₩20M of financial income is a door, not a cliff — ₩264,000 of tax for going ₩1M over
Interest and dividends are withheld at 15.4% when paid, and up to ₩20M a year that is the end of it. Above the line, only the excess is combined with other income. With ₩50M of other income, ₩20M of financial income gives ₩9,944,000 of tax and ₩21M gives ₩10,208,000, so going ₩1M over costs ₩264,000. The excess ₩1M lands in the 24% bracket, 26.4% with local income tax.
Conditions used in the video
- Case A
- ₩50M of other comprehensive income · financial income ₩20M → ₩21M
- Case B
- no other income · ₩30M of financial income
- Withholding
- 14% income tax + local income tax = 15.4%
- Threshold
- ₩20M a year · per person (not per household or couple) · by year received
Results
- Case A, extra tax for going ₩1M over the line
- ₩264,000
- Case A, total tax
- ₩20M financial: ₩9,944,000 → ₩21M: ₩10,208,000
- Rate on the excess ₩1M
- 24% bracket + local income tax = 26.4% (₩110,000 per ₩1M above the original 15.4%)
- Case B, comparative taxation
- combined ₩3.4M < withheld ₩4.2M → ₩4.2M (₩4.62M with local income tax)
- Weight beyond tax
- above ₩20M a year: loss of health insurance dependent status · May comprehensive return required
Why it works this way
You have probably heard that interest and dividends above ₩20M mean a tax bomb. Someone who received ₩21M paid ₩264,000 more.
Case: ₩50M of other income · financial income ₩20M → ₩21M.
- Up to ₩20Mends with 15.4% withholding
- Excess ₩1M24% bracket + local income tax = 26.4%
- Total tax₩9,944,000 → ₩10,208,000 · difference ₩264,000
If the combined calculation is less than the amount withheld, you pay the withheld amount. That is comparative taxation.
Any increase applies only to the excess. The real weight is health insurance: above ₩20M a year you lose dependent status, and you must file a comprehensive income return in May.
The legal basis
Drawn from government announcements and the statutes themselves as primary sources, covering only the relevant part.
Income Tax Act Article 14(3)6 · Article 62 (Comprehensive taxation of financial income · Comparative taxation)
In force Current (checked 2026-09-05)
Where interest and dividends total ₩20M or less, taxation ends with 14% withholding. Above that, the excess is taxed comprehensively, but if the comprehensive tax is less than the withheld amount, the withheld amount applies.
What this means
Crossing the threshold affects only the excess. The tax does not fall, but it is no bomb either.
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 Financial Income Tax Calculator
Frequently asked
Does a higher rate apply to everything above ₩20M?
No. Up to ₩20M ends with 15.4% withholding; only the excess is combined with other income and taxed at progressive rates.
What is comparative taxation?
A rule comparing the combined calculation with the withheld amount and charging the larger. Combining never reduces the tax.
Why is health insurance the issue?
Above ₩20M a year you lose dependent status under a workplace member and pay regional premiums separately. That weighs more than ₩264,000 of tax.
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.