The banking system in South Korea is as advanced as in most Western countries and also relatively simple and user-friendly.
That said, language barriers may make it harder for expats to set up their accounts or get their internet banking up and running. There are some banks, such as KEB Hanna, that are more expat-friendly than others, but it's best to ask a friend or employer to assist with setting up one's banking needs in South Korea.
Currency in South Korea
The official currency of South Korea is the won, which is abbreviated to KRW or ₩. Foreign currency can be exchanged at banks, airports, and some hotels or tourist spots, and most major international currencies are accepted. Expats will have a more difficult time exchanging won for other currencies outside of South Korea.
Notes: 1,000 KRW, 5,000 KRW, 10, 000 KRW and 50,000 KRW
Coins: 10 KRW, 50 KRW, 100 KRW and 500 KRW
Banking in South Korea
Some popular banks in South Korea include KEB Hanna, Woori Bank, Kookmin Bank (KB) and Shinhan Bank. International banks such as Citibank, HSBC, Standard Chartered Bank and Bank of America also operate in the country.
Banking hours in South Korea are generally from 9am to 4pm during the week. A few bank branches will also open on weekends.
Opening a bank account
To open a bank account in South Korea, expats will need a copy of their working visa, Residence Card, passport, and in some cases, certificate of employment. Although the Residence Card has the cardholder's address printed on it, it's also helpful for applicants to bring in a copy of their address written in both Korean and English for the bank to capture it properly.
Once the necessary forms have been filled in, the bank will issue the applicant a bank card. It's important to note that this is an ATM card, not a debit card. Should an expat require debit card facilities, or a card that works overseas, they will need to ask the bank for one specifically.
Internet banking also isn't necessarily included. New arrivals should also ensure their bank creates a digital certificate for them, which allows them to complete online transfers. Expats should have banking staff set up all of their banking needs when their account is first created.
Credit cards and ATMs
ATMs are plentiful in cities and are primarily found in convenience stores, hotels, banks, post offices or train stations. Although some are available 24/7 and accept foreign cards, many are only online during the day between 8am or 9am and midnight and only accept Korean bank cards.
Although Koreans themselves usually pay with debit or credit cards, international credit cards may only be readily accepted in larger hotels and stores – smaller stores and restaurants may have trouble processing a foreign credit card. ATMs affiliated with the leading Korean banks often accept foreign cards.
Taxes in South Korea
Expats who will be living in South Korea for 183 days or more in a tax year will be considered tax residents. South Korean income tax is calculated based on a progressive scale and ranges from six to 45 percent. Those in the top income bracket, earning an excess of one billion KRW, will be taxed 45 percent of their salary. In addition to income tax, individuals are also charged a residents' tax, which amounts to around 10 percent of the income tax amount. Therefore, this means that high-earning individuals will be taxed 49.5 percent of their income in total.
Some expats receive a partial or complete exemption from paying tax for a specified number of years of their stay in South Korea. These include English teachers working in state schools and qualified foreign engineers. As of 2023, expats working in South Korea can apply for a flat tax rate for up to 20 years, which has been increased from an initial five years.
Foreigners are also expected to pay a percentage of their salary into the National Pension Scheme. By law, employers must match this contribution. Some expats, depending on their nationality, can claim some of their taxes back at the end of each tax year, and they can claim all of their pension payments back at the end of their stay in South Korea.
Some expats can also opt to pay taxes either in their home country or in South Korea. This depends on their resident status and whether their country has a double taxation avoidance agreement with the South Korean government.
For the most up-to-date information about the issue, it is best to refer to a tax professional.