Why compare Korean interim income tax with the payment notice?
A business owner who earned more last year but experienced lower income in the first half of this year may receive a November comprehensive income tax notice that feels out of step with current cash flow.
Paying the full notice can put pressure on household expenses and working capital. Ignoring it merely because sales declined can create a payment problem.
This calculator compares the notice with an interim estimate based on actual first-half tax income and checks the statutory filing conditions before presenting a payment candidate.
It is intended for individual business owners with variable income, family members helping prepare payment funds, and staff assembling the January–June ledger.
The main outputs are estimate-filing availability, the mandatory filing branch for certain taxpayers without reference tax, the permitted advance-payment difference, and initial versus deferred cash.
Annual sole-proprietor tax and corporate interim tax involve different decisions. Follow the related calculators when you need those wider comparisons.
Korea-specific 2026 national income tax
The calculation uses Korean rules for ordinary resident business owners, with amounts in KRW. Local income tax and VAT are not added.
Interim estimate filing uses actual first-half income; it is distinct from annual estimation using simplified or standard expense ratios.
This page produces a review sheet and does not submit a return or automatically cancel a payment notice.
Confirm eligibility and the correct filing branch first
When reference tax exists
An ordinary eligible taxpayer generally receives a notice based on half the reference tax.
If tax estimated from first-half income is below 30% of reference tax, a timely interim estimate return can replace the notice determination.
An estimate lower than the notice does not permit switching methods when the statutory condition is not met.
When reference tax does not exist
For a resident without reference tax, a double-entry bookkeeping obligation and qualifying first-half business income can trigger mandatory filing under Article 65(5).
The calculator asks for these confirmations separately. Unknown status is not treated as no obligation or zero tax.
Review whether a return is required independently from whether the payment is small.
- Review the new-business exclusion first if you were not in business at the beginning of 2026 and started during 2026.
- Closure or suspension, specified-income-only taxpayers and taxpayer associations have separate exclusion conditions. Use official Hometax guidance and competent tax-office records.
Lower revenue or an accounting loss alone is not a confirmed exclusion.
- A received notice is not automatically cancelled by an exclusion candidate on this page.
Reconcile business history, closure dates and occasional assessments, then verify any required correction.
Reference tax and the notice are different amounts
Interim reference tax
Income Tax Act Article 65(7) combines relevant previous-period interim tax, final-return payments, additional assessments, late-return payments and additional voluntary payments, then subtracts refunds.
Some components include penalties, and a correction following a refund claim may affect the confirmed total.
Do not substitute a single bank debit or last May payment for the full reference amount. Obtain the complete confirmed figure from Hometax and your tax records.
Actual versus projected notice
The ordinary projected notice equals reference tax × 50%, with the remainder below KRW 1,000 discarded.
Use the actual amount when the notice is confirmed. Before confirmation, the projected-notice mode can provide a planning reference.
When the received notice differs from that ordinary formula, the calculator withholds method selection until you review reference-tax errors, corrections or special rules.
Doubling a notice to reconstruct reference tax can miss rounding or adjustments and change the 30% decision.
With reference tax of KRW 40,000,000, the ordinary notice is KRW 20,000,000 and the estimate-filing threshold is KRW 12,000,000.
Taking 30% of the KRW 20,000,000 notice would give KRW 6,000,000, which is the wrong statutory denominator.
Separate amount and source-confirmation fields help prevent this mistake.
Calculate first-half income and deductions in the statutory order
- First-half business income equals January–June revenue minus tax-eligible expenses.
A business loss is preserved as a negative value when expenses exceed revenue.
- Add other comprehensive tax income only where aggregation and loss offsetting are permitted.
Distinguish gross payments received from taxable income after eligible expenses or adjustments.
- Double first-half comprehensive income, then subtract eligible carried-forward losses and comprehensive income deductions once each.
A negative resulting base is treated as zero for the tax calculation.
- Apply the ordinary progressive schedule to the annualized base and divide that gross tax by two.
Only then subtract eligible credits/reductions, national withholding and occasional assessments through June 30.
Annualized base = (first-half comprehensive income × 2) − carryforward losses − income deductions
Estimate = (annual progressive tax ÷ 2) − first-half credits − withholding − occasional assessments
The complete statutory formula in Article 65(8) also deducts assessed tax from preliminary land/building trading-gain declarations.
