Year-end Tax Refund Simulation

Start with gross salary, subtract earned-income, personal, card, and pension deductions to get the taxable base, apply the progressive brackets to get gross tax, then subtract tax credits to reach the final tax. If the final tax is less than what was withheld during the year, the difference is refunded.

Your total tax burden is identical either way, so there is no real gain or loss. A refund just means too much was withheld each month; an additional payment means too little. From a cash-flow standpoint, withholding the right amount monthly is actually more efficient than a large refund.

Gross tax is the initial figure obtained by applying the progressive rate brackets under the Income Tax Act to your taxable base. Final tax is what remains after subtracting tax credits for children, pensions, medical bills, donations, and so on. Your refund or balance due is determined by comparing final tax with the amount already withheld.

The rent tax credit is available to non-homeowning employees whose gross salary is below the applicable threshold and who pay rent for residential housing. Prepare the lease agreement and proof of rent payment (e.g., bank transfer records) and submit them through your company's year-end tax settlement process. If your salary exceeds the threshold, or the housing exceeds the national housing size or assessed value limit, you may be ineligible, so checking the requirements in advance is recommended.

Contributions to pension savings and IRP within the combined annual limit qualify for a tax credit. The credit rate differs based on your total salary threshold. For the latest contribution limits and credit rates, refer to the National Tax Service or Financial Supervisory Service.

Credit cards allow deferred payment, which tends to encourage spending, whereas debit cards and cash receipts reflect real-time expenditure and improve tax transparency. To promote the latter, Korean tax law sets a higher deduction rate for debit card and cash receipt spending than for credit card use. For the current deduction rates and caps, check the National Tax Service (Hometax).

The dependent personal deduction applies to a spouse, lineal ascendants/descendants, and siblings who meet the income and age requirements set out in the Income Tax Act. The age requirement differs depending on the relationship, and there is no age limit for a spouse. Persons with disabilities may qualify for an additional deduction regardless of age. If multiple employees claim the same dependent, it may result in a recovery assessment, so coordination within the family is important. Please check the latest eligibility requirements on the National Tax Service's Hometax website.

Companies process year-end settlement in January–February and apply the result to February or March payroll. Most employees see the refund deposited around the late-February to March payday. Some companies push the timing to April depending on internal processing schedules.

Setting the insurance, medical, pension savings, and rent sliders to their legal maximums lets the waterfall chart show the cumulative deduction effect visually, and the maximum-refund comparison bar immediately shows how much more you could receive compared to your current deductions. Activating the 'Maximum Refund Scenario' toggle applies all per-item limits at once so you can compare that result side by side with your current inputs. Adjust the sliders yourself to explore which item has the biggest impact on your refund.