Business income 3.3%: 3% income tax plus 0.3% local income tax (10% of the income tax) is withheld at payment. It applies to continuous or repeated work such as freelancing.
Other income 8.8%: for one-off lecture, writing or review fees, 60% of the payment is treated as expenses. The remaining 40% is taxed at 20% plus 2% local tax, which comes to 8.8% of the payment.
If the income tax is under ₩1,000, nothing is withheld. Other income of ₩50,000 or less per payment (payments up to ₩125,000) is not taxed.
Tax amounts drop anything under ₩10. To hit an exact take-home figure, use the take-home to contract amount option.
FAQ
How much do I receive from ₩1,000,000 after 3.3%?
₩30,000 of income tax and ₩3,000 of local income tax are withheld, so you receive ₩967,000.
What contract amount gives me exactly ₩1,000,000?
₩1,034,120 for 3.3% business income, or ₩1,096,480 for 8.8% other income.
Can I get the 3.3% back?
If more was withheld than your actual tax, you get the difference back when you file in May the next year. If less was withheld, you pay the rest. Lower income and higher expenses make a refund more likely.
Worked example
Example: a ₩3 million design payment has ₩90,000 of business income tax and ₩9,000 of local tax withheld, so ₩2,901,000 arrives. If the same ₩3 million is a one-off lecture fee (other income), 60% (₩1.8 million) is expenses, and 20% on the remaining ₩1.2 million gives ₩240,000 of income tax and ₩24,000 of local tax, so you receive ₩2,736,000. To take home exactly ₩3 million, contract ₩3,102,380 for business income or ₩3,289,480 for other income.
Common mistakes
Treating repeated work as 8.8% other income can be reclassified as business income later, which changes the tax.
The 3.3% is only an advance payment. Without a May return you cannot get a refund.
Other income above ₩3 million a year must be included in the May return.
Tax drops amounts under ₩10, so results can differ by a few won from payment × 0.967.