E-2 Teacher Visa Tax Guide 2026

If you're on an E-2 (Foreign Language Instructor) visa teaching at a Korean hagwon or school, your Korean tax is mostly handled by your employer through monthly withholding + year-end settlement. But there are catches that cost teachers KRW 200K-1M+ if missed.

1. E-2 Tax Residency

If you stay in Korea ≥ 183 days/year, you're a Korean tax resident. Most E-2 teachers on 1-year+ contracts cross this threshold.

Tax resident = Korea taxes your worldwide income (Korean job + foreign rental + US dividends + remote teaching to non-Korean students). But your home country tax often offsets.

2. How Your Employer Handles It (Withholding)

Each month, your employer deducts from your paycheck:

So for KRW 2,500,000/month gross salary, take-home is ~KRW 2,150,000.

3. Year-End Settlement (연말정산)

In January-February, your employer reconciles your year's withholding vs actual tax owed:

• If withheld too much → refund deposit to your account in March
• If withheld too little → deducted from February/March paycheck

Documents your employer needs (give in January)

• Alien Registration Card (외국인등록증) — they already have
• Receipts: medical (over 3% of income), education (Korean classes count!), donations, rent (월세 세액공제)
• Credit card / debit card statements (도서·전통시장 등 분류별 공제)
• National pension contributions (employer auto-includes)

4. Side Income (Private Lessons, Online Teaching)

This is where most E-2 teachers leave money on the table or get in trouble.

Side income from private lessons or online teaching = SEPARATE filing in May (종합소득세). Your employer's year-end settlement doesn't cover this.

If you have side income:

1. Track all income (cash, bank deposits, PayPal)
2. Track expenses (textbooks, internet, laptop) — deductible
3. File 종합소득세 May 1-31 via Hometax (hometax.go.kr) or tax accountant
4. Pay any additional tax owed

5. US Citizens — 1040 + FEIE

US E-2 teachers must also file US 1040 annually (US worldwide tax):

• FEIE (Foreign Earned Income Exclusion): ~$126,500 (2026) salary excluded from US tax
• Form 2555 + 1040
• If you exceed FEIE → claim Korean tax as foreign tax credit (Form 1116)
• FBAR (FinCEN 114) required if Korean bank balance > $10K anytime

Result: most E-2 teachers owe \$0 US tax due to FEIE, but still must file.

6. Canadian Citizens

Canada taxes you only if you're a Canadian tax resident. Most E-2 teachers in Korea long-term break Canadian residency = no Canadian tax. Confirm with CRA NR73 form before leaving Canada.

7. UK Citizens

UK taxes only UK residents. If you're in Korea full-time on E-2, you're non-UK-resident = UK tax only on UK income (rental, dividends from UK shares).

8. Australians / New Zealanders

Both tax worldwide on residents. Most E-2 teachers staying 1+ year become non-resident = only home-source income taxed. Confirm with ATO / IRD.

9. National Pension Refund When You Leave

10. Common E-2 Tax Mistakes

• ❌ Not declaring private lesson income (immigration + tax audit risk)
• ❌ Forgetting US FBAR (penalty $10K-100K!)
• ❌ Not saving rent receipts (월세 세액공제 missing)
• ❌ Leaving Korea without claiming NPS refund
• ❌ Year-end settlement done in January but not checking refund deposit in March

11. E-2 Tax Calendar

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