That component is assumed zero in this ordinary-business scope; property-dealer special rules require separate review.
The calculator does not grant credits beyond their legal limits. Excess deductions produce a zero payment reference, not a determined refund.
Korean 2026 comprehensive income tax progressive rates and quick deductions| Annualized tax base | Rate | Quick deduction |
|---|
| From KRW 0 through KRW 14,000,000 | 6% | KRW 0 |
| Over KRW 14,000,000 through KRW 50,000,000 | 15% | KRW 1,260,000 |
| Over KRW 50,000,000 through KRW 88,000,000 | 24% | KRW 5,760,000 |
| Over KRW 88,000,000 through KRW 150,000,000 | 35% | KRW 15,440,000 |
| Over KRW 150,000,000 through KRW 300,000,000 | 38% | KRW 19,940,000 |
| Over KRW 300,000,000 through KRW 500,000,000 | 40% | KRW 25,940,000 |
| Over KRW 500,000,000 through KRW 1,000,000,000 | 42% | KRW 35,940,000 |
| Over KRW 1,000,000,000 with no upper limit | 45% | KRW 65,940,000 |
Apply the strict below-30% condition before rounding
Where reference tax exists, the comparison is unrounded estimate < reference tax × 30%.
The statute requires below 30%, rather than at or below 30%; equality does not qualify.
The calculation preserves fractions of a won using integer units for the legal comparison. A rounded display percentage or truncated payment cannot change eligibility.
Exactly 30%
Assume reference tax of KRW 10,000,000, an annualized base of KRW 50,000,000 and annual progressive tax of KRW 6,240,000.
Half-year gross tax of KRW 3,120,000 minus a KRW 120,000 credit gives an estimate of KRW 3,000,000.
It equals 30% of reference tax. The estimate is below the KRW 5,000,000 notice but does not qualify for optional estimate filing.
One won below the threshold
Under the same assumptions, a confirmed credit of KRW 120,001 gives an unrounded estimate of KRW 2,999,999.
This is strictly below KRW 3,000,000 and can qualify for estimate filing.
The payment reference is KRW 2,999,990 after discarding the remainder below KRW 10. Eligibility was decided using the original estimate, not that payment amount.
When no reference tax exists, the page does not invent a ratio by dividing by zero.
It uses the separate bookkeeping and first-half business-income confirmations to review mandatory filing.
Unknown reference tax must not be entered as zero, and an inflated reference amount must not be used to force eligibility.
Separate small-amount noncollection from filing and rounding
Zero payment does not mean no return
Income Tax Act Article 86 sets the interim small-amount noncollection threshold at strictly below KRW 500,000.
An eligible unrounded estimate of KRW 499,999 gives a zero payment candidate, but an estimate return is still needed to replace the existing notice determination.
Exactly KRW 500,000 is payable under this rule. A mandatory no-reference filer must also keep the filing question separate from the small payment result.
The projected notice uses the special below-KRW-1,000 truncation in Article 65(1). The estimate payment reference uses below-KRW-10 truncation under Management of the National Funds Act Article 47.
For example, reference tax of KRW 999,999 gives a projected ordinary notice of KRW 499,000, a noncollection candidate.
Rounding both methods to the nearest thousand or ten thousand can alter thresholds and installment amounts.
Reconcile the unrounded estimate and the amount actually shown on the payment form separately.
Worked example: compare a notice with a confirmed first-half ledger
Assume an existing individual business owner with reference tax of KRW 40,000,000 and a confirmed notice of KRW 20,000,000.
First-half revenue is KRW 80,000,000 and eligible expenses are KRW 65,000,000, with no other income or loss carryforward.
Income deductions are KRW 3,000,000; first-half credits/reductions are KRW 100,000, national withholding is KRW 300,000 and occasional assessments are zero.
These are illustrative ledger amounts, not evidence that any particular expense or deduction is legally eligible.
- Business income: 80,000,000 − 65,000,000 = KRW 15,000,000.
- Annualized base: 15,000,000 × 2 − 3,000,000 = KRW 27,000,000.
- Annual progressive tax: 27,000,000 × 15% − 1,260,000 = KRW 2,790,000.
