Compare Korean high-dividend separate taxation before applying
This calculator separates dividends supported by applicable-year company disclosures from other dividends, then compares annual tax with and without an election for the Korean high-dividend relief.
It helps retirees funding living expenses with dividends, investors receiving both interest and dividends, and shareholders with substantial employment or business income.
A high market dividend yield does not establish statutory company eligibility.
Confirm the applicable dividends first, then compare both choices using gross receipts and your other-income tax base.
Korea-specific rules and the decision being compared
All amounts are KRW and calculations use Korean rules for a resident individual receiving dividends in 2026.
The comparison is an election for all confirmed eligible dividends versus no election, not an optimisation of partial elections by company.
For 2026 receipts, review the election with the May 2027 comprehensive income-tax return.
Saving or printing this review does not file an application.
Unknown company facts remain pending instead of automatically becoming eligible dividends.
Read national tax, estimated local tax, the combined annual difference, gross-up and dividend credit together.
Settlement is a separate calculation and remains pending until the actual matching prepayments are confirmed.
The screen is a comparison budget, not a final assessment incorporating every personal credit, relief or insurance consequence.
Treat a displayed conditional estimate as a prompt to reconcile your records before making the filing choice.
Company eligibility depends on disclosures rather than market yield
Entity and payment form
Verify that the dividend is a cash payment from a domestic ordinary listed company.
KONEX-listed companies and excluded investment companies do not qualify for this relief.
ETF and fund distributions and REIT dividends should not be treated as ordinary listed-company dividends.
A stock dividend is not a cash dividend simply because its taxable value can be expressed in KRW.
Entering an excluded product as an ordinary company can change the classification incorrectly.
Dividend maintenance and payout ratio
Prior-business-year dividends must not have decreased below the business year containing the 2024 baseline.
The disclosed payout ratio must be at least 40%, or at least 25% with dividend growth of at least 10% versus the preceding business year.
The boundaries 40%, 25% and 10% are inclusive.
The payout ratio is not the dividend yield on your purchase price.
Use the dividend amount and the correct business-year comparison rather than changes in market valuation.
The payout ratio uses profit distributions and accounting net income.
Where consolidated financial statements are prepared, use net income attributable to the owners of the controlling company.
Do not substitute group-wide net income or sales revenue.
For zero or negative net income, the decree generally deems a 25% payout ratio, with a high-debt exception that can deem it zero.
This calculator does not decide that financial-statement exception: enter the company-disclosed value.
Confirm the applicable-year disclosure before treating the row as eligible.
A company qualifying in a previous year does not automatically qualify for a later payment.
Use gross dividends and a tax base that excludes financial income
- Gross dividend: Enter the amount before national and local withholding, not the net cash credited to your brokerage account.
Combine multiple payments from the same company or list them separately without counting any receipt twice.
Add other ordinary dividends as additional groups and classify their eligibility separately.
- Other interest: Enter gross ordinary interest subject to the national 14% withholding assumption.
Leave out tax-exempt interest, ISA relief income and interest using a different rate, such as non-business lending income.
Those receipts need their own treatment rather than being forced into this model.
- Other-income tax base: This excludes financial income and already reflects applicable income deductions.
It is not annual salary, business revenue, business income before deductions or total comprehensive income.
Using gross salary directly can substantially change the comparison.
Unused deductions extending into financial income require separate review.
- Gross-up eligibility: Confirm whether a dividend is eligible for dividend gross-up if aggregated without this election.
This is a separate question from high-dividend company eligibility.
Do not apply the 11% addition to every dividend or guess its treatment from the company name.
- Prepaid national and local tax: Enter actual withholding and prepayments for all financial and other income included in the comparison.
An unconfirmed amount keeps settlement pending.
A verified zero is valid and differs from an unknown prepayment.
Amounts are whole KRW from zero to KRW 1 trillion, and total financial income must also stay within KRW 1 trillion.
