What do the premises and payroll components of resident tax cover?
Filing Korean income tax or VAT does not settle every resident-tax obligation of a business.
The premises component concerns a business location and its floor area, while the payroll component concerns wages paid for that location.
This calculator separates their ordinary filing estimates and distances from the relevant thresholds, helping you identify which building records and payroll records need another check.
These are different from individual resident tax billed to a household address and local income tax associated with income tax.
If one owner operates several locations, first allocate floor area and payroll to the correct business location.
Combining branches or assigning all workers to the head office can change the exemption test.
A shared business registration number alone does not establish that locations should be combined.
Keep the periods separateThe premises result is an annual amount and the payroll result covers one selected payment month.
They are not added together as an annual tax total.
A calculation does not prove filing or payment: check the actual return receipt and payment record.
All figures use Korean rules for 2026 and Korean won, rather than another country’s resident or payroll tax system.
Documents and units to prepare
Premises records
Prepare the location’s status on July 1, prior-year VAT taxable turnover or gross receipts for a VAT-exempt business, corporate capital or contributions, building records and the lease.
Use square metres, not pyeong.
Include allocated common space in total area, then separately identify any legally excluded area.
Payroll records
Prepare payroll records for the twelve months including the selected payment month and records of opening, suspension or closure.
Amounts are whole KRW, not units of ten thousand won.
A blank amount means information is missing; zero means you have established a genuine zero.
Identify eligible months and excluded pay before entering totals.
Prefilled figures and rates are fictional examples explaining the workflow.
Enter the actual municipality and check its ordinance.
Typing a city or district name does not automatically select its rates.
Tick the rate confirmation only after comparing the displayed numbers with the applicable ordinance or municipal guidance.
Basic premises tax for individuals and corporations
Under Local Tax Act Article 75 and Enforcement Decree Article 79, an ordinary sole proprietor first checks whether prior-year VAT taxable turnover was at least KRW 80 million.
A VAT-exempt business uses gross receipts, rather than net profit or every bank deposit.
Exactly KRW 80 million meets this ordinary threshold.
A corporation’s basic tax depends on its capital tier; do not substitute sales revenue for corporate capital.
2026 Korean resident tax statutory basic amounts by entity and corporate capital| Entity and capital tier | Basic tax (KRW) |
|---|
| Ordinary qualifying sole proprietor | 50,000 |
| Corporate capital up to KRW 3 billion | 50,000 |
| Capital above KRW 3 billion through KRW 5 billion | 100,000 |
| Capital above KRW 5 billion | 200,000 |
| Other corporations | 50,000 |
An ordinance may adjust the basic amount within Article 81’s permitted range.
The multiplier field treats the statutory amount as 100%; enter the locally confirmed percentage.
Exclusions involving tobacco retailers, coal-briquette or grain retailers, street vendors, kindergarten or childcare operators, and mixed business activities require separate review.
The calculator does not infer an exclusion from an industry name.
The 330 m² threshold is not an area deduction
Separate total area from exclusions
Enforcement Decree Article 78 distinguishes qualifying employee health and welfare facilities and other legally excluded facilities from business floor area.
Calling a room a cafeteria or rest area does not establish eligibility: check its actual use and conditions.
For shared premises, identify actual use; where this cannot be clearly separated, allocation by the exclusive-area ratio may be relevant.
The ordinary area rate is KRW 250 per square metre and Article 82 exempts the area component at 330 m² or less.
Once the threshold is exceeded, the rate applies to the whole taxable area, not merely the excess.
Decree Article 82 discards fractions below one square metre when calculating the tax base, so the screen displays both net area and the whole-m² base.
If net area is above 330 but below 331 m², this calculator withholds the filing amount pending confirmation of the fractional threshold treatment.
Selecting the KRW 500 pollution rate requires confirmation of the conditions in Decree Article 83, including relevant permits, reports, inspection findings and administrative orders.
Merely generating waste does not establish this classification.
