📌 Withholding Tax Rates for Interest Income
• General interest income (interest from bank deposits, installment savings, and bonds; gains from savings-type insurance; etc.): income tax 14% + local income tax 1.4% = effective rate 15.4%
• Non-business loan interest (interest received from personal loans): income tax 25% + local income tax 2.5% = effective rate 27.5%
💡 The 20 Million Won Threshold (Comprehensive Taxation of Financial Income)
• If your total annual financial income from interest and dividends is 20 million won or less, your tax obligation ends with withholding (separate taxation)
• If it exceeds 20 million won, you must combine the amount over 20 million won with your other comprehensive income and file a comprehensive income tax return at progressive rates
🏦 Tax-Exempt and Low-Tax Accounts Such as ISAs
• For an Individual Savings Account (ISA), up to 2 million won of interest and dividend income earned by maturity is tax-exempt for the standard type (4 million won for the low-income and farmer/fisher types), and the amount over that is separately taxed at 9.9% (including local income tax)
• Interest income tax may also be waived or charged at a lower rate for tax-exempt comprehensive savings (if requirements such as being age 65 or older are met), tax-exempt gains from long-term savings-type insurance (held for at least 10 years, etc.), and similar products if their separate requirements are met
• This calculator is based on regular taxable accounts. Tax-exempt accounts and accounts with tax benefits must be checked separately
⚠️ Cautions
• This calculator is for reference only. The actual tax withheld may differ depending on the paying institution's calculation method (such as dropping amounts below 1 won)
• Sources: Income Tax Act Article 129, Restriction of Special Taxation Act (ISAs, etc.)
🏦 Interest Income Tax Calculator
Applies the withholding tax rates (15.4% for general interest income and 27.5% for non-business loan interest income) to annual interest income to calculate the withholding tax and the amount received after tax. It also tells you whether your financial income is subject to comprehensive taxation if it exceeds 20 million won.
| Item | Withholding Tax Rate | Interest Income | Tax Withheld |
|---|---|---|---|
| General interest income | 15.4% | — | — |
| Non-business loan interest income | 27.5% | — | — |
| Total | — | — | |
Total withholding tax: —
⚠️ If your total annual financial income (interest + dividends) exceeds 20 million won, your tax obligation does not end with withholding. It becomes subject to comprehensive taxation of financial income and must be combined with your other income subject to comprehensive taxation when you file your tax return. Check the Exact Amount with the Comprehensive Financial Income Tax Calculator →
Interest Income Tax Calculation Guide
What Is Interest Income Tax?
Interest income tax is charged on interest from bank deposits, installment savings, and bonds; gains from savings-type insurance; interest received from personal loans (non-business loan interest); and similar income. It is taxed through withholding, which means the bank or other institution paying the interest deducts the tax before making the payment. The tax rate is 15.4%(income tax 14%+local income tax 1.4%) for general interest income and 27.5%(income tax 25%+local income tax 2.5%) for non-business loan interest.
Why the Tax Rate Is Higher for Non-Business Loan Interest
Non-business loan interest means interest received when a person who is not in the finance business temporarily lends money to someone else. Because these person-to-person transactions do not go through a formal financial institution, the income is considered difficult to track and the incentive for tax avoidance is considered high. Therefore, a withholding tax rate of 27.5% applies, which is much higher than the rate for general interest income (15.4%).
The 20 Million Won Financial Income Threshold and Comprehensive Taxation
If your combined interest and dividend income is 20 million won or less per year, separate taxation applies, and your tax obligation ends with withholding (15.4%, etc.). However, if it exceeds 20 million won, you must combine the amount over 20 million won with other comprehensive income, such as employment income and business income, and file a comprehensive income tax return at progressive rates of 6–45%. This is called comprehensive taxation of financial income. You can check the exact tax amount using the comprehensive financial income tax calculator.