- Interim estimate: 2,790,000 ÷ 2 − 100,000 − 300,000 = KRW 995,000.
- The reference-tax ratio is 2.4875%, below 30%. The permitted advance-payment difference is 20,000,000 − 995,000 = KRW 19,005,000.
The KRW 20,000,000 notice permits a maximum KRW 10,000,000 installment, leaving a minimum initial payment of KRW 10,000,000.
The KRW 995,000 estimate candidate is at or below the KRW 10,000,000 installment threshold, so the entire amount is needed at the first payment date.
With KRW 2,000,000 available, the estimate candidate has zero cash shortfall.
The total advance-payment difference and the difference in initial cash are separate measures. Do not compare only the full notice with current cash when installments are available.
Plan installment limits and the first cash requirement
When payable tax exceeds KRW 10,000,000, review Income Tax Act Article 77 and Enforcement Decree Article 140.
For total tax up to KRW 20,000,000, the amount above KRW 10,000,000 may be deferred. Above KRW 20,000,000, no more than 50% may be deferred.
Exactly KRW 10,000,000 has no installment allowance. Exactly KRW 20,000,000 follows the excess-over-KRW-10,000,000 rule.
The initial-cash checkbox lets you compare using the maximum legal installment with paying everything at once.
Interim income tax installment boundaries and minimum first payments| Total payable | Maximum deferred | Minimum first payment |
|---|
| KRW 10,000,000 | KRW 0 | KRW 10,000,000 |
| KRW 10,000,010 | KRW 10 | KRW 10,000,000 |
| KRW 20,000,000 | KRW 10,000,000 | KRW 10,000,000 |
| KRW 30,000,010 | KRW 15,000,000 | KRW 15,000,010 |
The National Tax Service gives 2026-11-30 as the ordinary 2026 filing/payment deadline and 2027-02-01 as the ordinary final installment deadline.
The January 31, 2027 Sunday date is moved under the deadline rule in Framework Act on National Taxes Article 5.
Disaster relief, a special extension or an unconfirmed personal notice can change the actual payment schedule. In those cases, the page keeps the statutory filing reference but withholds actual payment/installment dates and scheduled cash shortfall.
Use the calculator and prepare evidence before filing
- Confirm ordinary Korean-resident business scope and any new-business, closure or specified-income exclusion.
If no reference tax exists, also confirm the bookkeeping obligation and the first-half business-income condition.
- Obtain reference tax and the actual notice amount separately from Hometax.
A projected amount is a planning reference, not proof that a notice was issued.
- Enter January–June revenue, eligible expenses and other eligible tax income from the ledger.
Separate loss carryforwards and income deductions from first-half credits, national withholding and occasional assessments.
- Select the records-confirmed checkbox only after checking documentation and legal application limits.
Unverified expenses or deductions must not be used just to reduce the calculated amount.
- Review filing status, the unrounded 30% comparison, small-amount noncollection and installments, then save the review sheet.
For an eligible estimate filing, prepare the income calculation support and return, and reconcile submission, notice cancellation and payment in Hometax.
Records to collect
- Previous interim/final/additional payment and refund records, plus the current notice
- First-half sales, purchases, payroll and other ledger documents; tax-adjustment support where needed
- Eligible loss-carryforward records and comprehensive income deduction evidence
- Credits/reductions, national withholding and occasional assessments through June 30
- Your payment deadline, extension confirmation, installment plan and available cash
Practical uses and the limits of automatic calculation
Lower income and household cash
A business experiencing reduced revenue can reconcile actual tax income and eligible expenses before checking the filing threshold.
Family members can compare available cash with the first payment candidate to assess pressure on household funding.
A sales-decline percentage is not the legal filing test, and the advance-payment difference is not an annual tax saving.
Prior-year losses and no-reference taxpayers
A taxpayer with no prior payable tax may still need to review filing when double-entry status and first-half business income apply.
Separating confirmed absence of reference tax from unknown records helps avoid treating missing information as no obligation.
Review new-business exclusions before applying the mandatory no-reference branch.
The KRW 1 trillion maximum for each amount is a numerical and interface limit, not a statutory deduction cap.
