Korean Take-Home Pay: What Comes Out of Your Salary
A practical guide to Korean payroll deductions, including social insurance, income tax, local tax and tax-exempt allowances.
- Annual salary divided by 12 gives monthly gross pay, not the bank deposit.
- Social insurance comes out first, followed by earned-income tax and local income tax.
- Tax-exempt allowances and family information explain many gaps between a calculator and a real payslip.
A Korean offer of ₩36 million a year does not mean ₩3 million will arrive every month. ₩3 million is only the gross starting point. Payroll then removes social insurance and tax, while the contract may place bonuses or severance outside—or inside—the quoted package.
Read the package before calculating net pay
- Annual base salary
- Number of regular payments
- Whether bonuses are fixed or variable
- Whether statutory severance is quoted separately
A package paid in 12 equal instalments is straightforward. A package with fixed bonuses or severance included can produce a lower regular monthly salary even before deductions.
What comes out of a Korean paycheck in 2026
| Deduction | Employee rule | What changes it |
|---|---|---|
| National Pension | 4.75% | Standard monthly income and ceiling |
| Health insurance | 3.595% | Monthly remuneration |
| Long-term care | 13.14% of health premium | Calculated health premium |
| Employment insurance | 0.9% | Insurable remuneration |
| Earned-income tax | Payroll withholding table | Taxable pay and family information |
| Local income tax | 10% of earned-income tax | National tax withheld |
Use this calculation order
- Find monthly gross cash paySeparate regular salary from bonuses and non-cash benefits.
- Identify exempt allowancesEligible items may reduce taxable pay and an insurance base.
- Calculate each insurance separatelyDo not apply one combined percentage to every won.
- Estimate earned-income taxUse the simplified table with the correct dependents and children.
- Add local income taxThis is normally 10% of the earned-income tax withheld.
Why tax-exempt allowances change take-home pay
Two offers with the same headline salary can produce different deposits when one includes a qualifying meal allowance or another exempt item. The difference can affect both tax and, depending on the payment, a social-insurance base. A payroll label alone does not make an allowance tax-free; it must meet the legal conditions.
Why a calculator and payslip still disagree
Employees can choose withholding at 80%, 100% or 120% of the simplified-table amount. Bonuses, a mid-year start, contribution support and retroactive corrections also move the result. The year-end settlement later reconciles what was withheld with the final tax position.
Frequently asked questions
Is annual salary in Korea quoted before or after tax?
Employment offers normally quote gross annual salary before social insurance and tax. Check whether severance pay and bonuses are included.
Why do two employees on the same salary receive different net pay?
Dependents, children, tax-exempt allowances, withholding preference and insurance bases can all change the monthly deposit.
Is monthly withholding the final tax?
No. The year-end tax settlement reconciles monthly withholding against the employee’s final deductions and credits.