You can enter up to eight dividend groups.
When using several brokers, reconcile the same period of gross receipts and add their matching withholding amounts.
The numeric fields preserve the text being edited, including pasted comma-separated amounts, so you can clear a value and enter a replacement naturally.
The UI applies the supported range to committed numeric values while retaining your draft until editing finishes.
Progressive rates apply to the combined annual eligible dividends
Korean high-dividend national tax brackets and marginal rates including standard local income tax| Annual eligible dividends (KRW) | National marginal rate | National tax formula (KRW) | Including local tax |
|---|
| Up to 20,000,000 | 14% | Total × 14% | 15.4% |
| Above 20,000,000 through 300,000,000 | 20% | 2,800,000 + excess over 20,000,000 × 20% | 22% |
| Above 300,000,000 through 5,000,000,000 | 25% | 58,800,000 + excess over 300,000,000 × 25% | 27.5% |
| Above 5,000,000,000 | 30% | 1,233,800,000 + excess over 5,000,000,000 × 30% | 33% |
These are marginal rates applying to the relevant slice of income.
Do not multiply the entire KRW 300 million by 20%, or the entire KRW 5 billion by 25%.
Eligible dividends of KRW 300 million produce national tax of 58,800,000 KRW; KRW 5 billion produces 1,233,800,000 KRW.
The first KRW 20 million at 14% is available once for the taxpayer-wide annual eligible total, not once per company or brokerage account.
Several dividend groups are therefore combined before this tax function is applied.
The aggregation comparison includes 11% gross-up and a capped credit
Symbols used in the comparison
F is ordinary financial income remaining in a scenario, B is the other-income tax base, and D is the dividend amount eligible for gross-up.
T is 20,000,000 KRW, and TAX is the progressive national income-tax function using 6%, 15%, 24%, 35%, 38%, 40%, 42% and 45%.
The election scenario removes eligible special dividends from F and D before recalculating ordinary tax.
It then adds separate tax on the combined eligible dividends.
- If F does not exceed T, ordinary national tax is TAX(B) + F × 14%.
Under the supported ordinary-withholding scope, no dividend gross-up is applied in this case.
- If F exceeds T, the gross-up eligible excess is E = min(D, F − T), and G = E × 11%.
Interest and dividends ineligible for gross-up consume the threshold first.
The calculation does not automatically add 11% to the entire dividend receipt.
- Method A is TAX(B + F − T + G) + 2,800,000 KRW.
The comparative floor C is TAX(B) + F × 14%.
Take the larger assessed amount, then deduct the smaller of G and assessed tax minus C as the dividend credit.
The credit cannot reduce ordinary tax below that comparative floor.
- Add the special-dividend progressive tax in the election scenario.
Estimated local income tax uses the standard rate and corresponding dividend credit, represented as 10% of national tax before other personal credits or reliefs.
Compare national plus local annual tax across both scenarios.
Removing special dividends can bring remaining ordinary financial income down to KRW 20 million or less.
The aggregation threshold must be tested again after the removal.
Simply subtracting a special-dividend figure from the original aggregation tax does not calculate the elected scenario correctly.
Both annual totals include tax on B, so neither should be described as tax solely on one particular dividend.
This model uses whole-won floors for budget reproducibility; actual filing rounding needs separate confirmation.
Step-by-step preparation and use
- Collect gross 2026 dividend statements and national and local withholding from every broker.
Remove duplicate records for the same payment and reconcile the period covered.
- Check applicable-year KIND disclosures and company records for high-dividend qualification.
Confirm the business years being compared and that the disclosure covers the payment you received.
- Enter entity type, cash-payment status, maintenance versus the 2024 baseline, disclosed payout ratio and dividend growth.
Only confirm the disclosure checkbox after checking the facts; leave unknown facts pending.
- Add other ordinary interest and the tax base excluding financial income.
If losses, additional credits or special tax treatment affect the case, use the comparison as review material rather than final tax.
