Korea Freelancer 3.3% & Income Tax Refund Explained

Last updated: 2026-06-25

What is the 3.3%

Money earned by freelancers, instructors, designers, delivery riders, insurance agents, and others who work without being employed by a company is mostly classified as personal-service business income. When such income is paid, the payer (client or company) withholds the tax in advance and remits it to the government, which is called withholding. The withholding rate on personal-service business income is 3% income tax, plus a local income tax equal to 10% of that income tax — 0.3% — for a combined 3.3%.

For example, on a 1,000,000-won job, 30,000 won of income tax, 3,000 won of local income tax, and 33,000 won in total are withheld, and 967,000 won is deposited. In other words, the net take-home is 96.7% of the payment. Conversely, if you received 967,000 won net, the gross payment back-calculates to 967,000 ÷ 0.967 = about 1,000,000 won. You can check this both ways in the 3.3% withholding tax calculator.

3.3% is not your full tax

This is exactly what many freelancers misunderstand. The 3.3% does not finish the tax on that job; it is only a prepayment (prepaid tax) toward your annual tax. Your actual tax sums all of the year's income, subtracts the expenses spent to earn it and various deductions, then applies progressive rates. So the 3.3% withheld can be more, or less, than each person's actual tax.

The procedure that reconciles this difference is the comprehensive income tax return. Every year from May 1 to May 31 you report the prior year's income (Jan–Dec); if you prepaid more, you get the difference back (refund), and if you prepaid less, you pay more.

How income tax is structured

Income tax is calculated in the following order. Lowering the amount at each step lowers your final tax.

• Income — total income received over the year (the gross total before 3.3% was withheld)
• Net income = income − business expenses
• Tax base = net income − income deductions (personal and dependent deductions, national pension, etc.)
• Computed tax = tax base × progressive rate − progressive deduction
• Determined tax = computed tax − tax credits + local income tax (10% of computed tax)
• Refund / balance due = prepaid tax (3.3%) − determined tax

Progressive rates do not multiply the whole tax base by one rate; they apply different rates by bracket. The progressive deduction is used to simplify this calculation. For example, with a tax base of 30M won (the 15% bracket), computed tax = 30M × 15% − 1.26M = 3.24M won.

Who gets a refund, and how much

Whether you get a refund comes down to comparing the size of the 3.3% prepaid with your actual determined tax. The 3.3% is applied to your entire income, but your actual tax applies progressive rates to the tax base after subtracting all expenses and deductions. So the larger your expenses and deductions, the lower your actual tax and the more likely a refund.

Here is a concrete example. A freelancer with 20M won of annual income has 660,000 won withheld as 3.3% over the year. With 6M won of business expenses and 1.5M won of income deductions, the tax base is 12.5M won; in the 6% bracket the computed tax is 750,000 won, and adding 75,000 won of local income tax gives a determined tax of about 825,000 won. Since that exceeds the 660,000 won prepaid, you pay about 165,000 won more. But with the same income and 12M won of expenses, the tax base drops to 6.5M won, the determined tax becomes about 429,000 won, and subtracting from 660,000 won leaves a refund of about 231,000 won.

In short, the key to a refund is claiming every eligible expense. To check your own refund or balance due right away, use the freelancer income tax & refund calculator.

Cutting tax with expenses and deductions

Business expenses are the costs actually spent for the business. They include materials, rent, communications, transport, outsourcing, advertising, office supplies, business software subscriptions, and more. To have them recognized, keep evidence such as tax invoices, credit card sales slips, and cash receipts.

If you keep books, your actual expenses are recognized as-is. Without books, expenses are estimated using the industry simplified or standard expense rate: below a certain income threshold you get a relatively high simplified rate, while above it the standard rate and bookkeeping obligations apply. As income grows, keeping books is usually more favorable.

Do not skip income deductions either. The personal and dependent deductions (1.5M won per person), national pension and mutual-aid contributions, and some insurance premiums lower your tax base. There are also tax credits (standard credit, child credit, etc.) that subtract directly from the computed tax, so your actual tax can be even lower than this calculator's estimate.

Filing schedule and cautions

The deadline to file and pay comprehensive income tax is May 31 each year (June 30 for those subject to honest-filing verification). Missing the deadline triggers a non-filing penalty and a late-payment penalty, so always file on time. Refunds are usually deposited within about a month after filing.

Note that all figures in this guide and the calculators are reference estimates based on the progressive rate structure. Your actual tax varies with tax credits, additional deductions, other combined income, and any penalties. Confirm accurate filing and tax-saving strategies with the National Tax Service Hometax or a tax professional.

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Last updated: 2026-06-25