and beneficialMany deductions (family, medical, education, donations) → Progressive tax may be more advantageous

The flat tax is not universally better, but it can be an excellent option depending on your individual situation.

Q&A: How Do Foreigners File Their Taxes?

Q. Do foreign workers need to file the Korean Tax Return themselves?

In most cases, foreign workers do not file taxes individually. The Korean tax system is structured so that employers handle the year-end tax settlement on behalf of their employees.

Typically, employees are required to:

Check year-end tax data via Hometax, operated by the National Tax ServiceSubmit income and deduction forms and any supporting documents requested by their employer

Once submitted, the employer completes the year-end settlement process, and the result is reflected in February salary payments, either as a tax refund or additional tax payment.

Simply put, foreign workers usually provide documents according to company instructions, rather than managing the entire tax filing process themselves.

🔍 More Useful Information

Individual Income Tax and Benefit Guide for Foreigners 2025 (Tax Return for the 2024 Tax Year)

→ An official guide provided by the National Tax Service, explaining income tax, year-end tax settlement, and benefits for foreign residents in Korea.

National Tax Service Call Center: 1588-0560

→ English-language consultation supported

Q. How does the Korean Tax Return work if I changed jobs or resigned?

Foreign workers who resigned or changed jobs before the end of the year should be especially careful. Since income may be split across multiple employers, it is essential to obtain a withholding tax certificate from your previous employer.

This document allows your current employer to combine your total annual income and taxes already paid when processing the Korean Tax Return.

If the year-end tax settlement was not completed—due to job changes or timing issues—you may still correct it by filing an individual income tax return in May.

Because job changes are common among foreign workers, it is strongly recommended to confirm between February and March whether your Korean Tax Return was properly completed.

For foreigners preparing their first year-end tax settlement in Korea, the process may seem overwhelming at first. However, once you understand the basic structure and key decision points, it becomes much more manageable. We hope this guide helps you successfully navigate your first tax milestone in Korea.

Homes in Korea is committed to supporting foreign residents—not only with housing, but also with essential information for daily life in Korea. We will continue to provide even more useful guidance in 2026 and beyond.