The most reliable refund tool in year-end tax settlement is the pension account. In practice, only two numbers are needed for the calculation — how much is recognized as eligible for the credit (the limit) and what percentage of that amount is returned (the credit rate). Based on Toss Bank's guidance, filling both pension savings and IRP up to 9 million won returns up to 1,485,000 won in tax. This article breaks down the structure behind those numbers using publicly available data from the National Tax Service and financial institutions.
Limit Structure — 6 Million Won for Pension Savings, 9 Million Won Combined with IRP
Tax credit limits are designed differently by account type. According to KB Think's summary, pension savings alone qualify for up to 6 million won per year, IRP alone qualifies for up to 9 million won, and even when both accounts are used together, the combined ceiling is 9 million won. The most common combination in practice — pension savings 6 million won plus IRP 300,000 won — exists for exactly this reason. Depositing 9 million won into IRP alone with no pension savings account yields the same credit limit.
What is easily confused is the contribution limit. You can contribute up to 18 million won per year combined across both accounts, but the tax credit applies to only up to 9 million won of that. Amounts beyond the limit are not eligible for credit that year, so if refunds are the goal, setting a contribution plan at the 9 million won mark keeps the calculation simple. Converting to monthly figures: 6 million won for pension savings equals 500,000 won per month; to reach 9 million won, it is 750,000 won per month. A lump-sum deposit at year-end produces the same credit — the basis is the total amount contributed by December 31.
| Category | Tax Credit Limit (million won) | Enrollment Eligibility | Mid-term Withdrawal |
|---|---|---|---|
| Pension savings | 6 | Unrestricted | Free (taxed on credited portion at withdrawal) |
| IRP | 9 (combined with pension savings) | Persons with income | Restricted to statutory reasons |
| Combined (both accounts) | 9 | — | — |
Credit Rates of 16.5% and 13.2% — The Boundary That Splits Refund Amounts
The credit rate is determined by income bracket. For total salary of 55 million won or less, the rate including local income tax is 16.5%; above that, it is 13.2%. Based on the National Tax Service's guidance on pension account tax credits, the underlying rates are 15% and 12% respectively, with a 10% local income tax added to each, producing the figures above.
The calculation is a single multiplication. A wage earner with total salary of 55 million won or less who fills 9 million won receives 9 million won × 16.5% = 1,485,000 won; one above that threshold receives 1,188,000 won. If only pension savings of 6 million won is deposited, the refunds are 990,000 won and 792,000 won respectively. One income boundary creates a difference of nearly 300,000 won per year in refunds for the same contribution.
The refund is not a separate application process — it is deducted from the calculated tax liability at year-end settlement or in the comprehensive income tax filing. Put another way, someone whose tax liability for the year is less than the credit amount will not receive the full 1,485,000 won as cash — in years when the determined tax amount is small, filling the limit may not produce the full refund, and this should be factored into the calculation.
The National Tax Service guidance also includes a path to a higher limit. If ISA (Individual Savings Account) maturity funds are transferred to a pension account, 10% of the transferred amount is eligible for an additional tax credit up to 300,000 won. However, this is a one-time expansion applied only in the year when the maturity balance is deposited into a pension account.
Why You Should Fill Pension Savings First — Two Constraints of IRP
If the combined limit is the same, the next question is which account to fill first. Based on KB Think's comparison, pension savings has no eligibility restriction and withdrawals are free. IRP, on the other hand, is only available to persons with income, and mid-term withdrawals are permitted only for statutory reasons such as home purchase, jeonse (lump-sum deposit lease) deposit burden, or long-term medical care. In terms of management, IRP also requires at least 30% to be held in principal-guaranteed or safe assets, limiting risky assets such as equity funds to 70% of contributions, while pension savings funds carry no such allocation restriction — allowing 100% equity fund investment — and no derivative risk ratio regulation, meaning even commodity futures ETFs can be held. If you value liquidity and investment flexibility, filling pension savings 6 million won first and then adding 3 million won to IRP imposes fewer constraints.
Eligibility thresholds also diverge. Pension savings can be opened by a spouse without income or a student, but IRP requires income — as a wage earner, self-employed person, public official, or freelancer. When designing a strategy to spread the limit across a couple, the non-income-earning spouse's portion is only possible through pension savings.
A pension account tax credit is not an exemption — it is a deferral. The taxes returned this year will be settled as pension income tax after age 55.
Breaking this promise mid-way is costly. If the account is closed early, miscellaneous income tax of 16.5% is levied on both the credited contributions and all investment gains, returning most of the benefits accumulated. On the other hand, receiving benefits as a pension starting at age 55 ends the obligation at a pension income tax rate of 3.3–5.5% — according to Toss Bank. The premise that must come before the calculation is that money going into a pension account must be money you can keep locked up until age 55.
What to Watch
Limits and credit rates fit on a single table, but the actual refund amount is set by the following variables.
- December 31 contribution deadline — contributions are reflected in that year's credit based on the actual deposit date, not a scheduled transfer date
- The 55 million won total salary boundary — if salary crosses this boundary due to bonuses or job changes, the credit rate shifts between 16.5% and 13.2%
- ISA maturity schedule — the additional credit (10% of transferred amount, up to 3 million won limit) is only available in the year maturity funds are moved to a pension account
- Tax law amendments — the limits and credit rates in this article are based on National Tax Service public data as of July 2026; if special tax provisions are revised, the entire calculation changes
- Likelihood of needing funds before age 55 — if there is a plan to withdraw early, reducing the contribution amount to account for the 16.5% miscellaneous income tax is the safer approach
