What KRW 20 Million Adds Together
It is not deposit interest counted on its own. It is the sum of interest income and dividend income received during the year, measured before tax is withheld.
Interest on deposits and installment savings, bond interest, stock dividends, and fund distributions are all included. Even when they are spread across several banks or securities firms, one person's financial income is added together. Spouses are not combined; each is judged separately.
Reaching KRW 20 million on deposit interest alone requires a considerable principal. At 2.5% per year (pre-tax) that is about KRW 800 million, and at 4.0% about KRW 500 million. If you also have dividends or other financial income, the required deposit falls accordingly.
Some financial income is left out of the calculation. Interest on which no income tax is imposed, such as tax-free comprehensive savings, is not counted toward comprehensive taxation of financial income. Interest from cooperative deposits is also excluded from the comprehensive income tax base. The limits of the two schemes add up to KRW 80 million, so interest earned within that range is excluded from the calculation.
Above the Threshold, the Calculation Splits in Two
Once financial income exceeds KRW 20 million, Article 62 of the Income Tax Act applies and the tax is calculated two ways. Whichever of the two results is larger becomes the applicable amount.
- First method — add the portion of financial income above KRW 20 million to other comprehensive income, apply the comprehensive income tax rates, and add 14% of KRW 20 million.
- Second method — apply 14% to the entire financial income and add the tax on other comprehensive income.
The second method applies 14% to the whole of the financial income, so it is close to the amount already withheld by the financial institution. Even if the first method produces a smaller figure, the actual tax does not fall below that level.
If financial income is KRW 20 million or less, it is not subject to comprehensive taxation. The 15.4% withheld by the financial institution settles the tax, and no separate comprehensive income tax filing is required on account of that financial income.
Calculated as tax base × rate − progressive deduction. Local income tax of 10% of the resulting income tax is added separately.
The Actual Increase by Size of Other Income
We calculated how much more tax a person with KRW 30 million in financial income pays depending on the size of their other income. Excluding the KRW 4.2 million already withheld by the financial institution and the tax they would have paid without the financial income, only the amount added because of the financial income is compared.
KRW 0
The additional income tax payable by someone with KRW 30 million in financial income and no other income.
The increase column is the calculated tax minus the KRW 4.2 million withheld on the financial income and the tax that would have been due without it. Based on comprehensive income before income deductions, with local income tax excluded.
With other income of KRW 50 million, the additional income tax caused by KRW 30 million in financial income is KRW 1 million. It is paid in the May filing, separately from the tax the financial institution already deducted. With other income of KRW 88 million it comes to KRW 2.1 million, and with KRW 150 million to KRW 2.4 million.
How Much It Rises With No Other Income
If there is no employment or business income to aggregate, the additional tax does not rise sharply even when financial income exceeds KRW 20 million.
Withholding is based on income tax of 14%. Local income tax of 1.4% is not included here.
With no other income, even KRW 80 million in financial income results in an additional payment of KRW 240,000. Crossing KRW 20 million does not mean the higher comprehensive income tax rates apply to the entire amount.
Filing and Other Changes
If financial income exceeds KRW 20 million, you must file comprehensive income tax between May 1 and May 31 of the following year. The filing obligation applies even when the calculation shows KRW 0 in additional tax.
When additional comprehensive income tax arises, individual local income tax must be calculated separately. Local income tax of 10% of the income tax is added. If the additional income tax in the calculation above is KRW 1 million, adding KRW 100,000 in local income tax brings the total to KRW 1.1 million.
Beyond tax, health insurance also needs to be considered. A health insurance dependent must meet an annual income requirement that combines business, financial, pension, other, and employment income. If rising financial income pushes you past the income threshold, you lose dependent status and are converted to a regional subscriber. In that case the increase in health insurance premiums can exceed the increase in tax. The income and property requirements are set out in Rising Interest Can Cost You Health Insurance Dependent Status.
To avoid concentrating financial income in a single year, you can spread out the interest payment dates. Interest is treated as income of the year in which it is actually received, so setting the maturities of several deposits in different years also spreads the annual financial income.
Frequently Asked Questions
Is KRW 20 million before or after tax?
Before tax. The judgment is based on the amount before the financial institution withholds interest income tax of 15.4%. Adding up only what arrived in your account understates your financial income.
Is it assessed on a couple's combined income?
No. The threshold for comprehensive taxation of financial income applies per individual. A couple's financial income is not combined to test the KRW 20 million line. Health insurance dependent status, however, requires both spouses to meet the income requirement.
If I exceed it, is the entire KRW 20 million taxed comprehensively?
No. Only the portion above KRW 20 million is aggregated with other comprehensive income. Up to KRW 20 million, 14% is applied. If financial income is KRW 30 million, the amount aggregated with other income is KRW 10 million.
If the additional tax is KRW 0, can I skip filing?
Filing is still required. Once financial income exceeds KRW 20 million, you must file comprehensive income tax regardless of the actual additional payment.
What happens to the tax already withheld?
Tax withheld by the financial institution is credited as prepaid tax when you file. You do not pay it again; you pay only the balance remaining after subtracting the withheld amount from the tax calculated under comprehensive taxation.
What if I do not exceed KRW 20 million?
Interest and dividends are settled by the 15.4% withheld by the financial institution. They are not included in comprehensive taxation of financial income either. The rate structure is set out in Interest Income Tax 15.4%.
Sources and basis
- Threshold for comprehensive taxation KRW 20 million — 국세청 (the National Tax Service) guidance on financial income taxation
- Special provision for tax calculation — Income Tax Act Article 62
- Withholding tax rate on interest income 14% — Income Tax Act Article 129 (1) 1 (d)
- Comprehensive income tax rates — 국세청 comprehensive income tax rate table
- Health insurance dependent income requirement — 국민건강보험공단 (the National Health Insurance Service)
- Calculation conditions — based on comprehensive income before income deductions, local income tax excluded
Tax law and health insurance criteria are subject to change. The law was verified on August 8, 2026.