Got paid for a side gig in Korea? Are you a remote worker for an overseas company?
If so, you're not alone. The gig economy is booming, and for many expats, it offers a flexible way to earn a living. But with that freedom comes a big question: What about taxes?
The rules can be confusing, and getting it wrong can lead to huge fines or even visa issues. This isn't just about money—it's about staying on the right side of the law.
This guide is your no-nonsense resource for navigating Korean taxes as a foreign freelancer. We'll cut through the jargon and give you the clear, actionable steps you need to file right. Let's get started.
The Gig Economy in Korea: Your Legal Status Matters
What Kind of Freelance Work is Legal in Korea?
When people talk about freelance work, they're not just talking about one single type of job. The "gig economy" covers a wide range of activities where you work independently without a traditional full-time contract. For foreigners, this often includes:
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Translation and Interpretation: Working on a per-project basis for a company or an individual.
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Tutoring and Private Lessons: Teaching a language (like English) or other skills outside of a registered school or academy.
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IT & Tech: Web development, graphic design, content creation, or coding for clients both in Korea and abroad.
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Consulting and Project-based work: Offering professional advice or services to businesses on a short-term contract.
The key point here is that for your work to be legal, it must align with your visa type and be properly reported. Simply getting paid into your Korean bank account from a client—even an overseas one—is considered income and has tax implications. So, while these jobs are common, you need to make sure your visa allows it and you're ready to handle the legal side.
Which Visas Allow Freelance Work in Korea?
This is perhaps the most important section of this entire guide. Being a freelancer in Korea is not a visa category in itself. Instead, you need to have a visa that specifically permits you to engage in independent economic activities. For most expats, the following visas are the only legal options for freelancing:
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F-2 (Resident) Visa: If you've lived in Korea long enough and meet the points-based criteria, this visa grants you significant freedom. You can work for an employer or for yourself.
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F-4 (Overseas Korean) Visa: This visa is for people of Korean heritage who hold foreign citizenship. It's one of the most flexible visas, allowing you to legally work for nearly any company or as a freelancer.
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F-5 (Permanent Resident) Visa: The ultimate goal for many long-term expats, this visa gives you all the rights to work that a Korean citizen has, including full freelancing freedom.
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D-8 (Investment) Visa: If you have started your own business in Korea, even as a sole proprietor (개인사업자), you can engage in freelance-like activities through your company.
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The new Digital Nomad (Workation) Visa (officially F-1-D): The Korean government is currently running a pilot program for this visa, designed for foreign remote workers who are employed by overseas companies. It has strict income requirements and is not for local freelance work in Korea, but it’s a noteworthy option for digital nomads.
Important Warning: If you are on a visa like a D-2 (Student), D-4 (Language Trainee), or a typical E-2 (English Teacher) visa, you are NOT legally allowed to freelance. Doing so is a direct violation of your visa conditions and can lead to fines, deportation, and an entry ban. Do not risk it.
Demystifying Korea's Tax System for Freelancers
Understanding Tax Residency: Resident vs. Non-Resident
Before we dive into the taxes themselves, you need to understand one key concept: tax residency. This is the foundation of all Korean tax laws and it’s a more complex issue than just a simple number of days.
You are generally considered a tax resident if your "center of living" is in Korea, which is usually determined by factors like your family's residence, the location of your assets, and your job. The 183-day rule (living in Korea for 183 days or more in a tax year) is a significant factor, but it is not the only factor.
Why is this so important?
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Tax Residents are required to pay Korean taxes on ALL their income, no matter where it was earned. This includes income from your Korean clients and any income from overseas clients, investments, or bank accounts back in your home country.
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Non-Residents only pay Korean tax on income that was earned from a source within Korea. If you were in Korea for less than 183 days and earned income from an overseas client, you would not be required to report or pay tax on that income in Korea (but you may have to in your home country).
For most expats who live and work in Korea for a full year or more, you will almost certainly be considered a tax resident. This means you must report all of your freelance income, both local and foreign-earned. Ignoring overseas income is a common mistake that can lead to serious penalties.
The Two Main Taxes: Global Income Tax (종합소득세) and VAT (부가가치세)
As a freelancer, you'll primarily deal with two types of taxes. Don't worry, they are not as scary as they sound!
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Global Income Tax (종합소득세, Jonghap-sodeuk-se): This is the most important one. It's a personal income tax that you must file annually on your total earnings from the previous year. This includes all freelance income, salary from a job, and any other income you have. It is a progressive tax, meaning the more you earn, the higher your tax rate is. The rates range from 6% to 45% as of 2025.
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Value-Added Tax (부가세, Bu-ga-se): This is a consumption tax of 10% that is generally added to the price of goods and services. If you are a registered sole proprietor (개인사업자), you may have a VAT obligation. You do not have to worry about VAT if you are a "simple taxpayer" with annual sales under 80 million won, but if your business grows above that threshold, you will have to charge and report VAT. It is important to know which category you fall into.
Your Step-by-Step Guide to Filing Global Income Tax (종합소득세)
When and How to File
Filing your taxes can seem intimidating, but the process is straightforward once you know the timeline.
You must file your Global Income Tax return between May 1st and May 31st of each year. This is for all income you earned from January 1st to December 31st of the previous year. For example, in May 2025, you will file for your 2024 income.
There are two main ways to file:
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Online via HomeTax (홈택스): This is the official and most common method. You can file directly through their website or app.
