Setting up Korean tax withholding as a foreign teacher: what to file and when

Somewhere in your first week, between your ARC application and your phone contract, your director's assistant will hand you a stack of Korean forms and ask you to sign. Most of it is for your health insurance and pension. A smaller part is for tax, and it's worth knowing what you're signing before the first payday arrives.

The forms, in the order they usually come up

For most new teachers, the first form is the only one that actually needs your signature in week one. The other two are choices, not requirements.

What happens automatically

Workers can choose the ratio of tax (80%, 100%, 120%) according to the simplified tax table, and submit a 'Withholding Tax Rate Adjustment Request' to the withholding agent, or write the ratio on the income and tax deduction report. You don't calculate anything yourself. If you don't choose a ratio, 100% applies by default, and once you change the withholding ratio, it continues to apply until the end of the tax period. Most teachers never touch this. It mostly matters if you'd rather have a bit more held back now than owe it at settlement time in February.

The flat rate decision

So here's the one real choice. Foreign expatriates and employees who will start to work in Korea no later than 31 December 2026 are able to apply for a flat income tax rate of 19% (excluding local income tax) on their employment income rather than the normal progressive income tax rates of between 6% and 45%, which with the local income tax surcharge works out to a combined 20.9 percent. The flat tax rate is applicable for a 20-year period, starting with the first day of work in Korea to the end of the tax year immediately preceding the year in which the 20-year anniversary of the first day of work falls, and you apply either when you file an annual tax return or to your employer at the time of monthly withholding or year-end settlement.

The catch is real: if you choose the flat rate, any other income deductions, tax exemption, and tax credit are forfeited. For a teacher on a typical hagwon salary with few deductions to begin with, this usually isn't a close call either way, but it's worth asking your school's payroll contact to run both numbers before you sign anything.

And note the clock, because it's about to matter more than usual. The government's 2026 tax reform proposal, announced in August, would raise that flat rate from 19 percent to 21 percent and push the eligibility cutoff out to workers who start their first job in Korea by 31 December 2029. Nothing has changed yet: as of this writing the bill is still sitting with the National Assembly, which usually finalizes the year's tax changes in December, and any revision would take effect from 1 January 2027 if passed. If you start your job before the end of 2026, you lock in the current 19 percent rate on whatever future income falls inside that 20-year window. If you start later, ask your school's payroll contact or a tax accountant whether the extension passed and what rate applies, since the rules could look slightly different by the time you sign.

Separate from all of this, teachers from certain passport countries can also apply for a tax treaty exemption that works differently and has its own timeline. That's its own process, worth asking your placement coordinator about once you're settled.

The part nobody tells you: school admin staff handle this paperwork maybe once or twice a year per foreign hire, so double-check your first payslip shows the right dependent count and withholding choice rather than assuming it's correct.