Chicago, IL vs Seoul

Moving from Chicago to Seoul

Same salary, two tax systems. Single filer, employment income.

How to read this: we take the salary above ($85,087), convert it at the ECB rate, and tax it as a single filer's employment income in each place. That favors simplicity over realism — household vs. individual income and family tax treatment differ by country — so treat the gap as directional, not precise.

Korea's national progressive tax (6/15/24/35/38/40/42/45% on taxable income, at KRW14m/50m/88m/150m/300m/500m/1,000m per the National Tax Service and confirmed via PwC Tax Summaries) is combined with the flat 10% local income tax surtax (Article 89-1 of the Local Tax Act -- the local tax is legally 10% of the FINAL national tax liability after credits, not 10% of taxable income, so it is applied here after all national-level credits). Because Korea's employment income deduction (근로소득공제, a NTS-published schedule: 70% of salary to KRW5m, then KRW3.5m+40% to KRW15m, KRW7.5m+15% to KRW45m, KRW12m+5% to KRW100m, KRW14.75m+2% above -- unchanged for 2026 per multiple current Korean payroll/tax sources) and the basic personal deduction (KRW1.5m, self only, no dependents) are both large relative to typical salaries, this table folds them into effective GROSS-income brackets the same way this dataset's Japan record does, rather than leaving them as an unmodeled disclosure. Two further mechanisms are essential to get within a defensible error band and are also folded in: (1) the employee's own mandatory National Pension, National Health Insurance, long-term-care, and Employment Insurance premiums are deductible from taxable income under Korean law (연금보험료공제 and 특별소득공제) -- modeled using this record's own socialContributionRate components below, so the income-tax bracket construction and the separate socialContributionRate figure are mutually consistent, not double-counted (paying the premium reduces net pay via socialContributionRate; the SAME premium also legally shrinks the income-tax base, which is what the brackets above reflect); (2) the 근로소득세액공제 (Earned Income Tax Credit, Article 59 Income Tax Act, confirmed via law.go.kr): a credit of 55% of calculated tax up to KRW1.3m, then KRW715,000 + 30% of the excess, capped by total salary at KRW740,000 (salary <= KRW33m), phasing down to a KRW660,000 floor by KRW43m (flat through KRW70m), then phasing down again to a KRW500,000 floor by roughly KRW70.3m (flat through KRW120m), then a flat KRW200,000 above KRW120m -- this produces the genuine, documented spikes in the effective marginal rate visible around KRW30-45m and KRW70-90m gross in the table above (analogous to the Netherlands' arbeidskorting phase-out zone in this dataset), not modeling artifacts. Also folded in: the near-universal KRW200,000/month tax-free meal allowance (식대) that almost every Korean employment contract carries as a matter of standard payroll practice -- Korean 4-major-insurance and net-pay calculators default to excluding it from taxable/insurable salary, and this table does the same (treating KRW2.4m/year of any stated gross salary as non-taxable) for consistency with how real Korean payroll actually runs; a role that genuinely pays no meal allowance would owe slightly more than this table implies. NOT modeled: the KRW130,000 flat 표준세액공제 (standard credit, available to filers who do not itemize insurance/medical/education/donation credits) and child/dependent credits, since this record assumes a single filer with no dependents. METHODOLOGY NOTE (corrected after review): the employee National Pension, NHI, long-term-care, and Employment Insurance deduction used when building the taxable base is applied here as the SAME flat, uncapped 9.72% used for socialContributionRate below, rather than modeling National Pension's real monthly income cap (~KRW76-79m/year) separately within the bracket construction -- this keeps the income-tax table and the flat social-contribution figure internally consistent (the tool effectively treats a worker as paying, and getting a tax deduction for, a flat 9.72% of gross indefinitely), at the cost of slightly understating taxable income (and so slightly understating tax) in the roughly KRW80-150m range where National Pension's real contribution actually plateaus. An earlier version of this table modeled National Pension's cap explicitly within the bracket construction while using an uncapped flat socialContributionRate, which produced a KRW75-100m bracket of 23.51% -- 1.00 percentage point too high versus the internally-consistent flat-rate derivation of 22.51% ((0.95 EID-retained fraction - 0.0972 social deduction) x 0.24 national-bracket rate x 1.10 local surtax); that error, and its downstream effect on every higher bracket, is corrected here. SPOT-CHECK: applying the published brackets above to gross salary gives KRW4,098,000 combined national+local income tax at KRW60,000,000 gross and KRW12,017,500 at KRW100,000,000 gross. Independently re-derived annual reference figures for the same two incomes are KRW4,098,270 and KRW12,056,000 -- gaps of -0.007% (effectively exact) and -0.32%, both comfortably inside the +/-3% target. (A Korean 2026 net-pay reference table, job.cosmosfarm.com, which also assumes the standard KRW200,000/month meal allowance but likely prices tax via the NTS's monthly simplified withholding table (간이세액표) rather than the exact annual Article 47/59 formula, separately implies KRW3,987,960 and KRW12,716,160 for the same two incomes -- gaps of +2.8% and -5.5% against this table, illustrating the size of that calculator's own withholding-table approximation rather than an error in this record.) The top bracket's 43.48% rate is drawn from the model's own KRW1-3bn segment under the same flat-uncapped-social-deduction methodology; the true asymptotic marginal (were National Pension, NHI, and LTC all left fully uncapped at the true tax-law rates rather than this record's flat approximation) converges toward roughly 42%, reached only at income levels far outside this tool's intended use.

Single filer, employment income — figures are estimates, not advice. US FICA is applied as a flat 7.65% with no Social Security wage-base cap, which overstates FICA above roughly $176k. See methodology.

Moving from Seoul to Chicago

Flip it around: a Seoul earner relocating to Chicago on the same $85,087 salary would keep $64,477 after US federal, FICA and state/local tax — but health cover in the US runs $6,800/year against ₩171,600/year in Seoul, so employer-sponsored coverage becomes essential rather than optional.

The basics, priced side by side

US tax basics for an expat

Under the Foreign Earned Income Exclusion, the first $85,087 of foreign earnings is excludable from US federal tax; at this salary, estimated residual US federal tax is $0 — this ignores tax treaties and the stacking rule, and is an estimate, not advice.

IRS: Foreign Earned Income Exclusion →

Living in Seoul: what to expect