P2P / Online Investment-Linked Finance (ONTU) Return and Tax Calculator

Compare the 15.4% withholding rate for registered Korean online investment-linked finance operators against the 27.5% non-business loan rate, and see the after-tax real return once default losses, which are not deductible, are included.

Korea-related planning note

This English page is a planning estimate. If the topic involves Korean taxes, pensions, insurance, loans, or public programs, confirm the current Korean rules, limits, and eligibility before acting.

Scenario inputs

Adjust the assumptions to compare gross value, cost drag, tax drag, and downside value.

Net ending value

$65,781

Gross value before drag

$81,211

Estimated tax

$6,314

Fee and tax drag

$15,430

Total contributions

$30,000

Net gain

$35,781

119.3%

Downside value

$62,492

Scenario readout

Tax drag is included in net value

This calculator is based on Korean rules as of 2026. Interest from P2P lending is a non-business loan gain taxed at 25% income tax plus 2.5% local income tax (27.5%), unless it is received through an online investment-linked finance operator registered with the Financial Services Commission, in which case it is 14% plus 1.4% (15.4%) under Income Tax Act Article 129(1)1(b). Because Income Tax Act Article 16(2) defines interest income as gross receipts, default losses on principal and platform fees are not deductible, so you can owe tax while losing money overall. Verify the operator registration and current Korean tax rules before investing.

Related calculators

What is the P2P / ONTU return and tax calculator?

Korean P2P lending platforms advertise headline yields like “10% per year”. A year later, many investors find that far less than half of that actually reached their account. This calculator breaks down exactly where the gap comes from, won by won.

The key point is that P2P interest is a different kind of income from bank deposit interest under Korean tax law. Bank interest is withheld at 15.4% and that is the end of it. P2P interest is a non-business loan gain under the Income Tax Act, so the default rate is 27.5%. It drops to 15.4% only when the interest is received through an online investment-linked finance operator (ONTU operator) registered with the Financial Services Commission.

There is a bigger trap. Interest income is taxed on gross receipts, so neither principal lost to defaults nor platform fees reduce your tax base. That means Korean P2P has a real range where you lose principal and still owe tax.

Korea-based rules (2026): This calculator models Korean online investment-linked finance (ONTU) under Korean tax law. Rates, investment caps, and platform practice change over time, so confirm the operator’s registration status and current Korean tax rules before investing. ONTU investments are not protected by the Depositor Protection Act.

Who this is for

  • • Investors who want to know what a platform’s advertised yield actually leaves them
  • • Anyone comparing a registered ONTU operator against an unregistered private loan
  • • Investors asking how high a default rate their position can absorb
  • • People deciding whether to reinvest principal repaid by amortizing loans
  • • Investors whose financial income is approaching the KRW 20 million aggregation threshold
  • • Anyone checking the ONTU statutory investment caps
  • • Investors who want the tax rounding benefit of small-ticket diversification quantified

Four things that eat your P2P return

1. Withholding rate — registration nearly doubles your tax

Income Tax Act Article 129(1)1(b) reads:
“For gains from non-business loans, 25 per 100. However, for interest income received through an online investment-linked finance operator registered with the Financial Services Commission under the Act on Online Investment-Linked Finance and Protection of Users, it shall be 14 per 100.”

Local Tax Act Article 103-13(1) then adds a local income tax equal to 10% of the withheld income tax, so the final rates are:

  • • Registered ONTU operator: 14% income tax + 1.4% local income tax = 15.4%
  • • Unregistered / private lending: 25% + 2.5% = 27.5%
  • • For reference — bank deposits: item (d) of the same provision, “other interest income”, 14% → 15.4%

💡 This 14% proviso is written directly into the Income Tax Act, not a temporary concession under the Restriction of Special Taxation Act. The same wording has stood since the 2020 version, when the ONTU Act was introduced, so there is no sunset date attached to it.

2. Losses are not deductible — the biggest trap

Income Tax Act Article 16(2) states that “the amount of interest income shall be the gross receipts for the relevant tax period.” Unlike business income or capital gains, no necessary expenses are deducted.

As a result, none of the following reduce your tax base:

  • • Principal lost when a borrower defaults
  • • Platform fees paid to the operator
  • • Collection and recovery costs

What that looks like in numbers

Suppose you invest KRW 10,000,000 at 10% for one year with bullet repayment, and 10% of the principal defaults.
You receive KRW 900,000 of interest, and tax of KRW 138,600 is withheld on it at 15.4%.
But you lost KRW 1,000,000 of principal, so your net result is −KRW 238,600.
You lost money and still paid KRW 138,600 in tax.
With stock capital gains, losses offset gains. Interest income has no such mechanism.

