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Self-employed (sole proprietor) salary calculator - South Korea 2026

Free Self-employed (sole proprietor) salary calculator for South Korea (2026). Estimate gross-to-net take-home pay: income tax, social contributions and net salary. Educational, not tax advice.

Simon Bodych

by Simon Bodych

Methodology & sources

Methodology - South Korea (2026)

Educational model for calendar year 2026 - not a payroll system, not a tax return, not tax advice. The model assumes a single resident taxpayer with the basic personal deduction only and uses year-end settlement logic (annual amounts, flat monthly pay x 12), not the monthly simplified withholding table.

Employee (jeonggyujik, regular employment)

  • National Pension (NPS): the total contribution rate rises to 9.5% in 2026 under the 2025 pension reform (first increase since 1998; +0.5pp per year up to 13% in 2033). The employee pays 4.75%, the employer matches 4.75%. The base is the standard monthly income (gijun sodeuk wolaek), bounded between KRW 400,000 and 6,370,000 until June 2026 and between KRW 410,000 and 6,590,000 from July 2026 (the bounds index every July). The calendar-2026 model blends both halves into annual bounds of KRW 4,860,000 - 77,760,000.
  • National Health Insurance (NHI): 7.19% of pay in 2026 (raised 1.48% after a three-year freeze), split equally - employee 3.595%, employer 3.595%. The premium ceiling for very high salaries is out of scope.
  • Long-term care insurance (LTC): 0.9448% of pay in 2026, defined as 13.14% of the NHI premium, split equally between employee and employer.
  • Employment insurance (EI): unemployment-benefit account 0.9% employee + 0.9% employer (unchanged since July 2022). The employer additionally pays the employment stability / vocational ability development levy of 0.25% to 0.85% by firm size; the model uses the smallest band (0.25%). Industrial accident insurance is employer-only and industry-rated (2026 average 1.47%, kept at the 2025 level) - shown as a note, not added to the employer total.
  • Income tax (year-end settlement logic): total salary minus the earned income deduction (Art. 47 Income Tax Act: 70% / 40% / 15% / 5% / 2% bands, capped at KRW 20,000,000), minus the basic personal deduction of KRW 1,500,000 (Art. 50), minus the pension premium deduction (employee NPS, Art. 51-3) and the special income deduction for NHI + LTC + EI premiums (Art. 52). The resulting base is taxed on the progressive scale of Art. 55 (unchanged since 2023): 6% to 14M, 15% to 50M, 24% to 88M, 35% to 150M, 38% to 300M, 40% to 500M, 42% to 1,000M, 45% above.
  • Earned income tax credit (Art. 59): 55% of the computed tax up to KRW 1.3M, then 715,000 + 30% of the excess, capped by total salary - 740,000 (to 33M), sliding to 660,000 (33-70M), 500,000 (70-120M) and 200,000 (above 120M). Local income tax adds 10% of the national income tax (Local Tax Act).
  • The standard tax credit (KRW 130,000) is NOT applied because the model claims the insurance-premium special income deduction instead - the two are mutually exclusive.
  • Out of scope: dependants, child / pension-account / insurance / medical / education / donation / monthly-rent tax credits, non-taxable pay items (meal allowance and similar), the NHI premium ceiling, and the won-level statutory rounding of each levy. Minimum wage 2026: KRW 10,320 per hour, KRW 2,156,880 per month at 209 hours - anchor only.

Sources: MOHW - 2026 health insurance rate 7.19%, MOHW - 2026 long-term care insurance rate 0.9448%, Korea.kr - 2026 pension reform (rate 9.5%), NPS - pension contributions and the standard monthly income, NTS - global income tax rates (Art. 55), MOEL - minimum wage 2026 (KRW 10,320/hour), MOEL - 2026 average industrial accident rate 1.47%.

Freelancer 3.3% (personal-service income with withholding)

  • Independent workers providing personal services (the "3.3% freelancer") have 3% national income tax withheld by the payer (Art. 129(1)3 of the Income Tax Act) plus local income tax of 10% of that amount, i.e. 0.3% - together 3.3% of gross pay. There is no employer social insurance in this arrangement.
  • The withholding is an advance, not a final tax. The freelancer must file the global income tax return in May of the following year; the progressive 6-45% scale (+10% local income tax) on actual profit is then reconciled against the amounts withheld - typically a refund at low incomes and an additional payment at high ones.
  • The estimated May settlement in this model uses the simple expense rate (dansun gyeongbiyul) of 64.1% for typical personal services (NTS business code 940909 family): estimated profit = revenue x (1 - 0.641), minus the basic personal deduction of KRW 1,500,000, then the progressive scale plus 10% local tax. PROVISIONAL: each tax year's expense rates are confirmed by the NTS the following spring; 64.1% is the latest confirmed value.
  • The simple expense rate broadly requires prior-year revenue below KRW 36,000,000 for withheld personal-service income (Enforcement Decree of the Income Tax Act, Art. 143(4)). Above that, the standard expense rate (gijun gyeongbiyul) or bookkeeping applies and real expenses decide - the calculator flags revenue above the limit instead of hiding the estimate.
  • Social insurance as a locally insured person (NPS at the full 9.5% on declared income, NHI as a local subscriber) is owed separately and is out of scope of this mode - see the self-employed mode for that model.
  • Out of scope: dependants, all other deductions and credits, and VAT (exempt personal services assumed).

Sources: Income Tax Act, Art. 129(1)3 (law.go.kr), NTS - global income tax rates (Art. 55), NTS Hometax - simple / standard expense rate lookup (code 940909).

Self-employed (gaein saeopja, sole proprietor)

  • Profit = revenue minus expenses. Global income tax: profit minus the basic personal deduction of KRW 1,500,000 (Art. 50) and the pension premium deduction for own NPS contributions (Art. 51-3), then the progressive 6-45% scale (Art. 55) plus local income tax of 10% of the national tax.
  • National Pension as a locally insured person (jiyeok gaipja): the full 9.5% in 2026 (no employer half), charged on the declared standard monthly income bounded by the statutory floor and cap (KRW 400,000 - 6,370,000 to June 2026; KRW 410,000 - 6,590,000 from July 2026; blended annual bounds in the model). APPROXIMATE: the model uses profit / 12 as the declared income, which may legally differ.
  • National Health Insurance as a local subscriber: the income share is modelled at the 2026 employee-side total of 7.19% of income (income-proportional since the September 2022 reform) plus long-term care insurance of 0.9448% of income (13.14% of the NHI premium), both fully self-paid. APPROXIMATE: the real local-subscriber bill also includes a property / vehicle point component and minimum premiums, which depend on assets and are out of scope.
  • NHI premiums are deductible as business expenses - include them in the expenses input if desired (they are NOT auto-deducted, to avoid double counting).
  • No employment insurance and no industrial accident insurance - both are voluntary opt-ins for the self-employed (note only).
  • Out of scope: dependants and all tax credits (including the small standard tax credit of KRW 70,000 for business income earners), VAT, simplified / presumptive bookkeeping regimes, and the local-subscriber premium floor.

Sources: Korea.kr - 2026 pension reform (rate 9.5%), NPS - pension contributions and the standard monthly income, MOHW - 2026 health insurance rate 7.19%, NHIS - local subscriber premiums, NTS - global income tax rates (Art. 55).