Korean Earned Income Tax Credit Calculator

The earned income tax credit is a cash payment the state adds to the income of households that work but earn little. Enter your household type, the year's total earnings and the combined assets of everyone in the household, and this calculator shows the credit, which of the three bands your income falls in (phase-in, plateau or phase-out), and the income range that would give you the maximum. Enter the number of dependent children and it also works out the child care credit and adds the two together.

What makes the scheme unusual is that a lower income does not mean a larger payment. The credit rises with income up to a point, stays at the maximum across a band, and then falls. That is by design: it rewards work. And even within the income limit, a household with substantial assets gets half the amount or nothing at all. Those are the two places where judging by income alone goes wrong, and the calculator checks both.

People who live on part-time work, day labour or a small business and want to know what to expect before the May application window. The National Tax Service sends invitations to apply, but anyone who meets the conditions can apply without one, so this is the place to check whether you qualify in the first place.

It also helps anyone weighing up whether to work more. The worry that "more income means a smaller credit" is true only in the phase-out band; in the phase-in band the credit grows. Enter your current income and the higher figure in turn and the answer is clear. If a spouse's earnings change and the household shifts from single-earner to dual-earner, the maximum and the bands change too, so run it again.

The basis is 조세특례제한법 제100조의3 and 제100조의5. The first step is the household type. With no spouse, no dependent children and no lineal ascendant aged 70 or over, you are a single household; with a spouse on low earnings or with dependants, a single-earner household; with a spouse earning above a set amount, a dual-earner household. Each type has its own income ceiling and maximum credit: a single household has a ceiling of ₩22,000,000 and a maximum of ₩1,650,000, a single-earner household ₩32,000,000 and ₩2,850,000, and a dual-earner household ₩44,000,000 and ₩3,300,000.

The second step places your income in one of three bands. In the phase-in band the credit rises in proportion to income and reaches the maximum at the top of the band; for a single household that band runs to ₩4,000,000. In the plateau band you receive the full maximum; for a single household that is from ₩4,000,000 to ₩9,000,000. In the phase-out band the credit falls in a straight line to zero at the income ceiling. A single-earner household phases in up to ₩7,000,000 and plateaus to ₩14,000,000; a dual-earner household phases in up to ₩8,000,000 and plateaus to ₩17,000,000.

The third step is assets. Under 제100조의3제1항제4호, a household whose combined assets are ₩240,000,000 or more cannot apply, and under 제100조의5제4항, assets of ₩170,000,000 or more cut the computed credit to 50%. Land, buildings, cars and deposits are all added together and debts are not deducted. The child care credit is calculated separately under 제100조의28 and 제100조의29: it starts at ₩1,000,000 per dependent child, begins to taper once earnings exceed ₩21,000,000 for a single-earner household or ₩25,000,000 for a dual-earner household, falls to ₩500,000, and is unavailable once total income reaches ₩70,000,000. The asset test is the same as for the earned income credit.

Take a single household with total earnings of ₩6,000,000 for the year and no assets. That sits in the plateau band between ₩4,000,000 and ₩9,000,000, so the credit is the full ₩1,650,000. Had the earnings been ₩3,000,000, the household would be in the phase-in band and the credit would be the maximum multiplied by 3,000,000 over 4,000,000, or ₩1,237,500. That is why a lower income produces a smaller payment. At ₩15,000,000, in the phase-out band, the credit drops to about ₩888,000.

Keep the earnings at ₩6,000,000 but suppose the household's assets come to ₩180,000,000. That is above ₩170,000,000, so the credit is halved to ₩825,000. A single-earner household earning ₩20,000,000 with two dependent children is in the phase-out band and gets ₩1,900,000 of earned income credit; because its earnings are below ₩21,000,000, the child care credit is the full ₩1,000,000 per child, ₩2,000,000, for a combined ₩3,900,000.

The most common mistake is leaving assets out. On income alone a household may qualify, but once a jeonse deposit, a car, or a share in the family home is added, the asset limit is often exceeded. Everyone in the household counts, and debts are not subtracted. The second is choosing the wrong household type. Entering a married person as a single household, or a household whose spouse earns above the threshold as single-earner, changes the maximum and the bands and gives a wrong answer.

The third is misunderstanding what counts as earnings. It is not just wages: business income and income of religious workers are included, and a spouse's income is added in. Business income is taken after an industry adjustment rate, so entering raw turnover is wrong. The fourth is overlooking the nationality condition. As a rule, a person without Korean nationality cannot apply; the exceptions are those married to a Korean national or with a dependent child who is a Korean national. This calculator only computes the amount, so eligibility has to be confirmed with the National Tax Service.