3. Idle cash — the hidden cost of amortizing loans

Most Korean P2P products use equal-payment amortization. Principal trickles back every month, and if you do not reinvest it immediately, it sits idle in your account.

The headline rate accrues on the outstanding balance, but the return you actually feel is measured against the amount you originally committed. With equal-payment amortization the average outstanding balance is only about half your principal, so without reinvestment your effective return falls to roughly half the headline rate.

  • • Equal-payment amortization: average balance around 50–55% → idle cash
  • • Monthly interest + principal at maturity: average balance 100% → no idle cash
  • • Bullet: average balance 100% → no idle cash

💡 The calculator also shows the ceiling you would reach by reinvesting immediately and holding the balance at 100%, so you can see exactly what the reinvestment effort is worth in percentage points.

4. Rounding — the one factor that favors the investor

National Treasury Management Act Article 47(1) provides that “where there is a fraction of less than 10 won, that fraction shall not be counted, and where the entire amount is less than 10 won, the entire amount shall not be counted.” Article 47(2) discards fractions under 1 won when computing the national tax base, and Article 47(3) applies the same treatment to local governments.

P2P pays small amounts of interest per loan per month, so this rounding bites hard. On top of that, income tax and local income tax are each truncated separately.

Rounding examples

  • • KRW 500 monthly interest per loan: income tax KRW 70 stands; local tax KRW 7 → KRW 0.
    Effective rate 14.0%, not 15.4%.
  • • KRW 60 monthly interest per loan: income tax KRW 8.4 → the whole amount is under 10 won → KRW 0.
    Local tax is also 0 → effective rate 0%.
  • • KRW 50,000 paid as a single lump: KRW 7,700 fully taxed → effective rate 15.4%.

💡 In other words, the smaller your slices, the better: diversification buys you risk spreading and tax savings at the same time. This effect shrinks if a platform withholds on aggregated interest rather than per loan.

How to use it

Step 1: Choose the platform type

Start by checking whether the operator is a registered ONTU operator. Registration with the Financial Services Commission can be confirmed through the Financial Supervisory Service (FINE) or the FSC register of licensed operators.

Step 2: Enter the investment terms

Enter principal, headline annual rate, term, and repayment type. Entering the number of loans you spread across automatically applies the per-loan rounding effect.

Step 3: Assume a default rate and recovery rate

Use the delinquency and default rates the platform discloses as a starting point. Set recovery high for collateralized products and low for unsecured credit products.

Step 4: Check the break-even default rate

Alongside the after-tax effective return, you get a break-even default rate. If your assumption is close to that number, the product is not paying you enough for the risk.

Scenarios

Scenario 1: What an advertised 10% really pays

Enter KRW 10,000,000 at 10% for 12 months, equal-payment amortization, registered operator, 1.2% annual fee, 5% default rate, 30% recovery, spread across 100 loans. The headline 10% lands far lower on an after-tax effective basis.

Amortization halves total interest relative to bullet repayment, fees and tax come out of what is left, and defaulted principal is subtracted on top. The calculator’s waterfall shows the amount lost at each step.

Scenario 2: Unregistered private lending

If you lend to an acquaintance and collect interest, no registered ONTU operator is involved, so it is a non-business loan gain. On the same KRW 10,000,000 at 10% for one year, tax jumps from KRW 154,000 to KRW 275,000.

That KRW 121,000 difference comes purely from the channel you used. Private lending also gives you weaker recovery options on default, which pushes the break-even default rate lower and makes it riskier still.

Scenario 3: Cutting tax by increasing the number of loans

Putting the same KRW 10,000,000 into one loan versus splitting it across 100 produces different tax. The smaller the monthly interest per loan, the more often the withholding falls under 10 won and is discarded.

Diversification is also essential for risk management. The ONTU Enforcement Decree caps a general retail investor at KRW 5,000,000 per borrower, so spreading is legally mandated as well.

ONTU investment caps

These caps come from Article 32(2) of the Act on Online Investment-Linked Finance and Protection of Users and Article 27(6) of its Enforcement Decree (amended 30 July 2024).

Investor typeTotal capPer borrower
General retail investorKRW 50 millionKRW 5 million
Income-qualified retail investor
financial income over KRW 20 million, or business + employment income over KRW 100 million		KRW 100 millionKRW 20 million
Professional individual investorNot appliedNot applied

Note: the Enforcement Decree says “within KRW 50 million, in an amount set and published by the Financial Services Commission taking into account the type of linked investment product”, so real estate related products and others may carry lower caps set by FSC notice.
The table above shows the Enforcement Decree ceilings. Always confirm the actual cap on the platform itself.

