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Why a Take-Home Calculator Never Matches Your Payslip

Since building a take-home pay calculator, the message we get most often is some version of this: "Your calculator says 3.55 million, but my payslip says 3.62 million." The first few times we assumed the arithmetic was wrong and checked it again. It wasn't. Both numbers are correct — they're answering different questions.

Social insurance is identical either way

Let's narrow the problem down. Deductions from your salary split into social insurance and tax, and the insurance side leaves no room for disagreement: the rates are set in law and applied the same way every month.

There's a trap here. The pension contribution is capped: from July 2026 to June 2027 it applies only up to a monthly income of 6.59 million won. Whether you earn 7 million or 20 million a month, the pension deduction stops at 313,025 won. That's part of why the take-home ratio looks slightly better at higher salaries.

Long-term care is worth a second look too. The published rate is 0.9448% of income, but in practice it's calculated as 13.14% of your health premium. Those are the same thing expressed differently (0.9448 ÷ 7.19 = 0.1314). The catch is that if either the health rate or the care rate changes, that 13.14% has to be recomputed. In 2025 it was 12.95%. Build a calculator from an old blog post and this is where it goes wrong.

Income tax is the only thing that differs

If insurance matches, what's left is income tax and local income tax — and these are computed in completely different ways monthly versus at year end.

What your employer withholds each month comes straight from the tax office's simplified withholding table. That table looks at exactly two things: your monthly pay and your number of dependants. Find the cell, deduct that number, done.

Year-end settlement, by contrast, follows the full statutory procedure. Subtract the earned income deduction from gross pay, subtract personal allowances for yourself and your dependants, apply the progressive rates from 6% to 45% to what's left, then subtract the earned income tax credit. Credit card spending, medical bills, insurance premiums, pension savings and housing costs all enter here.

Why make it this complicated?

A fair question: if it all gets recalculated in the end, why not just withhold the right amount each month?

Because it can't be known. In March, your employer has no way of knowing what you'll spend on medical care that year, how much you'll put into a pension, whether you'll change jobs in December, or whether your family will grow. A person's annual spending isn't final until the year is.

So the system splits it in two: collect roughly the right amount monthly, settle up at year end. The withholding table exists to serve that "roughly", and it prioritises simplicity over precision — it's designed so a payroll clerk only has to find one cell in a grid.

So which number should you use?

Our calculator uses the year-end basis. We think "if I take this salary, how much is genuinely mine after a year?" is the more useful question when you're weighing an offer or negotiating. The cost is that it won't match your monthly payslip, which is why the tool page says so plainly.

Switching to the withholding-table basis would require the entire table: thousands of combinations of pay bracket and dependant count, with no single formula to replace them. We haven't added it.

Who gets a refund, and who pays more

Once you see the structure, the February result stops being a surprise. The withholding table doesn't know your deductions, so it assumes an average person. If you have more to deduct than average, you overpaid monthly and get it back; if you have less, you underpaid and settle up.

A large refund isn't a win. It means you lent the government money at zero interest for a year. An extra payment isn't a loss either — it's what you didn't pay earlier. Either way your annual tax is the same number, and that's the number this calculator shows.