The following overview presents a precise breakdown of South Korea’s individual income tax framework for 2025, including the latest tax brackets, applicable local surtaxes, and essential considerations for personal tax planning.
Overview of Individual Income Tax in South Korea (2025)
South Korea applies a progressive individual income tax system, with rates increasing in line with taxable income. The assessment basis for these taxes is an individual’s total income earned within the tax year, and all amounts are reported in South Korean Won (KRW). Below is a detailed summary of the 2025 income tax brackets, rates, and the additional local surtax required by law.
2025 South Korea Individual Income Tax Brackets
| Taxable Income Bracket (KRW) | Approximate USD Equivalent* | Marginal Tax Rate |
|---|---|---|
| Up to 14,000,000 | Up to $10,350 | 6% |
| 14,000,001 – 50,000,000 | $10,351 – $36,970 | 15% |
| 50,000,001 – 88,000,000 | $36,971 – $64,950 | 24% |
| 88,000,001 – 150,000,000 | $64,951 – $110,720 | 35% |
| 150,000,001 – 300,000,000 | $110,721 – $221,440 | 38% |
| 300,000,001 – 500,000,000 | $221,441 – $369,070 | 40% |
| 500,000,001 – 1,000,000,000 | $369,071 – $738,150 | 42% |
| Over 1,000,000,000 | Over $738,150 | 45% |
*USD equivalents based on an exchange rate of 1 USD = 1,353 KRW for illustrative purposes.
Local Income Tax Surtax
In addition to the central progressive income tax, South Korea levies a mandatory local income tax. For 2025, this is charged at 10% of the calculated personal income tax (PIT) for all individual taxpayers. The application of this local surtax is automatic and should be included in any effective tax rate calculation.
| Type | Rate | Application |
|---|---|---|
| Local Income Surtax | 10% of PIT | Applies to all taxpayers, calculated after national PIT is determined |
Progressive Rate Structure Explained
South Korea’s progressive system means that different portions of your income are taxed at different rates. For example, the first 14,000,000 KRW of taxable income is taxed at 6%, the next portion up to 50,000,000 KRW at 15%, and so forth, with the maximum marginal rate of 45% applying to income over 1,000,000,000 KRW. The local surtax is then calculated on top of the total PIT due. This approach ensures those earning higher incomes contribute an increasingly substantial portion of earnings as tax, a feature typical of mature OECD economies.
Surtax and Total Effective Rates
The 10% local surtax effectively increases your final tax liability above the headline national progressive rates described above. For example, a highest marginal rate of 45% becomes an effective rate of 49.5% when the local surtax is added on income over 1 billion KRW.
Assessment Basis and Notable Omissions
The assessment basis for South Korean personal income tax is comprehensive income. Data about special holding periods or required minimum periods for particular income types is not provided in the current summary, indicating either no broadly applicable minimum holding period for mainstream employment or business income, or that such information is not standard in government releases. Such details may be relevant for specific asset classes but are not part of the standard PIT framework for 2025.
Pro Tips for South Korea’s Personal Income Tax (2025)
- Review your total taxable income across all sources, as even minor increases could move you into a higher tax bracket, affecting your effective rate.
- Don’t overlook the local income tax surtax—factor it into your year-end tax planning to avoid underestimation of total liability.
- If your expected income approaches a new threshold bracket, consider timing discretionary income (such as bonuses or capital gains) to smooth tax impact across years.
- Maintain comprehensive records of income and deductions, which will simplify compliance and can help clarify residency status if required by authorities.
Further Resources
For official guidelines and updates on South Korea’s tax code or to access the latest forms, visit the National Tax Service (NTS) Korea.
South Korea’s 2025 personal income tax system features a classic progressive structure, enhanced by a mandatory local surtax that pushes top effective rates notably higher. Make sure total tax calculations always account for both national and local levies. Nuances such as bracket thresholds and surtaxes can have substantial impacts for higher income earners. Staying current with official sources and maintaining good documentation will ensure smooth compliance and optimal results for international professionals or those with variable incomes.