Classify personal settlement receipts, returned principal and contract damages, then compare withholding, annual separate taxation and progressive income tax scenarios.
Taxable other income from entered receipts
KRW 2,000,000
Annual ordinary other income · KRW 3 million test
KRW 2,000,000
Gross receipts / principal and amounts outside other income (reference): KRW 32,000,000 / KRW 30,000,000
| Item / event | Gross | Outside other income | Expenses | Taxable income | Classification reason |
|---|---|---|---|---|---|
| 1. Property-contract penalty / delay damages Event 1 | KRW 32,000,000 | KRW 30,000,000 | KRW 0 | KRW 2,000,000 | Contract income after principal / actual expenses |
Delayed-housing-occupancy damages in one event are combined before comparing the 80% allowance with actual expenses. Row expenses allocate that event allowance; the KRW 50,000 test uses the event net-income total.
Receipt after actual payment-stage withholding: KRW 31,560,000
The correction-review difference is the positive part of actual minus estimated withholding. It is neither an approved refund nor final tax; classification and evidence require payer / tax-office review.
| Event | Ordinary withholding base | National tax | Local tax | Estimated total |
|---|---|---|---|---|
| 1 | KRW 2,000,000 | KRW 400,000 | KRW 40,000 | KRW 440,000 |
Forfeited-deposit income is excluded from the withholding base. Each event assumes one payment; when ordinary national withholding is below KRW 1,000, the small-tax non-collection rule makes estimated national and local withholding zero. Otherwise each tax discards amounts below KRW 10. Check instalment statements separately.
Annual income at most KRW 3 million: elective separate-tax comparison available
| Scenario | National + local reference tax | Balance after entered withholding |
|---|---|---|
| Elective separate tax · about 22% of net income | KRW 440,000 | KRW 0 |
| Comprehensive · incremental progressive tax | KRW 330,000 | KRW -110,000 |
Lower scenario before credits: Comprehensive taxation · Tax difference: KRW 110,000
The balance deducts all annual withholding entered: positive suggests additional payment, negative suggests refund review. It is not a final refund after other return items, changing credits or local-tax credit differences.
Korea-specific rules and official interpretations checked on 2026-11-07.
All amounts are KRW.
This tool reviews miscellaneous-income classification, withholding and tax scenarios for a Korean resident individual receiving nonbusiness payments.
It supports document review and does not determine a binding tax classification or refund.
A settlement total does not establish its income-tax treatment.
Returned principal, compensation for bodily injury caused by a tort, and an additional contractual penalty have different characteristics.
This tool separates those components to review Korean miscellaneous income, expected withholding and the filing position.
It does not calculate how much compensation a defendant should pay.
Income Tax Act Article 21(1)(10) and Enforcement Decree Article 41(8) address damages arising from the breach or cancellation of a property-related contract.
A label such as consolation payment, support or compensation does not override the underlying facts.
Match the selected category to the contract, judgment, settlement and payment statement rather than changing the label to obtain a tax result.
The scope is a Korean resident individual receiving nonbusiness payments attributable to 2026.
Enter the gross amount before withholding, the original principal included in that amount and documented expenses attributable to the taxable income.
A bank deposit after tax is not the gross amount.
Obtain the payment statement before calculating.
Actual withholding includes both national income tax and local income tax.
Confirm the withholding certificate and whether the payer completed withholding; a verbal statement alone is insufficient.
Other miscellaneous income means net income for the same year under the ordinary 20% optional-separate-tax regime, after applicable expenses and the per-case exemption.
Do not include this settlement twice or enter gross lecture fees without first calculating net income.
The existing comprehensive tax base excludes all miscellaneous income entered here.
It is a tax base after income deductions, not salary or business revenue.
Use a return or a reliable draft calculation.
If recipient status, attribution year or classification is unconfirmed, leave the confirmation unset and use the review-required result to gather missing evidence.
| Actual cause | Treatment in this tool | Deemed expenses | Evidence to check |
|---|---|---|---|
| Personal tort damages and corresponding delay damages | Excluded from miscellaneous income | — | Tort cause and damage components |
| Returned principal | Excluded from miscellaneous receipts | — | Original payment and refund statement |
| Contractual breach, cancellation or delay damages | Review after principal and actual expenses | — | Property contract and settlement ledger |
| Retained deposit converted into a penalty | Tax review; no withholding; check filing | — | Already held deposit versus a new payment |
| Property-insurance payment delay | Taxable-income review | — | Insurance principal versus delay damages |
| Life or bodily-injury accident insurance delay | Excluded under official interpretations | — | Insurance type, accident and payment basis |
| Housing move-in delay compensation | 80% allowance or higher actual expenses | 80% | Qualification as housing move-in delay |
| Unconfirmed cause or character | Overall determination withheld | — | Judgment, agreement and payment statement |
A receipt consisting of KRW 30,000,000 returned principal and KRW 2,000,000 contractual delay damages has gross receipts of KRW 32,000,000 and included principal of KRW 30,000,000.
