The tax treaty that can wipe out your Korean income tax for two years
The US–Korea tax treaty lets qualifying teachers skip Korean income tax on their teaching pay for up to two years, but the treaty text was written with universities in mind, not hagwons, and nobody files it for you automatically.
Park English2026-09-023 min read
Every Korean payslip has a line for income tax and a second, smaller line under it for local income tax. That second line isn't a separate tax; it's a surcharge calculated as a percentage of the first. A 10% local surtax applies on top of national income tax, so the effective rate ends up somewhat higher than the headline number. Most teachers just accept both lines as the cost of working here. For teachers from a handful of countries, that's not quite the full story.
The treaty article, in the government's own words
The relevant clause sits in Article 20 of the US–Korea tax treaty, the one usually filed under "Teachers." It covers a resident who comes to the other country for a period not expected to exceed two years for the purpose of teaching or research at a university or other recognized educational institution, and exempts that person's income from such teaching for a period not exceeding two years from arrival.
Read that again: "university or other recognized educational institution." That phrase is exactly where hagwon claims get complicated. A visiting lecturer hired by a Korean university fits the language cleanly. A teacher hired by a private after-school academy in Bucheon is arguing that a hagwon counts as a "recognized educational institution", and NTS doesn't have to agree with that argument just because a friend's hagwon filed it successfully last year. Practice on this has tightened, and some hagwons that used to file it routinely now leave it entirely to the teacher.
What to actually check, in order
- Confirm your home country's treaty with Korea actually has a teachers'/researchers' article; don't assume it exists because someone from another country got the exemption.
- Ask your hagwon's 세무사 (tax agent) whether they've filed this for a foreign hagwon teacher before, not just for a university client.
- Get the request in near the start of your contract. Filing late doesn't automatically disqualify you, but it makes the paperwork worse.
- Keep your own copy of whatever gets submitted to NTS. If the school's records go missing, you're the one who needs proof.
- Don't confuse this with Korea's flat tax option for foreign workers. Foreign expatriates and employees starting work in Korea can apply for a flat income tax rate of 19% (excluding local income tax) on their employment income instead of the progressive bands. That's a genuinely different mechanism, aimed at people on salaries high enough that a flat rate beats deductions, usually not the case on an ordinary hagwon salary, and it has to be elected separately.
If nobody files the treaty exemption, you're taxed the normal way. Korea's progressive rates run from 6% to 45%, withheld monthly and reconciled at year-end settlement. That reconciliation, 연말정산, can leave you with a small refund or a small bill depending on how close your monthly withholding came to your actual liability.
| Situation | What happens to your income tax |
|---|---|
| Treaty exemption filed and accepted | Little to none withheld for the exempt period |
| No treaty claim, standard filing | Withheld monthly, reconciled each February |
| Eligible but nobody filed | Retroactive refund possible, slow, and on you to chase |
We genuinely don't know, sitting here, whether your specific hagwon contract will clear NTS review; that depends on your nationality, your treaty's exact wording, and how that particular NTS office has been treating hagwon claims lately. Ask your own 세무사, not a forum, and definitely not us.