The calculator does not determine expense eligibility, industry-specific bookkeeping duties, financial-income comparison taxation or dividend gross-up, rental-loss restrictions, land/building trading-gain special rules, or special deduction entitlement.
Use the outside-scope setting and tax-adviser calculations for complex income or special rules.
Local income tax and VAT are excluded. The withholding input must use national income tax rather than the entire 3.3% combined withholding amount.
Initial amounts are hypothetical and unconfirmed status is different from zero tax.
If the actual notice and the ordinary projection disagree, investigate the reason before selecting a smaller number.
The TXT review records inputs and calculation reasons. It does not replace an official tax return or payment receipt.
Frequently asked questions
Can I file an estimate whenever it is lower than my notice?
A lower amount alone does not satisfy the filing condition.
For an ordinary taxpayer with reference tax, the unrounded estimate must be strictly below 30% of interim reference tax.
Use reference tax as the denominator, not the payment notice; exactly 30% is not below the threshold.
Can I ignore my notice if the estimate is below KRW 500,000?
An eligible estimate below KRW 500,000 produces a zero payment candidate.
You must still submit the required interim estimate return on time to replace the existing notice determination.
A zero displayed amount does not complete that process: verify return acceptance and notice cancellation in Hometax.
What if I have no reference tax but must keep double-entry books?
When no exclusion applies and both the double-entry obligation and qualifying first-half business income are confirmed, review mandatory estimate filing under Income Tax Act Article 65(5).
A small payment amount does not remove the separate filing condition.
Do not infer bookkeeping obligations merely from current sales or the name of your ledger; check the applicable prior revenue, occupation and tax records.
Does a person who starts a business this year have mandatory filing?
First review the Article 65(1) exclusion for a person who was not in business at the beginning of 2026 and starts a new business during that year.
No reference tax plus double-entry status must not automatically impose filing on a qualifying new business.
Existing business history or another business establishment requires individual confirmation of the new-business condition.
Do I include other income if my business made a first-half loss?
Include other comprehensive tax income only where aggregation and loss offsetting are permitted.
A business loss does not automatically make every income category tax-free; rental losses and financial-income comparison taxation have separate restrictions.
Enter amounts already verified eligible for aggregation, and use the outside-scope option for special or complex income cases.
Should I double loss carryforwards or income deductions?
Double only first-half comprehensive income, then subtract eligible carryforward losses and comprehensive income deductions once.
Do not arbitrarily halve annual deductions or double their amounts.
Credits, reductions and withholding are different from income deductions: subtract eligible first-half amounts after halving annual progressive tax.
How do installments relate to payment extensions or applications?
This calculator compares statutory installment limits and initial cash under the ordinary schedule.
For a notice, the first payment excludes the amount legally eligible for deferral; an estimate filer must reconcile the installment fields in the return and payment documentation.
Keep an approved extension or payment suspension separate from ordinary statutory installments and confirm your own notice or return instructions.
Does the cash difference reduce my final annual income tax?
The advance-payment difference concerns funding at this interim payment date.
Final annual comprehensive income tax depends on full-year income, deductions and credits, with amounts actually paid as interim tax reconciled in the annual return.
A smaller initial cash requirement is not a permanent annual tax saving.
Official sources and the next action
Official sources were checked on October 7, 2026 (2026-10-07).
Direct National Law Information OPEN API calls verified Income Tax Act MST280405 Articles 55, 65, 77 and 86, and Enforcement Decree MST290841 Articles 123, 124, 125 and 140.
The relevant Act articles take effect on 2026-01-01; the current Act consolidation is effective 2026-07-01, and the decree consolidation is effective 2026-10-01.
Rounding was cross-checked against Management of the National Funds Act MST276079 Article 47, effective 2026-01-02. Deadlines were checked against Framework Act on National Taxes MST289999 Article 5, effective 2026-10-02, and the 2026 National Tax Service guidance.
Recheck progressive rates, estimate-filing and noncollection thresholds, installment limits and your own deadline before using a later rule year.
The ordinary dates on this page do not guarantee the treatment of future temporary holidays or individual payment extensions.
Your next stepCollect the notice records and first-half ledger, then enter confirmed amounts above.
Review the available or mandatory filing status, save the review sheet, and use
Hometax or a tax adviser to verify return submission, notice cancellation and the payment amount.