The starting income for review is KRW 2,000,000.
If a row contains only delay damages, do not deduct the principal again.
If principal is entered as a separate row, do not also include it in another row.
Enforcement Decree Article 41(8) distinguishes damage exceeding the loss inherent in the original contractual payment.
It also addresses a refund not exceeding the total amount originally paid.
Disputed principal, prior partial refunds and an unclear allocation require the original agreement and settlement ledger before a tax conclusion can be drawn.
Ordinary contractual penalties and delay damages do not automatically receive the 60% expense allowance applicable to certain service income.
Income Tax Act Article 37(2) permits documented ordinary costs corresponding to the relevant gross income.
The default is zero.
Do not allocate the entire legal bill to taxable damages without evidence, or deduct costs already reflected by the payer a second time.
Housing move-in delay compensation has a specific 80% expense rule under Enforcement Decree Article 87(1).
The calculator uses the greater of 80% of the relevant income and documented actual expenses for that category.
It does not transfer this allowance to lease-deposit delay damages or ordinary insurance delay payments.
Expenses above the relevant income are not automatically offset against other income.
Official interpretation Standard-2020-Income-0106, dated 2020-07-16, supports deducting the portion of legal fees corresponding to miscellaneous gross income.
Attribution, who bore the expense and any separately reimbursed litigation costs can change the amount.
Keep receipts and an allocation supported by the case documents.
Under Income Tax Act Article 84, the relevant net miscellaneous income of KRW 50,000 or less per case is exempt under the minimum-income rule.
The test uses income after expenses, not the gross receipt.
KRW 50,000 is exempt; at KRW 50,001 the entire net amount is taxable, rather than only the excess KRW 1.
A contractual penalty of KRW 30,000 and delay damages of KRW 30,000 from the same case must use the same case number.
Their combined net income is KRW 60,000.
Do not create separate exemptions by splitting an agreement into rows, installments or payment dates.
Use different numbers only for independent cases and seek advice if the taxable-case boundary is unclear.
A case mixing housing-delay compensation and other taxable categories is withheld for review rather than applying the housing expense allowance across them.
Ordinary miscellaneous-income withholding is 20% national tax.
Local withholding is 10% of the national amount, commonly described as 22% combined.
The estimate treats a case as a single payment and discards amounts below KRW 10 separately for national and local withholding.
Actual payment units and the official withholding statement must be checked.
An already received contractual deposit converted into a penalty is excluded from withholding by Income Tax Act Article 127(1)(6)(b).
This is not an income-tax exemption.
A seller returning the original deposit and paying an additional damages amount does not make the newly paid damages a retained-deposit conversion.
Review that additional amount under the ordinary contractual category.
When actual withholding exceeds the estimate, the result shows a correction-review difference.
It identifies an amount to discuss with the payer when checking classification and the certificate; it is not an approved refund.
A later return-level refund or extra payment is a different calculation.
Do not add the correction difference to a return refund and count the same amount twice.
An event combining a retained-deposit conversion with a small ordinary damages component can produce ordinary national withholding below KRW 1,000.
Income Tax Act Article 86 then prevents collection of that small tax, so expected withholding is zero without treating zero collection itself as a failure.
Separate-tax eligibility and filing for this mixed situation remain under review; check the payment statement and tax-office guidance.
Optional separate taxation depends on the relevant annual net miscellaneous income being KRW 3,000,000 or less.
KRW 2,000,000 from this settlement plus KRW 1,500,000 from other ordinary miscellaneous income gives KRW 3,500,000 and requires comprehensive-tax review.
Do not add income governed by mandatory separate or mandatory comprehensive treatment to this ordinary-income field.
The withholding condition in Income Tax Act Article 14(3)(8)(a) also matters.
Statutory retained-deposit conversions are included in the exception, but an ordinary payer failing to withhold is different.
An amount below KRW 3,000,000 alone does not prove eligibility.
Confirm correction and withholding with the payer before treating a separate-tax option as available.
The comprehensive comparison recalculates tax before and after adding all entered annual miscellaneous income.
The national brackets are KRW 14,000,000; 50,000,000; 88,000,000; 150,000,000; 300,000,000; 500,000,000; and 1,000,000,000, at rates of 6%, 15%, 24%, 35%, 38%, 40%, 42% and 45%.
A 10% local-tax assumption is added to the national increase.
Recalculation captures a bracket crossing instead of multiplying all income by one marginal rate.
A retained deposit converted into a penalty can qualify for optional separate taxation below the annual KRW 3,000,000 threshold while still requiring filing and payment in May of the following year.
Income Tax Act Articles 64-3(1), 70(2) and 73, together with Local Tax Act Article 93(16), distinguish the tax calculation from the withholding and filing rules.
Zero withholding, an available separate option and a required return can all be correct at once.
Where ordinary withholding is complete and optional separate treatment is valid, that income alone may not require a final return.
Choosing comprehensive treatment to seek a refund, or having another filing obligation, changes the position.
The filing message covers only the income entered in this tool and does not exempt all of your income from filing.
