Do foreign workers in Korea have to do year-end tax settlement?

The Income Tax Act makes the employer (withholding agent) settle the tax of wage earners when it pays February wages of the next year. You help by giving the employer your deduction report before that pay.

When is the year-end settlement done?

When February wages of the following year are paid, or on the last day of February if February pay is not paid by then. If you leave, it is done when the pay for the month you leave is paid.

Do I need to file a tax return in May?

A resident with only wage income may skip the final return under Article 73, but wages from two or more payers are treated differently (Article 73(2)). Ask NTS if you had two employers.

What if I owe extra tax after the settlement?

If the additional tax is above KRW 100,000, the employer may split it across the February, March and April pay.

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Year-end tax settlement in Korea for foreign workers: who does it, the February timeline and which deductions you can use

Numbers checked against the official source on 2026-10-19

In Korea the employer settles your income tax for the year, not you. Under the Income Tax Act the employer (the withholding agent) withholds tax from each month's pay and then does the year-end settlement when it pays your February wages of the following year (or on the last day of February if February pay is not made by then), and also when you leave in the month of leaving. To have deductions counted you hand the employer a deduction report before you receive that February pay. If your only income is wages and the settlement is done, the law lets you skip the May income tax return. This page follows the law text; NTS's English foreigner guide is a PDF we did not use.

Feb wagesyear-end settlement is made when February pay is paid

Before Feb paydeadline to give the employer your deduction report

KRW 100,000extra tax above this can be split over Feb to Apr pay

10 Marchemployer's wage payment statement due

Law text: Income Tax Act (소득세법), shown on the National Law Information Center as "[시행 2026. 1. 1.] [법률 제21221호, 2025. 12. 23., 일부개정]" (in force 2026-01-01). Read on 2026-10-19. Not tax advice: confirm with the National Tax Service (NTS) or your employer's payroll team.

Who this applies to

Employees paid wages in Korea by an employer that withholds tax. The employer is the one who must do the settlement (Article 137: "원천징수의무자는 ... 연말정산").
Resident or non-resident. Article 1-2 defines a resident ("거주자") as an individual who has a domicile in Korea or has had a residence ("거소") in Korea for 183 days or more; anyone else is a non-resident. The detailed test for domicile and residence is set by presidential decree.
Daily workers are different. The deduction-report rule (Article 140) does not apply to daily workers, and their tax is withheld when paid under a separate rule in Article 134(3).
If you choose the flat 19% rate for foreign workers, see the flat 19% income tax page.

Timeline

Every month: withholding. When your employer pays monthly wages, it withholds income tax using the simplified wage tax table (Article 134(1)).
Before the February pay of the next year: submit the deduction report. To get income deductions and tax credits in the settlement you must give the employer the "income and tax credit deduction report" (근로소득자 소득ㆍ세액 공제신고서) before you receive that February pay; if you left, before you receive pay for the month you left (Article 140(1)). The employer of your main workplace passes the details to the tax office and tells your secondary employer (Article 140(2)).
February pay: settlement. Your employer works out your tax for the full year, applies the deductions you reported, subtracts the tax already withheld plus the credits, and either collects the balance or refunds the excess (Article 137(1) and (2)). If February pay is not paid by the end of February, or there is none, the settlement happens on the last day of February (Article 134(2)).
If you owe more than KRW 100,000. The employer may split the additional tax and withhold it from the February, March and April pay (Article 137(4)).
If you did not submit the report. The employer can apply only your own basic deduction and the standard tax credit (Article 137(3)).
By 10 March: employer files the payment statement. The payer files a wage payment statement (지급명세서) with the tax office by 10 March of the year after the payment (Article 164(1)).
May: usually nothing more to file. A resident with only wage income may skip the final income tax return (Article 73(1) item 1). Article 73(2) says this exemption does not apply to someone paid wages by two or more payers, with exceptions for certain settlements that leave no tax to pay (we did not read those cross-referenced articles). If you had two employers in the year, check with NTS whether you need a return.

When you leave Korea or change jobs

The same Article 137 settlement is made when the departing employee's last pay for the month of leaving is paid (Article 134(2) item 2). Give the deduction report before that last pay.

Which deductions are open to you

For residents, the Act lets the settlement apply, among others:

the basic deduction of KRW 1,500,000 per person for yourself, a spouse and dependents who meet the conditions (Article 50); and additional deductions of KRW 1,000,000 for someone aged 70 or over and KRW 2,000,000 for a person with a disability (Article 51);
the comprehensive income deductions you report to the employer (Article 137(1) item 1), and the tax credits Article 137 names: wage income tax credit, foreign tax credit, child tax credit, pension account credit and special tax credits.

Non-residents: some of these are not available. Where Article 121(2) or (5) applies (for example a non-resident with a place of business in Korea or Korean real-estate income, taxed on a combined basis), Article 122 says the resident rules apply except that these are not given: personal deductions for anyone other than the non-resident himself or herself, the special income deductions (Article 52), the child tax credit (Article 59-2) and the special tax credits (Article 59-4). A non-resident with no place of business in Korea is generally taxed separately by type of income under Article 121(3). Whether the year-end settlement applies to you as a non-resident employee is a case for NTS or your payroll team.

Where the sources are silent

This page prints no Hometax dates or document-upload dates; check Hometax for the current ones.
Deduction limits for insurance, medical, education, donations and rent are not copied here because we did not read those articles.

Official sources

National Law Information Center — Income Tax Act, Article 134 (when and how wage income tax is withheld) — monthly withholding; settlement at February pay or on leaving; in force 2026-01-01 (checked 2026-10-19)
National Law Information Center — Income Tax Act, Article 137 (year-end settlement) — how the settlement is calculated, refund of excess, KRW 100,000 split rule, no-report case (checked 2026-10-19)
National Law Information Center — Income Tax Act, Article 140 (deduction report) — report must be given before the February pay; not for daily workers (checked 2026-10-19)
National Law Information Center — Income Tax Act, Article 164 (payment statements) — wage income statement due 10 March of the following year (checked 2026-10-19)
National Law Information Center — Income Tax Act, Article 73 (exceptions to the final return) — wage income only: no final return; two-payer exception (checked 2026-10-19)
National Law Information Center — Income Tax Act, Article 1-2 (definitions) — resident = domicile or 183 days or more of residence (checked 2026-10-19)
National Law Information Center — Income Tax Act, Articles 50, 51 (basic and additional deductions) — KRW 1,500,000 per person; Article 51 adds KRW 1,000,000 (age 70+) and KRW 2,000,000 (disability) (checked 2026-10-19)
National Law Information Center — Income Tax Act, Articles 121, 122 (non-residents) — which deductions and credits are not given in combined taxation of non-residents (checked 2026-10-19)
National Tax Service (English) — Individual Income Tax and Benefit Guide for Foreigners 2026 — notice page only (PDF guide published 2026-04-30) (checked 2026-10-19)

Prices change. If an official page shows a different number from this page, the official page wins — and please tell us so we can fix it.

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