₩12M on cards and zero deduction — 25% of salary is the floor
The card-spending deduction starts only on spending above 25% of gross salary. On ₩50M that floor is ₩12.5M, so ₩12M gives nothing. Even above the floor, the floor is taken off the lowest-rate credit-card spending first. So the same ₩20M gives ₩1,125,000 if it is all credit card, but ₩2,250,000 if credit card covers the floor and debit card the rest. Twice as much.
Conditions used in the video
- Gross salary
- ₩50M
- Minimum spending (25%)
- ₩12.5M
- Rates
- credit 15% · debit/cash receipt 30% · market/transit 40%
- Cap
- ₩3M (salary ₩70M or less)
- Comparison
- ₩20M spent in the year
Results
- ₩12M, all credit card
- deduction ₩0
- ₩20M, all credit card
- ₩1,125,000
- credit ₩12.5M + debit ₩7.5M
- ₩2,250,000
- Amount above the floor
- ₩7.5M
- Difference
- 2×
At a glance
Salary ₩50M. The ₩12.5M floor is taken off the lowest rate first.
- ₩12M · all credit₩0
below the floor
- ₩20M · all credit₩1,125,000
₩7.5M × 15%
- ₩20M · credit 12.5 + debit 7.5₩2,250,000
₩7.5M × 30%
Why it works this way
Some people spend hard on cards for the year-end deduction and get zero. They did not spend too little. They were under the floor.
The provision.
조세특례제한법 제126조의2제1항.
- Minimum spending25% of gross salary (₩12.5M on ₩50M)
- Below it₩12M on cards, deduction ₩0
- Above itonly the excess is multiplied by the rate
The higher the salary, the higher the floor. On ₩80M you need to pass ₩20M before anything counts.
Passing the floor is not the end. The floor is then taken off the spending with the lowest rate first. That order decides the deduction.
Same article, paragraph 2(6). ₩20M spent.
- All credit card ₩20M₩20M − ₩12.5M floor = ₩7.5M × 15% = ₩1,125,000
- Credit ₩12.5M + debit ₩7.5Mthe floor consumes the credit card; debit ₩7.5M × 30% = ₩2,250,000
- Differencedouble
Use the credit card (with its discounts and points) up to the floor, and debit card or cash receipts for everything above it. That matches the order the article sets.
The cap is ₩3M at salary ₩70M or less, ₩2.5M above. Traditional markets, public transport and culture have separate extra caps. The calculator applies them.
One more thing: this is an income deduction, so the tax saved is the deduction times your rate. ₩2,250,000 in the 15% band saves about ₩340,000, about ₩370,000 with local tax.
In short: the card deduction starts above 25% of salary, the floor is taken off credit-card spending first, so switching the spending above the floor to debit doubles the deduction on the same amount.
The legal basis
Drawn from government announcements and the statutes themselves as primary sources, covering only the relevant part.
조세특례제한법 제126조의2제1항 (deduction for card spending)
In force In force (checked 2026-10-05) · applies to spending through 2028-12-31
Where a wage earner's annual card spending exceeds 25/100 of gross salary (the minimum spending), the excess multiplied by the deduction rate is deducted from wage income.
What this means
🔴 25% of gross salary is the floor. Below it, nothing.
Same article, paragraph 2 items 1, 2, 4, 5 (rates)
In force In force
Traditional market and public transport 40/100, debit cards and cash receipts 30/100, credit cards 15/100.
What this means
Debit and cash receipts are twice the credit-card rate.
Same article, paragraph 2 item 6 (order of deducting the minimum)
In force In force
The minimum spending is deducted in the order of credit-card spending, debit-card spending, then traditional market and public transport.
What this means
🔴 The floor eats the lowest-rate credit-card spending first, so debit spending above the floor keeps its full 30%.
Same article, paragraph 2 proviso (cap)
In force In force
Capped at ₩3M a year for gross salary of ₩70M or less and ₩2.5M above, with extra caps for traditional market, public transport and culture spending.
What this means
Basic cap ₩3M. The calculator applies the extra caps.
Run it on your own numbers
The calculator opens with these conditions already filled in. Change the figures and your own case comes straight out.
Open the Card Spending Deduction
Frequently asked
Salary ₩50M and ₩12M on cards. Really zero?
Yes. The minimum spending is ₩12.5M, so ₩12M is below the floor and nothing is eligible.
Should I avoid credit cards altogether?
No. Up to the ₩12.5M floor the deduction is zero anyway, so a credit card with good rewards costs nothing. Switch to debit or cash receipts for spending above the floor, which matches the deduction order.
Which spouse's card?
Only spending on your own cards counts for you. The lower earner has the lower floor, but the deduction is worth more at the higher earner's rate. Check with the calculator whether each of you clears the floor.
Does a ₩2,250,000 deduction cut tax by ₩2,250,000?
No. It reduces taxable income by that amount; in the 15% band that is about ₩337,500 of income tax, about ₩370,000 with local tax.
Do markets and transit count toward the floor?
Yes, but they are deducted last (credit, then debit, then market and transit), so their 40% survives as far as possible.
Results are estimates based on the inputs and on the rules as at the stated date. They may differ from a lender's actual assessment, and the rules change often. Take professional advice before any decision that matters.