Korean Card Spending Deduction Calculator

This calculator works out the card-spending income deduction that employees claim in Korea's year-end tax settlement. Enter your gross salary, what you spent during the year by credit card, by debit card and cash receipt, at traditional markets and on public transport, and on culture such as books and performances, plus the number of children, and it shows the minimum spend before the deduction starts, the amount after each category's rate, the cap and the final deduction.

This is an income deduction, which reduces the income that is taxed, not a tax credit that cuts the tax directly. The money you actually get back is the deduction multiplied by your marginal rate, so the same deduction is worth more to a higher earner. Read the result as a deduction, and remember the refund depends on your rate.

Use it in the second half of the year. Entering the first half's spending shows whether you have crossed the minimum-spend line and, if not, how much more it takes. Before the line, you can decide which payment method to use for the rest of the year; after it, the numbers show that switching from credit card to debit card or cash receipts pays.

Dual-income couples use it to decide whose card to spend on. The minimum spend scales with salary, so the lower earner crosses the line sooner, while above the line the deduction is worth more to the higher earner. Enter each partner's salary and expected spending and compare.

The rule is 조세특례제한법 제126조의2. The minimum spend is 25% of gross salary, and the deduction starts only once the year's spending exceeds it. Rates differ by payment method: 40% for traditional markets and public transport, 30% for debit cards and cash receipts, 15% for credit cards, and for those earning ₩70 million or less, 30% on cultural spending such as books, performances and cinema.

The order of operations decides the result. First each category is multiplied by its rate and the results added. Then the share attributable to the minimum spend is subtracted, and under 제2항제6호 it is taken from the lowest-rate credit card spending first. That is why filling the minimum with credit card and spending above it by debit card produces the largest deduction for the same money. Finally the cap: the basic cap is ₩3 million for a salary of ₩70 million or less, ₩3.5 million with one child and ₩4 million with two or more, and ₩2.5, ₩2.75 and ₩3 million above that salary. Amounts over the basic cap are allowed on top of it, up to ₩3 million (₩2 million above ₩70 million), but only out of the market, transport and culture portions.

Take the default on screen: a ₩50 million salary and ₩20 million on a credit card. The minimum spend at 25% is ₩12.5 million, exceeded by ₩7.5 million. ₩20 million at 15% is ₩3 million, and subtracting the ₩1,875,000 attributable to the ₩12.5 million minimum leaves a deduction of ₩1,125,000, within the ₩3 million cap.

Split the same ₩20 million into ₩12.5 million on credit and ₩7.5 million on debit and the rated amount becomes ₩1,875,000 plus ₩2.25 million, or ₩4,125,000, while the minimum is absorbed entirely by the credit portion so the subtraction stays at ₩1,875,000. The deduction doubles to ₩2.25 million. With ₩12.5 million on credit, ₩20 million on debit and ₩5 million at traditional markets, ₩8 million remains after the subtraction, over the ₩3 million basic cap, and the ₩2 million market portion is added under the extra cap for a deduction of ₩5 million.

The most common question is why heavy card spending yields so little. Nothing counts up to 25% of salary, and above that a credit card earns only 15%, which is why ₩20 million of spending produces a deduction of little over ₩1 million. The next is mistaking the deduction for the refund; as an income deduction, the tax saved is the deduction times your rate.

Some spending never counts: taxes and utility charges, apartment management fees, insurance premiums, car purchases, spending abroad and corporate card spending booked as company expenses are all excluded. Medical costs, on the other hand, earn both the medical tax credit and the card deduction when paid by card. In a year when salary passes ₩70 million, cultural spending drops to the credit card rate and the caps shrink, so if you are near that line the result can change sharply.