Crack cash payouts: the 8.8% is other-income tax, not a fee — what you receive, May filing, business registration

When you convert Crack cash to money, the 8.8% that disappears is not a fee: it is income tax withheld on "other income" (기타소득) under Korea's Income Tax Act, so converting KRW 1,000,000 leaves KRW 912,000 in your bank account. If you have little other income, you can get most of it back by filing Korea's comprehensive income tax return in May.

Crack (크랙) is a Korean AI character-chat platform run by Wrtn (뤼튼); creators earn "cash" there when users spend paid Crackers on their works. I wrote this for creators who are building up cash on Crack. I've worked on payment and settlement code as a backend developer. On 2026-09-30 I saved the original text of Crack's announcement and cash guide, then recomputed the 8.8% from the articles of the Income Tax Act. I also read the Crack cash screen on my own account and the tax calculation in Crack's public web code. This is not tax advice. Your actual tax depends on your own income mix and the facts of your situation.

The 8.8% is withholding tax on other income

Other income (기타소득) is the Korean tax category for irregular income such as lecture fees, and the payer withholds tax before paying you. The 8.8% is exactly what the other-income withholding formula produces. 60% of the payment is deducted as deemed necessary expenses, and the remaining 40% is taxed at 20%. Local income tax of 10% of that is added on top.

Here is the calculation for a KRW 1,000,000 conversion:

Conversion           KRW 1,000,000
Other-income amount = 1,000,000 × (1 − 0.6) = 400,000   Income Tax Act Enforcement Decree Art. 87(1-2)
Income tax          = 400,000 × 20%          =  80,000   Income Tax Act Art. 129(1)6(d)
Local income tax    = 80,000 × 10%           =   8,000   Local Tax Act Art. 103-13(1)
Total KRW 88,000 = 8.8% of the payment, deposit KRW 912,000

In Korean, those citations are 소득세법 시행령 §87 1의2, 소득세법 §129①6라 and 지방세법 §103의13①.

Crack's own documents point the same way. The screen where you register your conversion details carries a personal-data collection notice. As its legal basis it cites Income Tax Act Articles 21, 127, 145 and 164. Article 21 defines other income, and Article 145 sets out how other income is withheld. Article 144, the withholding provision for business income, is not on the list.

The Crack Originals notice is more direct. On payouts to original authors, it says they are "transferred to your account after 8.8% other-income tax withholding" ("기타소득세 8.8% 원천징수 후 계좌로 이체"). The 3.3% that Korean freelancers usually see deducted is business-income withholding. Crack cash is handled differently.

Converting KRW 1,000,000 puts KRW 912,000 in your account

What lands in your account is the conversion amount minus 8.8%. The rate at which cash accrues depends on your work's rating and whether it is registered for Crack Only. Your paid Cracker usage is multiplied by that rate, and the resulting cash arrives on the 1st of the following month.

As an example, I took a work with 100 million paid Crackers used in a month. I picked a large number to reach the range where the deduction actually bites. I assumed all accrued cash is converted at once:

Tier	Accrual rate	Cash earned (KRW)	8.8% withheld (KRW)	Deposit (KRW)
Regular creator, Safety	1.0%	1,000,000	88,000	912,000
Official creator, Unsafety (from 9/1)	1.0%	1,000,000	88,000	912,000
Official creator, Safety	1.5%	1,500,000	132,000	1,368,000
Official creator, Unsafety + Crack Only	2.0%	2,000,000	176,000	1,824,000
Official creator, Safety + Crack Only	2.5%	2,500,000	220,000	2,280,000

Crack Only started on 2026-08-12. Only official creators' works can apply (per the notice as of 2026-09-30). In exchange for publishing a work exclusively on Crack for 18 months, the rate goes up by 1 percentage point. Each series has a cumulative payout cap of KRW 1 billion, counted afresh from September 1.

The conversion screen calculates the same way. In the public web code, the amount you enter is multiplied by a taxRate supplied by the server. Fractions of a won are dropped. The screen shows the requested payout amount (지급 요청 금액) and the tax deduction (세금 공제). Below those come the expected payout amount (예상 지급 금액) and expected payout date (지급 예상일). The guide adds that the tax calculation on the screen is an example.

My account holds 0 cash, so I couldn't bring up that screen myself. When you tap 현금으로 바꾸기 (Convert to cash), you're first told to register your conversion details (전환 정보). The guide says Crack takes some time to verify the registered details.

Cash-out starts at KRW 10,000 and pays on the 10th and 25th of each month

Crack announced a revamp of its payout policy on 2026-07-29. From September 1, cash can be converted to money. The name also changed from Wrtn cash to Crack cash. Exchanging cash for goods in the old cash store ended that day.

The conversion terms are in the Crack cash guide (revision of 2026-09-03):

• The minimum request is KRW 10,000, with no cap per request.
• There is no conversion fee.
• Payouts go out on the 10th and 25th of each month (the next business day if that date is a holiday), and you must apply at least 5 business days before a payout date.
• You register your name, resident registration number and a bank account in your own name, and submit copies of your ID and bankbook.
• Minors aged 14 or older also submit a guardian consent form, a family relation certificate and the guardian's ID. Their limits are KRW 2,000,000 per request and KRW 10,000,000 per month.

The balance is shown in won, not in cash units. In its Super Week notice, Crack said one Cracker is worth KRW 1. But I found no sentence stating that 1 cash equals KRW 1. The amounts in this post assume 1 cash = KRW 1.