Frequently asked questions

Q. Is P2P interest taxed at 15.4% like deposits?

A. Only when it is received through a registered ONTU operator.
Any other private loan interest is a non-business loan gain taxed at 27.5%.
Two things both called “P2P” can differ in tax by nearly a factor of two based on registration alone.

Q. If defaults wipe out my principal, do I get the tax back?

A. No.
Income Tax Act Article 16(2) defines interest income as gross receipts, so no necessary expenses or losses are deducted.
Tax already withheld stays withheld, and the principal loss is yours alone.

Q. Does diversification really cut my tax?

A. Yes, if the platform withholds per loan.
Under National Treasury Management Act Article 47(1), fractions under 10 won are discarded, and if the entire amount is under 10 won it becomes zero.
At roughly KRW 60 of monthly interest per loan, income tax of KRW 8.4 is discarded entirely and the tax becomes zero.

Q. How is the break-even default rate calculated?

A. It solves for the default rate at which after-tax net profit reaches zero.
Let A be ‘total interest − fees − tax’ and B be ‘principal × (1 − recovery rate)’; the break-even default rate is A ÷ (A + B).
For KRW 10,000,000 at 10% for one year with no fee through a registered operator, it comes to about 7.8%. Above that, you are in the loss range.

Q. What happens if my financial income exceeds KRW 20 million?

A. Under Income Tax Act Article 14(3)6, if combined interest and dividend income is KRW 20 million or less, withholding settles it as separate taxation.
Above that, the excess is aggregated with your other income and taxed comprehensively, which can raise your burden sharply in the top brackets.
As a side effect, larger P2P interest can make you an ‘income-qualified retail investor’ under the ONTU rules, raising your investment cap.

Q. Amortizing or bullet — which is better?

A. If you reinvest diligently, amortization returns principal faster and carries less risk.
Left alone, idle cash drags your effective return down to roughly half the headline rate.
Bullet keeps the balance fully deployed with no idle cash, but locks your principal in and leaves it exposed to default risk for longer.

Q. Do I need to file a separate income tax return?

A. If financial income is KRW 20 million or less, withholding settles it and no separate filing is needed.
Above KRW 20 million, you must file a global income tax return the following May.
Confirm your actual filing position with the National Tax Service or a licensed tax adviser.

Checklist before investing

  • Confirm registration: make sure the operator is registered with the Financial Services Commission.
    Unregistered operators push your rate to 27.5% and offer none of the statutory investor protections.
  • Check disclosed delinquency: use the platform’s published delinquency and default rates as the starting point for your default assumption.
    New platforms can look artificially healthy because their loan book is growing fast.
  • Check collateral: real estate backed products recover more but take a long time through auction.
    Assume low recovery on unsecured credit products.
  • Compare against the break-even default rate: if the disclosed delinquency exceeds half the break-even rate, the reward does not match the risk.
  • Diversify: beyond respecting the per-borrower cap (KRW 5 million for general retail investors), slice small to capture the rounding benefit.
  • No deposit protection: ONTU investments are not covered by the Depositor Protection Act.
    Total loss of principal is possible.

Basis and limitations

Statutes applied (Korea, 2026)

  • • Income Tax Act Article 129(1)1(b): 25% on non-business loan gains, 14% on interest through a registered ONTU operator (provision effective 1 January 2026)
  • • Income Tax Act Article 16(1)11 and 16(2): non-business loan gains are interest income; interest income equals gross receipts
  • • Income Tax Act Article 14(3)6: KRW 20 million aggregation threshold for interest and dividend income
  • • Local Tax Act Article 103-13(1): local income tax withheld at 10% of the withheld income tax
  • • National Treasury Management Act Article 47: fractions under 10 won discarded; tax base fractions under 1 won discarded
  • • ONTU Act Article 32 and Enforcement Decree Article 27(6): per-investor linked investment caps

Assumptions and limits

  • • Defaulted loans are assumed to pay no interest at all, which is deliberately conservative.
    In practice some loans pay for a while before defaulting, so results here lean pessimistic.
  • • The rounding benefit holds only where the platform withholds per loan.
    Aggregated withholding reduces the effect.
  • • Platform fees are modeled as an annual rate accruing on the outstanding balance.
    Actual fee structures vary by platform, so check the terms.
  • • Default and recovery rates are user assumptions and do not guarantee outcomes.
  • • Additional tax from comprehensive aggregation depends on your other income, so this calculator only flags whether you cross the threshold.
  • • This calculator is for reference only. Confirm actual filing and payment with the National Tax Service or a licensed tax adviser.

Check what actually lands, not the advertised yield

Enter your principal and headline rate, and the after-tax effective return appears immediately with tax, fees, and defaults all applied.

Compare registered against unregistered tax, see your break-even default rate, and quantify the rounding benefit of diversification on one screen.