"It felt like a waste to have 3.3% deducted..." Withholding tax for multi-jobbers and freelancers lowered to 2.2% for the first time in 28 years

[Financial News] The government is lowering the withholding tax rate for freelancers and special employment workers, including delivery riders, courier drivers, caddies, and broadcast writers, from 3.3% (including local income tax) to 2.2% for the first time in 28 years.

The National Tax Service (NTS) announced on the 1st that it held an on-site communication meeting with organizations of individuals earning income from personal services at the National Assembly Members' Office Building in Yeouido, Seoul, and discussed tax support measures, including a reduction in withholding tax rates. This marks the first time the NTS and the National Assembly have held a joint meeting with individuals earning income from personal services.
The National Delivery Riders Association, the Korea Designated Driver Association, the Platform Delivery Workers Union, and organizations related to caddies and broadcast writers attended the event.
Currently, approximately 4 million individuals earning income from personal services, including delivery riders, courier drivers, designated drivers, caddies, and broadcast writers, pay 3.3% in advance—a combination of 3% income tax and local income tax—when they receive their income. This rate has been maintained for 28 years since it was raised from 1% in 1998 to prevent tax evasion by high-income freelancers.
In the tax reform plan announced last July, the government decided to lower the income tax withholding rate from 3% to 2%. Including local income tax, the actual withholding rate drops from 3.3% to 2.2%. If the relevant bill passes the National Assembly, it is scheduled to take effect next year.
The NTS cited the example of a single-person household with personal service income of 3.8 million won per month and approximately 45 million won per year, explaining, "Under the current 3.3% tax rate, the annual withholding tax is 1.35 million won, but if it is lowered to 2.2%, it decreases by 450,000 won to 900,000 won," and added, "Local income tax also decreases from 135,000 won to 90,000 won."
Currently, there are cases where about 440,000 won must be returned after filing for comprehensive income tax in May of the following year, but the explanation is that if the amendment is applied, the tax withheld in the first place will be reduced, so a separate refund claim may not be necessary.
The notification of refunds is also being expanded. Since the 1st of last month, the NTS has been notifying 820,000 individuals—including those with personal service income and those with labor, pension, or other income—of refunds totaling 163.5 billion won who did not file their comprehensive income tax returns for the years 2021–2025.
It provides a pre-filled tax return form with everything from income to refund amounts calculated, and enables taxpayers to apply for refunds via Hometax, Sontax, or the Automated Response System (ARS) without separate filing fees.

The eligibility requirements for the Earned Income Tax Credit and Child Tax Credit will also be revised. Currently, service providers who receive payment directly from consumers, such as designated drivers, caddies, and caregivers, must complete business registration by December 31 of the previous year to receive the credit.
The NTS proposed to the Ministry of Finance and Economy an amendment to the Enforcement Decree of the Restriction of Special Taxation Act to delay this by approximately eight months until the 'date of incentive decision.' The goal is to provide guidance on the system improvements starting in the first half of next year.
The income data of service providers collected monthly by the NTS is also utilized for welfare administration.
Since 2021, the NTS has provided relevant income data to EAP and others, supporting the additional enrollment of 79,000 people in employment insurance so far.
The submission of a certificate of termination of employment, which was required of freelancers during the health insurance premium adjustment process, has also been waived since September of last year.
Going forward, income data will also be used to adjust National Pension Service (NPS) insurance premiums.
Starting this November, a related computer system will be developed, and starting next January, efforts will be made to allow the work experience of freelancers to be reflected in the Ministry of Employment and Labor's Certificate of Recognition of Job Competency.
[email protected] An Gaeul Reporter