Korean Monthly Take-Home Pay Calculator

Your annual salary divided by twelve is not what lands in your account. Before paying you, your employer withholds your share of the four social insurances (national pension, health, long-term care and employment) and withholds income tax and local income tax on behalf of the state. Enter your gross monthly pay, the tax-free part of it and the number of dependants, and the calculator shows what comes out, item by item, and what actually arrives.

The income tax shown is withholding, not a final assessment. Employers deduct a rough monthly amount from the simplified tax table published by the National Tax Service, and the real tax is settled the following year at the year-end settlement once your deductions are applied. If the monthly deductions exceed the real tax you get a refund; if they fall short you pay the difference. The figure here answers "how much hits my account each month", not "how much tax do I owe".

People who have received a salary offer and are about to start or change jobs. Knowing the gap between the salary the company quotes and the money you can spend each month is what makes a rent and living-cost plan work. Anyone surprised by a first payslip that looks smaller than expected can see from the breakdown where it went.

It is also for people whose family situation has changed. Marrying and adding a spouse as a dependant, or having a child, shifts you to a different column of the simplified table and lowers the monthly withholding. You can check how much changes before updating your dependant declaration with payroll.

Each social insurance has its own statute setting the rate. Under 국민연금법 the national pension takes 9.5% of the standard monthly income, split equally between you and your employer, so your share is 4.75%; this rate is in a phase of annual increases, so it changes with the year. Health insurance takes 7.19% of monthly pay split equally, 3.595% for you; long-term care insurance 0.9448% split equally; and the unemployment benefit part of employment insurance 1.8% split equally. The pay these apply to excludes tax-free allowances.

Income tax is withheld monthly under 소득세법 제134조 using the simplified tax table. The table sets an amount by monthly pay net of tax-free items and by the number of dependants including yourself, with a further fixed reduction for each child aged 8 to 20. Below ₩770,000 a month there is no withholding. Local income tax under 지방세법 제103조의13 is 10% of that income tax. The sequence is: subtract tax-free pay from gross to get taxable pay; compute your share of the four insurances on it; look up the income tax in the table and add local income tax; then subtract all insurance and tax from gross pay.

Take gross monthly pay of ₩4,000,000 with a ₩200,000 tax-free meal allowance and no dependants other than yourself. Taxable pay is ₩3,800,000. Your share of the insurances is ₩180,500 for the pension, ₩136,610 for health, ₩17,951 for long-term care and ₩34,200 for employment insurance, ₩369,261 in total. The simplified table gives income tax of ₩169,260 for ₩3,800,000 with one dependant, and local income tax of ₩16,926 brings the tax to ₩186,186.

Insurance and tax together are ₩555,447, and taking that from ₩4,000,000 leaves net pay of ₩3,444,553, meaning 13.9% of gross is withheld. On the same pay with a spouse and one child, so three dependants, and that child aged 8 to 20, the insurance is unchanged but the tax falls sharply to ₩73,535 and net pay rises to ₩3,557,204.

The most common is including the tax-free meal allowance in taxable pay. The simplified table is looked up on pay net of tax-free items and the insurances are charged on the same basis, so including it inflates both tax and contributions. The second is leaving yourself out of the dependant count. You always count as one, so a person living alone enters 1.

The third is treating the tax shown as final. Once card spending, insurance premiums, medical costs and other deductions are applied at the year-end settlement, the real tax is usually lower and a refund follows. The fourth is thinking that changing the withholding ratio lowers your tax. You can ask your employer to withhold at 80% or 120% of the table, but only the monthly amount changes; the annual total is the same. Finally, the pension rate and the income ceiling change every year, so once the year turns it is worth checking the defaults in the social insurance calculator.