The statutory pollution rate is separate from the ordinary area-rate ordinance adjustment; selecting it changes the applied rate to KRW 500/m².
Local education tax and municipal rates
Premises tax = basic amount × local multiplier + area tax
Education tax = locally adjusted basic amount × education rate
Local Tax Act Article 151 applies education tax to the basic component of premises resident tax.
Do not multiply the combined basic and area amounts by the education rate.
Do not add education tax to the payroll component.
Equal floor areas can therefore produce different totals when the basic capital tier or municipal education rate differs.
The standard education rate is 10% of basic tax, generally 25% in cities with at least 500,000 residents.
Check the urban population test for urban-rural integrated cities, the 10% rule for eup/myeon rural areas, transitional merger ordinances and any permitted local adjustment.
A metropolitan-region address alone does not select the correct rate.
This calculator assumes separate truncation below KRW 10 for premises tax and education tax; reconcile that assumption with Local Accounting Act Article 55 and the actual return.
The KRW 180 million monthly payroll exemption test
Local Tax Act Article 84-4 and Decree Article 85-2 set the ordinary exemption threshold at average monthly payroll of KRW 180 million.
This is KRW 3.6 million multiplied by 50; it is not an automatic exemption for businesses with fewer workers.
An average exactly at the threshold is within the exemption.
Above it, the applicable payroll rate is applied to the selected month’s taxable payroll.
Separate the test from the tax base
First divide payroll for eligible months by the number of those months and compare the average with the threshold.
If the average exceeds the threshold, apply the standard 0.5%, or the confirmed local rate, to the full current taxable payroll.
Do not tax the average itself and do not subtract KRW 180 million from current payroll.
The historical average and current payroll serve different purposes.
Payroll exclusions are broader than income-tax-exempt wages alone.
Decree Article 78-2 also addresses maternity or parental leave pay, certain returning workers and substitutes, and qualifying long-service allowances.
Service allowances have conditions involving location, SME status, service period and caps, so do not exclude every employee allowance.
If Article 84-5’s SME employment support deduction is relevant, leave the general-case confirmation unchecked and obtain a separate calculation.
Organising the trailing period and partial operating months
The averaging period normally covers twelve months including the month in which the liability arises.
For a September 2026 payment, begin with October 2025 through September 2026.
If the business is younger than twelve months, use the actual period from its opening month to the selected month.
Do not insert zero-pay months before opening and divide by twelve.
For an opening, suspension or closure month with fewer than 15 operating days, exclude both that month’s payroll and the month itself.
Removing only the pay understates the average; removing only the month can overstate it.
When no eligible averaging months remain, the calculator does not establish an average or a payroll filing amount.
The payment month itself can be an excluded averaging month.
In that case the historical total and the payment month’s taxable payroll cover different amounts, so select the corresponding checkbox.
Otherwise, current-month payroll cannot exceed the period total containing it.
The annual premises rule for continuous suspension of at least one year as of July 1 is a separate test from removing a short operating month from the payroll average.
Worked calculations
330 m² versus 331 m²
Assume an ordinary sole proprietor with KRW 80 million prior-year turnover, KRW 50,000 basic tax and a 10% education rate.
At 330 m² the total is KRW 55,000 with no area tax.
At 331 m² the area component is 331 × 250 = KRW 82,750; education tax is KRW 5,000 and the total is KRW 137,750.
Using a 25% education rate gives KRW 145,250.
Using the pollution rate of 500 with 10% education tax gives KRW 220,500.
Average versus current payroll
Eligible payroll of KRW 2,400,000,000 over 12 months produces an average of KRW 200,000,000.
That exceeds the threshold; with current payroll also KRW 200,000,000, the payroll tax is KRW 1,000,000.
An average exactly KRW 180,000,000 produces zero payroll tax.
A new business with KRW 1,000,000,000 over five eligible months also has a KRW 200,000,000 average.
These examples assume confirmed classifications and ordinances, with no additional relief or employment deduction.
The area comparison changes net area while keeping the same entity and rates.
