How Much Will Your Taxes Change If Financial Income Exceeds 2 Thousand Won? 2026 Guide
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This article is based on the latest available reports and official sources verified as of 2026-07-19 Korea Standard Time.
As of 2026-07-19, if an individual's annual taxable financial income, including bank deposit interest and stock dividends, exceeds 2 thousand won, they may be required to file a comprehensive income tax return in May of the following year.
However, slightly exceeding 2 thousand won does not mean that the highest tax rate of 45% immediately applies to all financial income. The final tax liability is calculated by considering other income, deductions, taxes already withheld at source, and the comparative taxation method.
The first thing to check is not the amount of financial income itself, but whether that income counts toward the '2 thousand won threshold.'
2 Thousand Won Refers to Interest and Dividends, Not Your Deposit Principal
The threshold for comprehensive taxation of financial income is not based on the principal held in bank accounts or investment accounts.
It is determined by adding together taxable interest income and dividend income received during the year.
For example, even if the principal of your deposits is KRW 300,000,000, if annual interest is 1 thousand won and dividend income is KRW 5,000,000, your total financial income is KRW 5,001,000.
Conversely, if the combined interest and dividends received from multiple banks and securities firms exceed 2 thousand won annually, you need to check whether comprehensive taxation applies.
This threshold applies individually, not to a married couple's combined income. Interest and dividends received by your spouse are not added to your own financial income.
Not All Investment Returns Belong in the Same Category
When calculating the 2 thousand won financial income threshold, the following items generally need to be reviewed.
Interest received from bank deposits and installment savings accounts
Interest and discount income arising from bonds
Dividends received from domestic and overseas stocks
Fund distributions and profits classified as dividend income
Interest income under tax law, including profits from nonbusiness loans
Capital gains from selling stocks are taxed differently from interest and dividends, so they are not simply added to the 2 thousand won financial income threshold.
ISAs, pension accounts, tax-exempt savings products, and products subject to separate taxation may also follow different calculation rules from ordinary financial income.
Rather than deciding whether income is included based solely on a financial product's name, it is safer to check the income classification shown on your financial institution's annual financial income statement or in Hometax records.
If Financial Income Is KRW 1,002,000, Is All of It Taxed at 45%?
No.
The statement that the highest comprehensive income tax rate is 45% means that this rate applies to the highest taxable income bracket. It does not mean that everyone whose financial income exceeds 2 thousand won is taxed at 45%.
The situations can be summarized as follows.
| Situation | What to Check |
|---|---|
| Financial income of KRW 9,001,000 | Check whether taxation is generally completed through withholding by financial institutions |
| Financial income of KRW 1,002,000 | Check whether a comprehensive income tax return must be filed in May of the following year after combining it with other comprehensive income |
| Financial income of KRW 1,002,000, with no employment or business income | Calculate the actual tax liability after accounting for deductions and comparative taxation |
| Financial income of KRW 1,002,000, with substantial employment or business income | Additional taxes may increase because the combined taxable income becomes higher |
When financial income exceeds the threshold, the entire amount is included in the comprehensive taxation calculation. However, a comparative taxation method applies that takes into account the existing withholding tax level for the portion up to 2 thousand won.
Therefore, simply multiplying the amount exceeding 2 thousand won by a tax rate, or applying the highest tax rate to all financial income, will not produce an accurate calculation.
In 2026, Dividends From High-Dividend Companies Need Separate Attention
Starting in 2026, a separate taxation system was introduced for dividend income from high-dividend companies meeting certain requirements.
Dividend income received from high-dividend companies on or after 2026-01-01 may qualify for separate tax rates ranging from 14% to 30%, without being combined with other income, if the application requirements are met. Local income tax is separate.
Dividend income for which high-dividend separate taxation is selected is excluded when determining whether financial income exceeds the comprehensive taxation threshold of 2 thousand won.
For example, suppose ordinary bank interest and dividends total KRW 8,001,000, while dividends received separately from high-dividend companies amount to KRW 5,000,000. The simple combined total would be KRW 3,002,000.
However, if the KRW 5,000,000 qualifies for high-dividend separate taxation and an application can be made, ordinary financial income may be calculated as KRW 8,001,000.
Not every dividend-paying stock qualifies for high-dividend separate taxation, and the benefit is not applied automatically.
You must check whether the company is designated as a high-dividend company in Korea Exchange disclosures and submit an application for separate taxation when filing your comprehensive income tax return in May 2027.
The current system is scheduled to apply temporarily to dividends received from 2026 through dividends received in 2029.
Health Insurance Premium Rules Must Be Considered Separately From Taxes
An increase in financial income may affect not only comprehensive income tax but also eligibility as a dependent under the national health insurance system or premiums for self-employed and other locally insured subscribers.
However, exceeding 2 thousand won in financial income does not automatically cause health insurance premiums to increase uniformly starting that same month.
Dependent eligibility is determined not only by financial income but also by other income, including pensions, employment income, and business income, as well as property-related criteria. For locally insured subscribers, the outcome also varies depending on when income information transferred from the National Tax Service is reflected and the subscriber's circumstances.
Do not assume that health insurance premiums will follow the same calculation as your taxes. You should separately check the National Health Insurance Service's eligibility criteria and premium simulation tools.
What to Check Now, Step by Step
If your financial income is approaching 2 thousand won this year, you can review it in the following order.
1. Check the cumulative interest and dividends received this year from each bank and securities firm.
2. Add together the amounts received from multiple financial institutions for each individual.
3. Separate income from ISAs, pension accounts, tax-exempt products, and products subject to separate taxation.
4. If you have dividends from high-dividend companies, check whether the companies are covered by the relevant disclosures.
5. Add the interest and dividends you expect to receive by year-end to calculate your projected financial income.
6. If you expect to exceed the threshold, separately check comprehensive income tax filing requirements in May of the following year and the potential impact on health insurance.
The 2 thousand won financial income threshold is not simply a dividing line at which taxes suddenly skyrocket. Rather, it is a threshold that requires you to reassess your filing obligations and applicable tax rates.
The outcome may vary depending on your employment income, business income, deductions, and types of financial products. Before filing your actual tax return, it is advisable to review the calculation results in Hometax or consult a tax professional.
※ This article is provided for reference to help readers understand market trends and does not constitute an investment recommendation for any particular stock or asset. All final investment decisions and responsibilities rest with the individual.
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