IRP in South Korea 2026: what a contribution really costs
Paying into a private or workplace pension in South Korea usually lowers your tax and sometimes your social-security contributions, so each unit you put in costs you less than it adds to the plan. The calculator above works this out for your salary. Below you will find this year’s effect on your pay, the tax rules and how the plan compares with saving the money yourself.
This year: salary without and with the plan
| Without plan | With plan | |
|---|---|---|
| Gross / year (incl. bonus) | ₩48,000,000 | ₩48,000,000 |
| Social security | −₩4,664,344 | −₩4,664,344 |
| Your contribution | – | −₩2,400,000 |
| Income tax | −₩2,786,133 | −₩2,390,133 |
| Take-home / year | ₩40,549,523 | ₩38,545,523 |
| Employer contribution | – | +₩0 |
| Into the plan (you + employer) | – | ₩2,400,000 |
| Total received / year (take-home + plan) | ₩40,549,523 | ₩40,945,523 |
In the example, your net pay is ₩3,212,127 a month with the plan: ₩167,000 less than without it (₩3,379,127) · tax & contributions saved cover 16.5%. You save ₩396,000 a year (tax + social security), so each unit you pay in costs you ₩1. The balance could reach ₩72,896,736 (you ₩48,000,000 · employer ₩0 · return ₩24,896,736); at payout that is about ₩68,887,416 net (after 5.5% tax & charges).
Tax treatment
Individual retirement pension (IRP) and pension savings: a tax credit instead of a deduction, and 3.3–5.5% tax on pensions drawn from 55 (5.5% used here). Interest income is taxed at 15.4%. Pension savings accounts and IRP contributions give a tax credit of 15% (12% if your total salary is above 55 million won), plus 10% local tax, on up to 9 million won a year (6 million in pension savings). Pensions drawn from 55 are taxed at 3.3–5.5%.
The plan or saving it yourself?
- Total that left your take-home pay: ₩40,080,000
- Plan balance: ₩72,896,736
- Plan, net to you: ₩68,887,416
- Saving yourself, net: ₩56,949,315
- Advantage of the plan: +₩11,938,101
Frequently asked questions
Is it worth paying into IRP in South Korea?
In the example, the plan leaves you +₩11,938,101 better off than saving the same money yourself, mainly because of the tax relief and any employer contribution. Returns are not guaranteed.
How much tax do I save?
In the example, ₩396,000 this year (tax + social security). Each unit you pay in costs you ₩1 out of your take-home pay.
What happens at payout?
In the example you would receive about ₩68,887,416 (after 5.5% tax & charges). Payout rules and taxes are listed in the tax section above.
Which return does the calculator assume?
The return is your own assumption in the calculator, not a forecast. Investments can lose value; try more than one value.
Rules and official sources: see “Rules applied (2026)” above. Last checked: October 2026. The amounts are estimates for information, not financial or legal advice.