Freelancer 3.3% Withholding Tax Calculator

The 3.3% withholding tax is a mandatory tax deduction applied to payments made to freelancers, lecturers, writers, designers, and other individuals who earn business income (사업소득) in South Korea. Under Article 129 of the Income Tax Act, the payer (the business or company commissioning the work) must withhold this tax before making payment and remit it to the tax authorities. The 3.3% rate consists of two components: a 3% national income tax and a 0.3% local income tax (which is calculated as 10% of the income tax). For example, if a freelancer has a contract for 3 million KRW, the payer deducts 90,000 KRW in income tax (3,000,000 × 3%) and 9,000 KRW in local income tax (90,000 × 10%), paying the freelancer a net amount of 2,901,000 KRW. The withheld 99,000 KRW must be remitted to the tax office by the 10th of the following month. This system serves two purposes: it enables the government to track freelancer income and collect taxes in advance. Importantly, the withheld amount is not the final tax liability — it is a prepayment. During the annual comprehensive income tax filing period in May, freelancers must report their total annual income, and the actual tax is calculated based on progressive tax rates ranging from 6% to 45%. The previously withheld amounts are credited against the final tax bill. If the freelancer's annual income is low, they may receive a refund; if income is high, additional tax may be owed. While commonly referred to as '3.3% tax,' the official term is 'withholding tax on business income' (사업소득에 대한 원천징수). This distinction matters because different types of income have different withholding rates — for instance, certain types of other income (기타소득) are subject to an 8.8% withholding rate instead.

This calculator offers two modes to help you quickly determine the tax impact on freelancer payments. ■ Mode 1: Gross Amount (Pre-tax) → Net Payment Enter the contract amount (the gross, pre-tax figure stated in your freelance contract), and the calculator instantly shows the income tax (3%), local income tax (0.3%), total withholding (3.3%), and the actual net amount you will receive. For example, entering 5,000,000 KRW shows: income tax 150,000 KRW, local income tax 15,000 KRW, total withholding 165,000 KRW, and net payment 4,835,000 KRW. ■ Mode 2: Net Payment (After-tax) → Gross Amount Enter your desired net payment (the amount you actually want to receive after taxes), and the calculator reverse-engineers the required gross contract amount. This is useful when negotiating rates — for instance, if you need exactly 3,000,000 KRW in hand, you can see that the gross contract amount needs to be approximately 3,102,000 KRW. Using the calculator is straightforward: select your desired mode from the tabs at the top, enter the amount, and results appear instantly. The input field automatically formats numbers with thousand separators (commas) for easy readability of large amounts.

■ Forward Calculation (Gross → Net) Income Tax = Gross Amount × 3% (rounded down to the nearest won) Local Income Tax = Income Tax × 10% (rounded down to the nearest won) Total Withholding = Income Tax + Local Income Tax Net Payment = Gross Amount – Total Withholding Worked Example: Gross Amount = 3,000,000 KRW • Income Tax: 3,000,000 × 0.03 = 90,000 KRW • Local Income Tax: 90,000 × 0.1 = 9,000 KRW • Total Withholding: 90,000 + 9,000 = 99,000 KRW • Net Payment: 3,000,000 – 99,000 = 2,901,000 KRW ■ Reverse Calculation (Net → Gross) Gross Amount = Desired Net Payment ÷ (1 – 0.033) = Desired Net Payment ÷ 0.967 After the reverse calculation, the forward formula is reapplied to compute the exact income tax, local income tax, and verified net payment. This two-step process corrects for rounding differences caused by the floor (truncation) operation. Worked Example: Desired Net Payment = 2,901,000 KRW • Gross Amount (reverse): 2,901,000 ÷ 0.967 ≈ 3,000,000 KRW • Income Tax: 90,000 KRW / Local Income Tax: 9,000 KRW • Net Payment (verified): 2,901,000 KRW ✓ ■ Important Note on Local Income Tax Local income tax is calculated as 10% of the income tax, not as 0.3% of the gross amount directly. While 3,000,000 × 0.003 = 9,000 and 90,000 × 0.1 = 9,000 yield the same result in this example, the floor (truncation) operation is applied twice in the tax-law-compliant method (once for income tax, once for local income tax), which can cause a difference of 1 KRW for certain amounts. This calculator uses the legally correct method: Local Income Tax = Income Tax × 10%.

1. Comprehensive Income Tax Filing Is Mandatory: The 3.3% withholding is merely a prepayment. You must file a comprehensive income tax return every May (May 1–31). Progressive tax rates from 6% to 45% are applied to your total annual income, and the withheld amounts are credited as prepaid tax. If your annual income is low, you may receive a refund; if high, you may owe additional tax. 2. Claim Necessary Expenses: Freelancers can deduct business-related expenses (equipment, transportation, communication, office rent, training, etc.) to reduce taxable income. Maintaining bookkeeping records (simplified or double-entry) provides additional deduction benefits. Those with prior-year revenue under 24 million KRW may automatically apply standard expense rates by industry. 3. Understanding 3.3% vs 8.8% Rates: Different types of freelance income may have different withholding rates. Standard business income (lecture fees, manuscript fees, design fees, etc.) is subject to 3.3%, but service tips and certain types of 'other income' (기타소득) may be subject to 8.8% (8% income tax + 0.8% local income tax). Always check your contract to verify the applicable rate. 4. Keep Withholding Tax Receipts: The withholding tax receipt (원천징수영수증) issued by your client is the key document proving prepaid taxes when filing your comprehensive income tax return. While you can also check payment statements on the National Tax Service's Hometax portal, it is safer to keep separate copies in case your client fails to report. 5. VAT Exemption for Personal Services: Freelance activities classified as personal services (lectures, writing, translation, design, etc.) are exempt from VAT. However, product sales or certain business-natured services may be subject to VAT, so check your business registration status and tax invoice obligations. 6. Health Insurance Implications: If your freelance income exceeds a certain threshold, you will be assessed regional subscriber health insurance premiums. Your comprehensive income tax filing results are reported to the National Health Insurance Corporation, which then calculates your premiums based on declared income. Plan ahead for potential insurance premium increases after filing.