The topic of today’s posting is to learn about the taxes of Korean Lotto. I’ll start right away.
korea lotto
Lotto is a South Korean lottery in which six numbers are selected randomly from 1 to 45 and the prize money is paid according to the number of matching numbers regardless of the order on Saturday, the day of the lottery announcement.
Lotto Winning Categories:
- Match 1 out of 6 lotto numbers : No prize
- Match 2 out of 6 lotto numbers : No prize
- Match 3 out of 6 lotto numbers : 5th prize
- Match 4 out of 6 lotto numbers : 4th prize
- Match 5 out of 6 lotto numbers : 3rd prize
- Match 5 out of 6 lotto numbers + match bonus numbers : 2nd prize
- Match all 6 numbers : 1st prize
The bonus number is only relevant for the 2nd prize.
Lotto Prize Distribution:
- 1st prize: 75% of the total prize pool, excluding amounts for 4th and 5th prizes.
- 2nd prize: 75% of the total prize pool, excluding amounts for 4th and 5th prizes.
- 3rd prize: 12.5% of the total prize pool, excluding amounts for 4th and 5th prizes.
- 4th prize: 50,000 won (fixed amount)
- 5th prize: 5,000 won (fixed amount)
The total prize money is 50% of the total Lotto sales, and more than 42% is used as a lottery fund.
The prize money for the first, second, and third lotto is determined by the total sales and the number of winners in the corresponding round. From the total amount, the corresponding amount for each rank is divided by the number of winners.
If there is no first prize winner of the lottery, the first prize money will be carried over and added to the first prize money for the next round, and if there are no second to third prize winners, it will be included in the direct prize money.
The consecutive carry-over of the first prize money in Lotto is limited to two times, and if there is no first prize winner in the third consecutive carry-over, the prize money will be included in the direct prize money.
The actual amount of lottery prize money received:
The actual amount of the lottery prize money is the amount excluding tax from the prize money. Lotto 1st, 2nd, and 3rd place depend on total sales.
You’re curious how much it is, right?
- Average winning money for the first prize in Lotto: 2 billion won, and average receiving money for the first prize in Lotto: 1.4 billion won
- Average amount of prize money for second place in Lotto: 50 million won, average amount of prize money for second place in Lotto: 40 million won
- Average amount of prize money for third place in Lotto: 1.5 million won, Average amount of prize money for third place in Lotto: 1.2 million won
Lotto Tax Rates:
If the Lotto prize is 300 million won or less, a 22% tax is applied (20% for general income tax and 2% for local income tax). For the portion exceeding 300 million won, a 33% tax is applied (30% for general income tax and 3% for local income tax).
If the prize money is 1 billion won, the total tax to be paid is 297 million won (300 million × 22% + 700 million × 33%). If the prize money is 1 billion won, 33% 330 million won is not tax, but up to 300 million won is 22% for the excess of 700 million won. You understand, right?
- Lotto 1st place tax: 33%
- Lotto 2nd place tax: 22%
- Lotto third place tax: 22%
- Lotto 4th place tax: No tax
- Lotto 5th place tax: No tax
Ways to Check Lotto Winning Numbers:
In the past, people had to manually check the winning numbers against their Lotto tickets, marking the matching numbers with a pen.
Later, they could check online by entering their numbers in a search field, which would show them the matching results.
The most recent method is to use QR codes. By searching “로또당첨번호조회” (Lotto winning number inquiry) on Naver with a smartphone, a “QR코드 확인” (QR code verification) button appears under the winning numbers. By aligning the Lotto ticket with this QR code, the results are displayed immediately. This method is the simplest, so try using it. By searching “로또” (Lotto) on Naver, “로또당첨번호조회” (Lotto winning number inquiry) will directly appear at the bottom.