Korean Housing Subscription Savings Deduction Calculator
The income deduction for paying into a housing subscription savings account, and what it actually saves you in tax.
You do not get 40% back
Your situation
Result
You get a deduction of ₩1.2M. That amount does not come back to you. It reduces the base your tax is computed on, so what you actually save is ₩180,000.
Deduction
₩1.2M
40% of what you paid in
Tax actually saved
₩180,000
at a 15% rate
Ceiling used up
₩0
the ceiling is fully used
| Paid in this year | ₩3M |
|---|---|
| Counts toward the deduction (₩3M ceiling) | ₩3M |
| Deduction (40%) | ₩1.2M |
| Tax saved (at 15%) | ₩180,000 |
The rule is 조세특례제한법 제87조제2항. It is open to a head of household owning no home, or their spouse, with gross salary at or below ₩70M, and deducts 40% of the payments from employment income. You must file a certificate of no home ownership with your bank for it to apply. Closing the account early for any reason other than winning an allocation removes that year's payments. The payment record that counts toward subscription points is measured separately from this ceiling.
How this works
What it calculates
Money paid into a housing subscription savings account earns an income deduction at year-end settlement. Enter your gross salary, the year's contributions, whether you are a home-less head of household, whether you closed the account early, and your own income tax rate, and the calculator shows the contributions that qualify, the income deduction, and, separately, the tax that deduction actually saves.
The "actually saves" figure is there for a reason. This is an income deduction, not a tax credit. 40% of your contributions does not come off your tax; it comes off the base your tax is calculated on. The real saving is that deduction multiplied by your own tax rate, so the lower your rate, the less comes back. Anyone who reads the deduction as "I get 40% back" is in for a disappointing settlement.
Who uses it and when
Employees without a home who hold a subscription account and are heading into year-end settlement. It is most useful for deciding how much to pay in each month to capture the full deduction: the cap is ₩3,000,000 a year, so ₩250,000 a month fills it exactly and anything above adds nothing to the deduction.
It also helps someone starting their first job and opening an account. In the lowest tax brackets the deduction returns only a few tens of thousands of won, so there is no reason to overstretch for the tax benefit alone. At the other end, once gross salary passes ₩70,000,000 the deduction disappears entirely, so anyone near that line should first check whether they qualify this year.
Legal basis and how the maths runs
The basis is 조세특례제한법 제87조제2항. An employee with gross salary of ₩70,000,000 or less who is a home-less head of household (or the spouse of one) may deduct 40% of up to ₩3,000,000 a year paid into a housing subscription savings account from employment income. The proviso to the same paragraph says that closing the account early for any reason other than winning a housing allocation forfeits the deduction on that year's contributions entirely. The deduction applies to contributions made up to 2028-12-31.
The calculation checks eligibility first. If gross salary exceeds the ceiling, you are not a home-less head of household, or you closed the account this year, the qualifying contribution is zero. Otherwise, the qualifying contribution is the lower of what you paid and the ₩3,000,000 cap, and 40% of that is the income deduction. The actual saving is the deduction times your tax rate; leave the rate at zero if you do not know it and just read the deduction. If you are under the cap, the calculator also shows how much more you could pay in before year end.
A worked example
Take a home-less head of household on a gross salary of ₩50 million who paid in ₩3,000,000 over the year and sits in the 15% tax bracket. The salary is under the ceiling and the other conditions are met, so the full ₩3,000,000 qualifies. 40% of that is an income deduction of ₩1,200,000, and at a 15% rate the tax actually saved is ₩180,000. The cap is fully used, so there is no room left.
Had the same person paid in ₩4 million, the ₩1 million above the cap would not count: the qualifying amount stays at ₩3,000,000, the deduction at ₩1,200,000, and the saving at ₩180,000, exactly as before. The extra money is not wasted, though. Contributions counted toward housing allocation points follow a different rule from this deduction cap.
Common mistakes
The most common is reading the income deduction as a tax credit. ₩1,200,000 does not land in your account; your taxable base falls by ₩1,200,000, and only a fraction of that comes back. The second is failing to file the home-less certificate with the bank. The deduction only applies once that certificate is lodged; without it, the contributions do not appear in your settlement data even if you qualify.
The third is missing the head-of-household condition. Being home-less is not enough; you must be the head of household or the spouse of one. If you live with your parents and a parent is the head of household, you do not qualify. The fourth is underestimating the cost of closing early. Closing for any reason other than winning an allocation forfeits the whole year's deduction, and separate clawback rules apply to deductions already taken in earlier years. Finally, some foreign employees elect the flat tax rate while expecting the 40% deduction. Under the flat rate no deductions apply at all, this one included.
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Common questions
- Does 40% really come back?
- No. It is a deduction, so the amount does not come back as cash. It reduces the base your tax is computed on, so what you save is the deduction multiplied by your own rate. Paying in the ₩3M ceiling gives a ₩1.2M deduction, which in the 15% band cuts the tax by about ₩180,000.
- Who qualifies?
- A head of household who owns no home, or their spouse, with gross salary at or below ₩70M. You must file a certificate of no home ownership with your bank. It applies to payments made up to 31 December 2028.
- Should I just pay in ₩250,000 a month?
- That fills the ₩3M annual ceiling exactly. Bear in mind that the payment record counting toward subscription points is measured separately, so paying in more is not wasted.
- What if I close the account early?
- Closing it for any reason other than winning an allocation means that year's payments are not deductible. There are separate clawback rules for deductions already taken in earlier years.
- What if my salary is over ₩70M?
- Then this deduction is out of reach. You can still keep the account, and neither your eligibility to apply nor your subscription points are affected.
- Can foreign residents open one of these accounts?
- Yes. Once you have foreign resident registration you can open a housing subscription savings account. The deduction is also available if you are a tax resident and meet the no-home head-of-household test (or are their spouse). Note that electing the 19% flat rate removes every deduction. Eligibility to actually win an allocation has its own separate conditions. Check those on the Cheongyakhome site.
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Proposed changes that touch this calculation
The 2026 tax reform bill has 2 items bearing on this calculation, the earliest from 2026-12-31. None of it has passed the National Assembly, so the calculator still applies the law as it stands.
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