- Read both annual totals, the difference, gross-up and credit.
Confirm actual matching prepayments before interpreting settlement.
Save the TXT review or print it, then reconcile the disclosures, broker records and application again with the May 2027 return.
The follow-up task is to classify your own receipts and prepare the filing evidence.
Loading an example does not verify any real company, submit a request to a broker or mark a tax return as filed.
When facts or amounts change, the displayed comparison and downloaded review should be regenerated with the updated information.
High-income example: KRW 100 million dividends and a KRW 150 million tax base
Assume a fictional qualifying dividend of 100,000,000 KRW, other-income tax base of 150,000,000 KRW and no other financial income.
The dividend is eligible for gross-up, and other credits and reliefs are excluded.
The example button loads fictional confirmed company facts for illustration, not evidence about any actual company.
Without election
The excess dividend eligible for gross-up is 80,000,000 KRW.
The 11% addition and capped dividend credit are both 8,800,000 KRW in this example.
Baseline tax on other income is 37,060,000 KRW, and combined national tax after financial-income aggregation is 64,804,000 KRW.
Add estimated local tax of 6,480,400 KRW for an annual total of 71,284,400 KRW.
Electing for all eligible dividends
Special-dividend national tax is 18,800,000 KRW.
Adding other-income national tax of 37,060,000 KRW gives 55,860,000 KRW nationally.
Local tax is estimated at 5,586,000 KRW.
The annual combined total is 61,446,000 KRW, which is 9,838,400 KRW below non-election.
The national-only saving is 8,944,000 KRW.
An earlier planning example used a 10% gross-up and a KRW 9,440,000 difference; the implementation and both guides use the verified current 11% rule instead.
The example includes illustrative dividend withholding of 14,000,000 KRW nationally and 1,400,000 KRW locally, but does not confirm prepayments on other income.
Its prepaid-confirmation checkbox remains off, so a final additional payment is not asserted before reconciliation.
Low-income example: applying is not always favourable
No other tax base and KRW 30 million of eligible dividends
Assume 30,000,000 KRW of fictional gross-up eligible dividends and a zero other-income tax base.
Without election, national tax reaches the comparative floor of 4,200,000 KRW.
The separate progressive calculation gives 4,800,000 KRW nationally.
Including local tax, annual totals are 4,620,000 KRW without election and 5,280,000 KRW with election.
Non-election is therefore favourable by 660,000 KRW.
Company qualification and an individual tax saving are separate questions.
If all ordinary financial income stays within KRW 20 million, both scenarios have equal tax under this supported withholding scope.
A large other-income amount also does not produce savings when no dividend is eligible for the election.
Retirement, reduced employment income or a change in business income can alter the result even when dividend receipts are unchanged.
Review each year using the relevant facts instead of assuming the previous filing choice remains favourable.
Interpret the result in your household situation
Retirees receiving interest and dividends
Separate eligible dividends from remaining ordinary interest.
Check whether the election brings remaining financial income below the aggregation threshold, and whether a lower other-income base makes non-election favourable.
A tax saving is not necessarily immediate extra monthly cash: distinguish withholding at payment from settlement with the later return.
Investors with employment or business income
Enter the tax base after relevant income deductions rather than salary or turnover.
Confirm gross-up treatment for ordinary dividends and compare the complete annual totals.
Where business reliefs, pension-account credits or donation credits are substantial, this model alone cannot determine the final filing choice.
The displayed difference is non-election total minus election total.
A positive amount means the election scenario has lower tax; a negative amount means non-election has lower tax.
Positive settlement represents modelled additional tax due and negative settlement a modelled refund.
Actual refunds depend on matching prepayments, filing credits and the assessed return.
Do not confuse a national-only difference with the difference including local tax, or subtract withholding twice from an annual burden.
