Freelancer 3.3% Tax Calculator

The 3.3% Withholding-to-May-Refund Playbook for Korean Freelancers

When you work as a freelancer in Korea, 3.3% is shaved off every payment before it lands in your account. Many people assume this means "taxes are done," but it is really just a prepayment held back at source (withholding tax). Your actual tax is finalized the following May through the comprehensive income tax (jonghap-sodeukse) filing — and in that process most low-to-middle-income freelancers actually receive a refund. This article walks through what 3.3% really means and the full flow of getting money back in May, from a practical angle. (The 3.3% vs 8.8% comparison itself is covered in the 3.3% vs 8.8% guide.)

What 3.3% actually is: 3% income tax + 0.3% local income tax

Personal services paid as business income (lecture fees, design, translation, dev contracting, etc.) are withheld at a 3% income tax rate, plus a 0.3% local income tax equal to 10% of that income tax — totaling 3.3%. So 3.3% is not a single rate but the sum of "3% income tax + the local surtax on it." By contrast, occasional or incidental income is classified as other income and taxed at 8.8% (22% withholding after a 60% deemed-expense deduction). The same lecture can be business income (3.3%) if done professionally and repeatedly, or other income (8.8%) if it's a one-off — so the classification matters.

Why refunds happen: 3% withholding > your actual tax burden

The 3% withholding is a provisional rate applied to your entire gross revenue with no expenses deducted. But real comprehensive income tax is computed on your tax base — revenue minus necessary expenses and various deductions — using progressive rates (6–45%). For freelancers without large revenue, once expenses and the basic deduction are applied, the real tax often falls below the 3% already withheld, and you get the difference back.

• Progressive rates (2026): 6% on a tax base up to KRW 14M, 15% on 14M–50M, 24% on 50M–88M, rising from there.
• Two ways to recognize expenses: bookkeeping (actual costs) or estimation (simplified/standard expense rate). Small freelancers with weak documentation usually file under the simplified rate.
• Simplified expense rate: by industry code, a set percentage of revenue (typically in the 60s% for personal services) is auto-recognized as expense. Available if prior-year revenue is below the threshold.
• Standard expense rate: once revenue exceeds a certain size, major costs (purchases, rent, payroll) must be documented and only the rest gets a low rate — without receipts, your tax jumps sharply.

Step-by-step example: a freelancer earning KRW 30M/year

Assume a personal-services freelancer eligible for the simplified rate earns KRW 30M (VAT-exempt) with no other income or dependents.

• ① Already withheld: KRW 30M × 3.3% = KRW 990,000 prepaid.
• ② Simplified-rate expenses (assume 64.1%): 30M × 64.1% ≈ KRW 19.23M → business income ≈ KRW 10.77M.
• ③ Income deduction: subtracting the KRW 1.5M personal basic deduction gives a tax base ≈ KRW 9.27M.
• ④ Computed tax: 9.27M × 6% ≈ KRW 556,000.
• ⑤ After tax credits: applying the KRW 70,000 standard tax credit and others lowers the final tax further (around KRW 480,000).
• ⑥ Settlement: final tax ~KRW 480k < the ~KRW 900k income-tax portion already paid → refund of roughly KRW 400k income tax plus the local portion. Actual refund varies with deductions applied.

The core mechanic is: "you were withheld 3%, but your effective income-tax rate is lower than that." As revenue rises and the tax base crosses the KRW 14M and 50M brackets, progressive rates eventually flip you into additional payment instead. The most accurate way to find your break-even is to plug revenue and expenses into the freelancer tax calculator.

Easy-to-miss points and a 2026 checklist

• VAT filing: pure personal services by freelancers are VAT-exempt, so there's no VAT filing or payment duty. But if taxable sales (goods, rentals) are mixed in, you'll need business registration and VAT filing. If you're a standard business, see the VAT calculator.
• Switch to regional health insurance: leaving a job to go freelance moves you from employee to regional subscriber, so not just income but property and cars factor into your premium. Income filed in May feeds into your regional premium from that November onward, so rising income means rising premiums too. Estimate the burden with the 4 major insurances calculator.
• Keeping receipts: work-related spending — laptops, software subscriptions, transport, telecom — counts as expense when you file by bookkeeping, provided you keep valid evidence (tax invoices, card, cash receipts). As revenue grows, actual bookkeeping eventually beats the simplified rate.
• Missing May: skipping the filing triggers a 20% non-filing penalty plus a late-payment penalty — and you forfeit any refund. Refunds only come if you file; do nothing and the withheld 3.3% simply stays with the government.
• Interim prepayment & honest-filing review: if last year's tax exceeds a threshold, you may get a November interim prepayment notice, and larger revenue can trigger the honest-filing verification requirement.

Related tools and guides

• Freelancer tax calculator — simulate refund/additional payment from revenue and expenses
• 3.3% vs 8.8% comparison guide — the withholding difference between business and other income
• 4 major insurances calculator — gauge health premiums after switching to regional coverage