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In-person: You can visit your local tax office for assistance, but this can be challenging if you don't speak fluent Korean. It is generally recommended to use the online system or get help from a professional.
Required Documents: Get Ready!
To make the process as smooth as possible, you should have these documents and information ready:
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Your Alien Registration Card (ARC)
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A certificate of income: This could be bank statements, invoices, or contracts that show how much you earned.
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A list of business expenses: Keep track of everything you spent related to your freelance work (e.g., laptop, software subscriptions, office supplies, etc.). You will need these to get tax deductions.
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Your login credentials: You will need a digital certificate to log in.
How to Use HomeTax (홈택스): Step-by-Step
The HomeTax (홈택스) website and app are the main portals for tax filing in Korea. While the English version is available, it might not have all the functionalities of the Korean version.
Here’s a simplified breakdown of the process:
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Access HomeTax: Go to the official HomeTax website.
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Log In: Use one of the available methods, such as a financial institution certificate, simple authentication (간편인증), or mobile phone authentication. The public certificate (공동인증서) is still an option, but there are many new, easier ways to log in.
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Navigate to Income Tax Filing: Find the "Global Income Tax" (종합소득세) section. This is usually on the main page.
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Fill in Your Details: The system will often pre-fill some of your income data if it's already reported. You will then manually enter your freelance income and expenses.
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Review and Submit: Double-check all the information you entered. Once everything looks correct, submit your return. You will receive a confirmation and a tax bill if you owe any tax.
While the system is powerful, it can be complex. Don't be afraid to take your time or ask a Korean friend for help if you're unsure about a specific field.
Smart Tax Strategies and Saving Tips
Claiming Business Expenses to Lower Your Tax Bill
This is where you can save a significant amount of money. The Korean tax system allows you to deduct business-related expenses from your total income, which reduces the amount of income that is taxed.
What counts as a deductible expense? It's anything that is directly and necessarily related to your freelance work. Here are some examples:
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Tools and equipment: Laptops, cameras, professional software, or microphones.
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Office supplies: Printer ink, paper, or notepads.
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Utilities: A portion of your internet or phone bill if used for work.
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Travel expenses: Train or bus tickets for meeting clients.
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Educational costs: Online courses or workshops to improve your skills.
The key is to keep a detailed record of all your expenses, including receipts and invoices. This is crucial in case the tax office ever asks for proof.
How to Use Korea's Simple Expense Ratio (단순경비율)
What if you’re a new freelancer and don’t have a lot of receipts? The Korean tax system has a great solution called the Simple Expense Ratio (단순경비율).
This system allows you to deduct a fixed percentage of your total income as "expenses" without needing to provide any receipts. The ratio depends on your specific type of work and your income level (it's generally for those with a lower annual income). This is a fantastic option for beginners as it simplifies the tax process immensely. You can check the specific ratio for your type of work on the HomeTax website.
Avoiding Double Taxation with DTA
If you're a tax resident in Korea, you're required to report all your income, including money earned from overseas clients or investments. This raises a big question: won’t you be taxed in both Korea and your home country?
This is where Double Taxation Agreements (DTA) come in. Korea has signed these agreements with over 90 countries (including the U.S., UK, Canada, Australia, etc.) to prevent you from being taxed twice on the same income. The DTA allows you to get a tax credit in one country for the taxes you've already paid in the other. It's a complex topic, so if you earn substantial income from overseas, it's a good idea to consult with an accountant to make sure you're properly using the DTA.
FAQs for Freelancers in Korea
Q1. Do I need a Korean accountant to file taxes?
No, you don't necessarily need one. The HomeTax system is designed for self-filing. However, if your income is high, your situation is complex (e.g., you have a lot of foreign income), or you're simply not confident with the system, hiring an accountant is a great investment. They can help you find all possible deductions and ensure you file everything correctly, saving you a lot of potential headaches.
Q2. What happens if I don't report my income?
This is a serious mistake. The Korean National Tax Service (NTS) can access your bank records. If you receive income that is not reported, the NTS may flag it as undeclared income. Depending on the case, penalties can include a fine of up to 40% of the unpaid tax, plus interest. Your visa status could also be affected if the violation is serious. It’s always best to be honest and proactive.
Q3. What about my health insurance as a freelancer?
If you are a freelancer and not employed by a company, you are typically required to pay into the National Health Insurance (국민건강보험) as a regional subscriber. The monthly premium is calculated based on your income from the previous year. It's an essential part of being a legal resident and helps cover your medical costs.
Q4. Is it better to be a sole proprietor (개인사업자)?
Becoming a sole proprietor (개인사업자) is a formal step where you register your freelance business with the tax office. It's generally a good idea if your income is high, as it allows you to deduct more expenses and might make it easier to deal with Korean clients. However, it also adds administrative duties, such as filing VAT (부가가치세) reports. If you're a new freelancer with a low income, starting without this registration is often easier. You can always register later as your business grows.
Conclusion
Navigating the Korean tax system as a foreign freelancer (외국인 프리랜서 세금) doesn't have to be a source of stress. The most important thing is to be proactive, understand your legal status, and keep organized records of your income and expenses.
While the rules can seem complex at first, the system is designed to be manageable. By taking the time to understand your obligations—from tax residency to using the HomeTax system—you can ensure your freelance career in Korea is not only successful but also legally secure.
Please remember, staying on the right side of the law is key to a long and happy stay here.
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