Scope, filing cautions and the sunset
Cases requiring separate review
The model does not cover non-business lending interest withheld at 25%, foreign financial income not withheld domestically, foreign-tax credits, participating joint-business dividends, losses or unused deductions extending to financial income.
Do not hide unused deductions by entering a zero other-income tax base and confirming the scope.
ISA, pension-account and REIT relief income belongs outside this ordinary financial-income list.
Other tax credits, health-insurance premiums and penalties are also excluded.
Check the company disclosure associated with the dividend resolution and the applicable year.
Prior-year eligibility is insufficient on its own.
The official guidance discusses both existing holders and investors who newly acquire shares in 2026, provided they receive applicable 2026 dividends.
Reconcile the actual payment records rather than inferring eligibility from purchase date or shareholder size.
The statutory sunset concerns dividends arising through the business year containing 2028-12-31.
For a December year-end company, official guidance includes dividends received in 2029 and filed in May 2030.
It is not simply a restriction to payments received by the end of 2028.
This screen nevertheless calculates only 2026 receipts and does not pre-apply future rules.
Recheck actual filing rounding and transaction-level withholding, because the calculator floors model amounts to whole won for comparison budgets.
Frequently asked questions
Does a 4% dividend yield make a company eligible?
No.
Market yield and statutory payout ratio are different.
Verify the company disclosure and applicable-year conditions.
Is the full dividend taxed at 20% after election?
No.
The first KRW 20 million of the combined eligible annual amount uses a 14% national rate.
Higher rates apply to the relevant excess slices, with all qualifying companies combined.
Will financial income below KRW 20 million produce a saving?
Under the supported ordinary-withholding scope, non-election also uses 14%, so both scenarios are equal.
An election does not automatically reduce tax.
Can elected dividends still receive the dividend credit?
Special dividends removed from aggregation do not receive aggregated dividend gross-up or that credit.
Only remaining ordinary dividends are recalculated for those items.
Can REITs and ETFs be entered as excluded entities?
They are excluded from this high-dividend relief.
Income using a separate REIT, ISA or pension relief must also be left out of the ordinary 14% comparison scope and reviewed with its own rules.
Can annual tax before prepaid confirmation be used as additional tax due?
No.
Annual tax and settlement are different.
Reconcile actual national and local prepayments for the same income scope before interpreting additional payment or refund.
Must the dividend be received before the end of 2028?
The law refers to the business year containing 2028-12-31.
Check the business-year condition together with the possible 2029 receipt and 2030 filing for December year-end companies.
Does saving the review submit my application?
No.
Saving and printing create local review material.
You must check submission of the required application with the May 2027 return yourself.
Official sources and your next checks
Sources were checked directly through the National Law Information OPEN API on 2026-10-05.
The Restriction of Special Taxation Act, MST284389 Article 104-27, and its Decree, MST288915 Article 104-24, use the current 2026-09-18 versions.
The relief began on 2026-01-01, and the decree provision was newly established on 2026-02-27.
Income Tax Act MST280405 Articles 14, 17, 55, 56, 62 and 129 provide the ordinary financial-income rules and 11% addition, with the relevant provisions dated 2026-01-01.
Its Decree MST290841 Article 116-2 uses the current 2026-10-01 version.
Local Tax Act MST282559 Articles 92, 93 and 103-13 and Local Tax Relief Act MST286607 Articles 95 and 167-6 provide corresponding local treatment.
- Restriction of Special Taxation Act Article 104-27 · eligibility, rates, election and disclosure
- Decree Article 104-24 · cash dividends and payout ratios
- Income Tax Act Article 17 · 11% dividend gross-up
- National Tax Service guidance dated 2026-03-09 · application period and filing process
- Local Tax Relief Act Article 167-6 · local rates at 10% of the special national rates
Before the next filing, recheck company disclosures, the gross-up rate and credit limit, the sunset, national and local rounding, and the actual application form.
If your records differ from the review assumptions, correct the inputs and compare again.
Keep the result together with the evidence that supports each company classification.