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In December 2022, South Korea’s National Assembly approved the 2023 Tax Reform Bill. The bill introduced reductions of one percentage point in each of South Korea’s four corporate income tax brackets.
See the 2023 CIT tax rates below:
South Korea has progressive rates of individual income tax. The 2023 Tax Reform Bill increased the personal allowance for employees on low to middle incomes.
Note that foreigners working in South Korea can opt to be taxed at a flat rate of 19% on income earned through employment in South Korea.
Employers make mandatory contributions towards South Korea’s national pension fund; national health insurance fund, and the employment insurance and industrial accident compensation funds. Taxes and mandatory contributions are deducted at source from monthly payroll.
|Contribution item||Contribution rate|
|National Pension Fund||4.5% (up to KRW 5.53M)|
|National Health Insurance||3.545%|
|Long Term Care Contribution||6.405%|
|Employment Insurance||1.05-1.65% (based on no. of employees)|
|Industrial Accident Compensation Insurance Variable based on industry||Min. 0.76%|
Employees in South Korea make mandatory contributions to the National Pension fund; the National Health Insurance fund; and Employment Insurance.
Employee contributions for 2023:
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The National Tax Service is responsible for collecting tax revenues in South Korea. The NTS is overseen by the Ministry of Economy and Finance.
Yes. Employers pay mandatory payroll taxes that go towards South Korea’s national pension fund; national health insurance fund, and the employment insurance and industrial accident compensation funds.
Payroll taxes and mandatory contributions are deducted at source from monthly payroll.