# Freelancer 3.3% Withholding Tax Calculator

> Calculate the 3.3% withholding tax on Korean freelancer payments from gross (pre-tax) or net (after-tax) amounts. See the breakdown of 3% income tax and 0.3% local income tax.

## What Is the 3.3% Withholding Tax?

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.

## How to Use This Calculator

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.

## Withholding Tax Calculation Formulas

■ 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%.

## Tax Management Tips for Freelancers in Korea

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.

## Frequently Asked Questions

### Q. What does the 3.3% withholding tax consist of?

The 3.3% is composed of 3% income tax (national tax) and 0.3% local income tax (local government tax). The local income tax is calculated as 10% of the income tax, so 3% + (3% × 10%) = 3.3%. The payer remits the income tax to the national tax office and the local income tax to the municipal/district office separately. Both taxes are due by the 10th of the month following payment.

### Q. How is the withheld tax settled?

The 3.3% withheld throughout the year is a prepayment. Settlement occurs during the annual comprehensive income tax filing period in May. Your total annual income is calculated, necessary expenses and deductions are subtracted, and progressive tax rates (6%–45%) are applied to determine the final tax liability. The previously withheld amounts are then subtracted from this final amount, resulting in either additional tax owed or a refund. Freelancers with annual income below approximately 15 million KRW typically receive a refund.

### Q. Who is subject to the 3.3% withholding tax?

The 3.3% withholding applies to individuals who earn business income (사업소득) — meaning they provide services independently without an employment relationship. Common examples include freelance developers, designers, lecturers, writers, translators, consultants, after-school teachers, private academy instructors, insurance agents, door-to-door salespeople, delivery riders, and YouTubers. The key criterion is providing services independently and receiving business income as compensation.

### Q. Do freelancers go through year-end tax settlement (연말정산)?

No, freelancers are not subject to year-end tax settlement (연말정산). Year-end settlement is exclusively for employees with earned income (근로소득). Freelancers settle their taxes through the comprehensive income tax filing in May. However, if you work as an employee while also freelancing on the side, you undergo year-end settlement for your employment income and then separately file comprehensive income tax in May, combining both your salary and freelance income.

### Q. What is the relationship between 3.3% withholding and social insurance (4대보험)?

Freelancers subject to 3.3% withholding are generally not workplace-based subscribers to the four major social insurance programs (National Pension, Health Insurance, Employment Insurance, Industrial Accident Insurance). However, they must enroll as regional subscribers for National Pension and Health Insurance if their income exceeds certain thresholds. When comprehensive income tax filing results are reported to the National Health Insurance Corporation, premiums are assessed based on the declared income. Employment Insurance applies only to those classified as special-type workers (특수형태근로종사자).