The lower comparison is a scenario before tax credits, reductions and individual adjustments.
Check deductions, credits, existing prepayments and possible health-insurance effects before filing.
For 2026 income, May of the following year means May 2027.
Holiday adjustments, extensions and special filing deadlines are outside the calculation.
Gross receipts of KRW 32,000,000, included principal of KRW 30,000,000 and zero actual expenses produce taxable income of KRW 2,000,000.
Ordinary withholding is KRW 400,000 national plus KRW 40,000 local, totaling KRW 440,000.
With no other miscellaneous income and an existing tax base of KRW 20,000,000, additional comprehensive tax is KRW 330,000 versus KRW 440,000 separate tax: a comparison difference of KRW 110,000.
If an already held KRW 2,000,000 deposit becomes a penalty, with no expenses, taxable income is KRW 2,000,000 but expected withholding is KRW 0.
With no other income in this annual category, KRW 440,000 separate taxation can be compared, but filing and payment remain necessary.
Additional newly paid compensation is not the same withholding exception.
Housing move-in delay compensation of KRW 1,000,000 with no higher actual expenses receives an expense allowance of KRW 800,000.
Net taxable income is KRW 200,000 and ordinary withholding is KRW 44,000.
In a separate comparison example, adding annual miscellaneous income of KRW 3,000,000 to an existing tax base of KRW 49,000,000 produces KRW 693,000 additional comprehensive tax versus KRW 660,000 separate tax, making separate treatment KRW 33,000 lower.
For a traffic or medical accident, separate bodily-injury damages, lost earnings, emotional harm and delay damages using the actual legal cause.
Do not treat every delay amount as interest income or every settlement as exempt.
Official interpretation Written-2022-Withholding-1287, dated 2023-08-24, distinguishes tort damages from statutory delay amounts arising from contractual breach or cancellation; the cause remains a factual question.
For insurance delays, identify the insurance category first.
Ministry of Economy and Finance Income Tax Division interpretations -498 and -27 exclude delay damages for life, bodily-injury accident and death insurance benefits from miscellaneous income.
These do not create a blanket exclusion for property-insurance delays.
Select unconfirmed if the insurance type or payment basis cannot be established.
For a late lease-deposit refund, distinguish returned principal from contractual delay damages and check the payer withholding.
If the delay-damages amount has not yet been established, use the lease-deposit late-interest calculator first, then enter the agreed or verified components here.
This tool reviews tax treatment rather than establishing the civil claim amount.
Business revenue replacement, wages in arrears, retirement or dismissal-related payments, corporate and nonresident recipients, and foreign judgments are outside automatic classification.
Contractual loan interest may be interest income rather than miscellaneous damages.
Exclusion from miscellaneous income does not determine every other income tax, inheritance or gift-tax issue.
An error or unresolved classification prevents an overall definitive tax result.
Known arithmetic subtotals can still help identify missing information, but read the pending reasons before relying on them.
The calculator does not submit a tax return or correction claim and does not decide the tax authority factual assessment.
Share the review report with the payer or a tax professional together with the supporting documents.
No.
First distinguish returned principal, personal tort damages and contractual breach or cancellation damages.
The 22% figure describes ordinary taxable miscellaneous-income withholding, not a rate on every settlement total.
No.
Substance and the actual legal cause govern the classification.
Renaming contractual damages does not make them personal tort compensation.
Check the judgment and settlement terms.
No.
Official interpretations exclude delay damages for life, bodily-injury accident and death insurance benefits from miscellaneous income.
Property-insurance delays require taxable-income review.
Unconfirmed insurance type or payment basis must remain under review.
No standard 60% allowance applies to ordinary penalties.
Review documented costs corresponding to the taxable income.
Housing move-in delay compensation has a distinct 80% rule, compared with actual costs if higher.
No.
At net income of KRW 50,001 per case, the full amount is taxable.
Aggregate components of the same case and do not create repeated exemptions by splitting rows.
No.
A statutory retained-deposit conversion is excluded from withholding, but can still be taxable.
Optional separate taxation may be available at annual net income of KRW 3,000,000 or less, while filing and payment are still required the following May.
Newly paid additional damages are a different withholding category.
It uses the relevant annual net miscellaneous income after expenses and applicable exemptions.
Include other ordinary income eligible for optional separate treatment, without mixing in different mandatory tax regimes.
No.
It compares entered actual withholding with the expected amount.
Confirm the certificate and classification with the payer.
The final return refund or extra liability also depends on total income, credits and other adjustments.
The checked consolidated Income Tax Act is MST280405, effective 2026-07-01; the Enforcement Decree is MST290841, effective 2026-10-01.
Local Tax Act MST282559 and the following official interpretations were also checked on 2026-11-07.
Future review must check amendments, the actual cause, insurance type, expense evidence, the taxable-case boundary, withholding and attribution year.
Separate principal and damages, then compare the result with the withholding certificate.
If the civil claim amount has not been established, use a related calculation first and return here to review tax and filing.
Save the report together with the original evidence.