Korean Monthly Rent Tax Credit Calculator

This calculator shows how much tax an employee who rents a home in Korea gets back at year-end settlement. Enter the monthly rent, your gross salary and the number of months you actually lived there, and you get the rent that qualifies, the credit rate and the credit amount. Enter your computed tax as well and the calculator applies the rule that the credit cannot exceed it, showing the tax that actually falls.

This is a tax credit, not a deduction. A deduction reduces the income to which the rate is applied; a credit is taken straight off the tax after it has been calculated. That makes ₩1 million of credit worth far more than ₩1 million of deduction. It is not refundable, though: it never returns more than you owe, so someone who pays little tax gets less than the full amount.

Mostly in January and February, when year-end settlement documents are being prepared. Knowing how much comes back before you hand the rent paperwork to your employer is what makes the paperwork worth gathering, and it gives you a figure to use when talking to the landlord. Anyone weighing a move can plug in a different rent and compare the real cost after tax.

It is especially useful near the salary thresholds. Gross salary up to ₩55 million earns 17%, above that up to ₩80 million earns 15%, and above ₩80 million there is no credit. In the year a raise carries you past the limit the whole credit disappears, so it pays to see that coming.

The rule is 조세특례제한법 제95조의2. An employee with no home and a gross salary of ₩80 million or less, paying rent on a home within the national housing size or below a set assessed value, may credit 17% of the year's rent if gross salary is ₩55 million or less and 15% otherwise, on rent up to ₩10 million a year. Officetels and gosiwons qualify. The address on the lease must match your resident registration, so you must have registered your move; a fixed-date stamp is not required.

The steps are these. Monthly rent times the months you lived there gives the year's rent, cut off at ₩10 million if it goes higher. Your gross salary sets the rate, and multiplying gives the credit available. If you entered your computed tax, the credit is then capped at that figure and the part cut off is shown separately as the amount lost because your tax was too small. Leaving computed tax at zero skips that last step.

Suppose an employee on a gross salary of ₩50 million pays ₩600,000 a month and lived there all year. The year's rent is ₩7.2 million, inside the ₩10 million ceiling. Gross salary is within ₩55 million, so the rate is 17% and the credit is ₩1,224,000. In effect 17% of the rent paid comes straight off the tax bill.

If the same person's computed tax is only ₩800,000, the picture changes. The credit available is still ₩1,224,000, but the tax is smaller than that, so the actual credit stops at ₩800,000 and ₩424,000 cannot be used. This happens often to people whose tax has already been cut by dependant and other credits.

Submitting the paperwork without having registered your move is the first. If the lease address and your resident registration differ, the credit is refused. The second is a household member claiming under the head of household's name, or assuming you have no home when your spouse owns one; home ownership is judged for the household as a whole. The third is paying rent in cash with no record. You need proof of payment, such as bank transfer records or cash receipts.

Confusing gross salary with total annual pay is also common. Gross salary excludes non-taxable pay and can be smaller than the headline figure, which sometimes brings you inside a threshold. And a missed year is not lost: rent left out of year-end settlement can be claimed later through the May income tax return or a request for correction. Finally, this calculator handles your own rent only; it does not compute the case where rent paid by a spouse is combined.