3.3% Is Two Taxes Combined
Under article 129 of the Income Tax Act, business income subject to withholding carries income tax of 3%. Individual local income tax of 0.3%, being 10% of the income tax, is added on top, making the rate actually withheld 3.3%.
On a payment of KRW 1 million, income tax of KRW 30,000 and local income tax of KRW 3,000 come to KRW 33,000 withheld.
This method is widely used when freelancers and providers of personal services are paid for their work. Income from independently supplied services such as writing, design, composition, lecturing, and performance is typical.
Being a freelancer does not mean 3.3% applies to every receipt, though. The income classification and the filing method can differ with the actual contractual relationship and the form of the business.
Net Receipts by Payment
Since 3.3% comes off the contracted amount first, what reaches the account is slightly less.
KRW 9,670,000
What is actually deposited on a payment of KRW 10 million, after KRW 330,000 is withheld.
Withholding is handled by the party making the payment. The payer withholds and remits the tax first and submits a payment statement.
3.3% applies at the same rate to any payment, so the calculation is the same on KRW 3 million as on KRW 30 million. A larger payment raises the amount withheld in the same proportion.
The global income tax actually borne is not fixed at 3.3%, though. The final tax is recalculated at the filing the following May.
The Actual Tax Is Recalculated in May
The 3.3% withholding is tax taken first on the amount received. Costs incurred in doing the work and the various deductions are not reflected at that stage.
A freelancer's actual income is calculated by subtracting recognized necessary expenses from revenue. Where equipment was bought for the work, or a studio rented, or work-related travel paid for, costs meeting the requirements can be reflected as necessary expenses.
Applying the various deductions and the rate to the income so calculated, then subtracting the tax already withheld, is the global income tax filing.
The underlying principle resembles an employee's year-end settlement. Comparing tax paid in advance against tax actually calculated is the same; a freelancer usually files the global income tax return themselves the following May.
Where necessary expenses are large or the final income figure modest, more may already have been paid and a refund can arise. Where the income figure grows, or other global income is present alongside, 3.3% may fall short and a further payment can arise.
The table is a simple calculation reflecting only the KRW 1.5 million basic allowance. Other personal allowances and tax credits are not included, and tax already paid is calculated on income tax of 3% alone. Local income tax is settled separately.
On the same KRW 30 million of revenue, the final tax differs substantially between necessary expenses of KRW 9 million and KRW 21 million. Where costs were genuinely used for the work, keeping the evidence so they can be reflected at filing matters.
What Differs From an Employee
Employees and freelancers calculate and settle income differently.
Employees receive a set earned income deduction based on salary. Freelancers reflect costs genuinely incurred in connection with the business as necessary expenses.
That makes it important to keep receipts and transfer records for work-related spending. Without evidence, money genuinely spent can be hard to have recognized as a necessary expense.
Keeping a work account or card separate from living expenses also makes spending easier to check at filing. Where personal and work spending sit in one account, they have to be separated afterward one by one.
Not every freelancer records actual expenses in books and files on that basis. Depending on whether books are kept and the scale of revenue, filing may use the standard or simplified expense rate.
Where there is freelance income alongside a job, employment income and business income may have to be filed together. Even where the employer ran the year-end settlement on employment income, freelance business income calls for a separate global income tax filing the following May.
Tax already paid on employment income and tax withheld from freelance receipts are both reflected as tax already paid. The final rate and any further payment follow from the two incomes combined.
Frequently Asked Questions
What tax is the 3.3%?
Income tax of 3% plus local income tax of 0.3%. It is withheld and remitted when business income subject to withholding is paid.
Does the 3.3% end my tax?
No. The 3.3% is tax paid in advance. The final tax is calculated at the global income tax filing the following May, with actual income and necessary expenses applied.
Does having 3.3% withheld always mean a refund?
Not necessarily. The difference comes back only where the tax already paid exceeds the final tax. With high income or few necessary expenses, more may be payable instead.
What happens if I don't file?
Even where a refund is due, not filing can mean not receiving it. Conversely, not filing where further tax is due can attract penalty tax.
How do necessary expenses get recognized?
They have to be costs genuinely used for the business or the work, and keeping the related evidence is advisable. Receipts, card statements, and transfer records are used at filing.
What if I have freelance income alongside a job?
Employment income is settled by the employer at year end, and freelance business income is aggregated with it and settled at the global income tax filing the following May.
Do I file global income tax every month?
The withholding filing when a freelancer is paid is done by the payer. A freelancer usually gathers the previous year's income and files global income tax the following May.
Where do I check how much was withheld?
Submitted records such as payment statements can be checked on 국세청 홈택스 (Hometax). Where income came from several sources, the records for each payer can be checked together.
Do I need to register as a business?
Having 3.3% withheld does not by itself settle whether business registration is required. The obligation has to be checked separately against the actual form of the business, its continuity and repetition, and the sector.
Can a high income mean paying more?
Yes. Global income tax rates vary with taxable income, so where the final calculated tax exceeds what was already withheld, the difference is paid.
Sources and basis
- Rate on business income subject to withholding — Income Tax Act article 129, 3 hundredths
- Local income tax of 0.3% — Local Tax Act article 103-13, 10 hundredths of the income tax withheld
- Personal services subject to withholding — 국세청 guidance on business income subject to withholding
- Global income tax filing — May 1 to 31 the following year, with tax already paid credited
- Global income tax rates — 국세청 rate schedule
- Calculation basis — revenue of KRW 30 million, only the KRW 1.5 million basic allowance reflected, local income tax separate
Tax law is subject to amendment. The law was verified on August 9, 2026.