Scenario breakdowns shown before confirmation do not establish filing amounts.
Compare each line with supporting records before transferring anything to an actual return.
Steps and filing dates
- Select one location and confirm the rule year, payment month and municipality.
- Enter verified ordinance rates, including education tax, and compare the premises records.
- Prepare payroll exclusions and eligible months, then enter the period total and current payroll.
- Resolve the review reasons separately for each tax and save the report for municipal or tax-adviser review.
- Check the actual Wetax return and payment records and retain the final receipt.
Premises tax is assessed as of July 1; Article 83’s ordinary filing and payment period is August 1–31.
For this rule year those dates are 2026-07-01 and 2026-08-01–08-31.
Under Article 84-6, the payroll base due date is the 10th of the month after payment, so December payroll crosses into the next year.
Displayed dates do not adjust for Saturdays, public holidays or disaster-related extensions; check the actual deadline in official notices and the filing system.
Practical uses and interpretation limits
Expansion and payroll growth
When expanding a shop, check additional allocated common space as well as new exclusive floor area.
When payroll grows, test the trailing average before calculating the current month’s tax.
Bonus-heavy businesses may have a large difference between historical average and current pay, so do not assume a constant monthly tax amount.
A zero result does not establish that no filing or document submission is required.
Ask the municipal department about relief applications and assessment-record updates.
Non-filing, underreporting and late-payment penalties are outside this calculator; if the deadline has passed, review those separately from principal tax.
Do not pay an unconfirmed scenario amount or disregard an existing official payment notice based on this estimate.
“Review required” means the necessary basis is missing, not that the amount is zero.
Leave unknown capital or incomplete payroll information blank instead of inventing zero amounts.
Resetting the example also clears confirmations so checks made for one location are not carried into a new example.
Frequently asked questions
Does 330 m² also eliminate basic tax?
No.
The area exemption and basic-taxpayer test are separate.
An ordinary qualifying sole proprietor can still owe basic tax and education tax even with no area component.
At 331 m², is only the extra square metre taxed?
No.
At the ordinary rate of KRW 250, the full 331 m² gives KRW 82,750 in area tax.
Verify legal exclusions before subtracting excluded floor space.
Does a large area override the individual KRW 80 million turnover test?
The ordinary sole-proprietor taxpayer test first uses prior-year VAT taxable turnover or exempt-business receipts of at least KRW 80 million.
Corporate rules differ, and excluded industries and special treatment require separate review.
Are businesses with fewer than fifty employees automatically exempt?
No.
The ordinary threshold uses average taxable payroll of KRW 180 million, rather than worker count alone.
The SME employment-support deduction has separate headcount conditions.
Does current payroll above KRW 180 million immediately trigger tax?
Not by itself.
First test the eligible-period average including the payment month.
If that exceeds the threshold, apply the rate to the entire current taxable payroll.
Should a five-month-old business divide by twelve?
Use eligible operating months.
Exclude both pay and month count for opening, suspension or closure months with fewer than 15 operating days; do not lower the average with pre-opening zero months.
Is education tax added to payroll tax?
No.
Within this resident-tax calculation, education tax applies only to the premises basic component.
It does not apply to area tax or payroll tax; confirm the local education rate.
Do checked confirmations submit a return?
No.
They document calculation assumptions only.
Actual filing, payment and receipt verification at Wetax or the municipality remain separate, and penalties or special deductions are not automatically processed.
Official sources, update dates and your next step
Current-law status and effective dates were checked directly through the National Law Information OPEN API on 2026-09-27.
Local Tax Act MST282559 has a representative effective date of 2026-07-01; the relevant resident-tax article text is dated 2026-01-01.
The reviewed Decree MST288831 is effective 2026-09-18 and Local Accounting Act MST276363 is effective 2026-01-02.
For a new year, recheck the law, municipal ordinance, effective timing of payroll exclusions and filing notices.
Save the inputs and results, then compare building records, payroll records and municipal rates.
Once review items are resolved, use Wetax to check actual filing details and payment options.