Conversions of KRW 125,000 or less are not taxed under the statute

Under Income Tax Act Art. 84, no tax is imposed when the other-income amount per payment is KRW 50,000 or less. Working backward with the 60% expense deduction, the boundary is a KRW 125,000 conversion. Up to KRW 125,000 the tax is KRW 0; at KRW 200,000, KRW 17,600 is deducted.

However, Crack's documents don't say whether it treats one conversion as one payment under that article. The web code has no branch by amount either; it applies the same rate. The guide only says tax "may be" deducted.

I don't recommend splitting conversions into small pieces to stay under the boundary. Without knowing how Crack counts payments, all you'd get is more requests.

Cash saved over several months is reported in one lump on the payment date

Withholding happens on the day money is actually paid out. If you convert several months of cash at once, it is not split by the month it accrued. The guide says it is reported in a lump sum based on the payout date. It also tells you to keep that in mind when filing your comprehensive income tax return.

So on the payment statement Crack files with the National Tax Service, the amount is grouped under a single payout date. The figures to check in May are your conversion history, not your accrual history. If you note the amount and the deduction for every conversion, reconciling later is easy.

Crack's 8.8% and May income tax: at KRW 3,000,000 of other-income amount or less, you can choose separate taxation

Korea's comprehensive income tax return (종합소득세) for the previous year is filed in May. As long as Crack cash is treated as other income, which path you take depends on your total other-income amount for the year. If your other-income amount is KRW 3,000,000 or less, you can choose separate taxation.

That total also includes other withheld other income, such as lecture fees. Other income that the statute always taxes separately or always combines is left out of it (Income Tax Act Art. 14(3)8(a)).

If Crack is your only such income and the 60% expense deduction applies, the boundary is KRW 7,500,000 of conversions. If your actual expenses exceed 60% and you deduct those instead, the boundary goes up (proviso to Enforcement Decree Art. 87(1-2)).

If you choose separate taxation (분리과세), the withholding is final. If you have no other comprehensive income, you don't need to file in May (Art. 73(1)8). In return, you don't get back the tax already withheld.

If you choose to combine (합산), it is added to your other income and recalculated at the basic progressive rates. I ran the numbers for someone with no income besides Crack. I included only the KRW 1,500,000 basic personal deduction and the KRW 70,000 standard tax credit:

Annual conversions (KRW)	Other-income amount (KRW)	National tax withheld (KRW)	Separate taxation	Tax determined if combined (KRW)	National tax refunded (KRW)	Refund incl. local tax (KRW)
1,000,000	400,000	80,000	Available	0	80,000	88,000
7,500,000	3,000,000	600,000	Available	20,000	580,000	638,000
20,000,000	8,000,000	1,600,000	Not available, must combine	320,000	1,280,000	1,408,000
50,000,000	20,000,000	4,000,000	Not available, must combine	1,445,000	2,555,000	2,810,500

Once that total exceeds KRW 3,000,000, there is no choice. Combining is mandatory and you file by May 31. Even someone who converted KRW 50,000,000 in a year gets a refund if Crack is their only income. Withholding is 20% of the income amount. The tax on a KRW 18,500,000 tax base at the basic rates comes out lower than that.

If you have a salary, combining costs you more from the 24% marginal bracket up

If you have employment income, the other-income amount sits on top of it. Compare the 20% withholding with your marginal rate. I calculated for an employee who converted KRW 10,000,000 in a year, which is an other-income amount of KRW 4,000,000:

Existing tax base (KRW)	Marginal rate	National tax difference if combined (KRW)
10,000,000	6%	Refund 560,000
30,000,000	15%	Refund 200,000
70,000,000	24%	Additional payment 160,000
120,000,000	35%	Additional payment 600,000

If the added amount stays inside the 6% or 15% bracket, combining works in your favor. From the 24% bracket up, combining means paying more. If the added amount crosses a bracket boundary, compare the tax with and without combining. When combining costs more and that eligible total is KRW 3,000,000 or less, ending it with separate taxation is the better choice.

The KRW 4,000,000 in this example is over KRW 3,000,000, so combining is mandatory. This is a simple comparison that leaves out any change in deductions on the employment side.

Creators paid out every month should check the business registration test

Right now Crack handles cash conversions as other income. But the platform doesn't decide the income category. Income Tax Act Art. 19(1)21 does. Income from activity carried on continuously and repeatedly for profit is business income.

Korea's National Tax Service published a tax guide for YouTubers and other new types of business, 유튜버 등 신종업종 사업자 세무안내 (PDF, Korean). It says that even without a matching industry code, doing the activity continuously and repeatedly creates an obligation to register as a business. The test is scale and frequency, not whether you have registered. A creator who gets paid out every month may well meet it.

If it becomes business income, a few things change:

• Necessary expenses are no longer a fixed 60%; they come from your books or the official expense rates.
• If you create alone, it may qualify as VAT-exempt personal services. The basis is VAT Act Art. 26(1)15 and Enforcement Decree Art. 42.
• Under the National Health Insurance dependent rules, business income is counted separately.

Health insurance dependents: KRW 20,000,000 a year; dependent tax deduction: KRW 1,000,000 of income amount

If you're listed as a dependent on a family member's National Health Insurance (피부양자) or claimed as a dependent on their tax return (부양가족), this part may matter more. To stay a health insurance dependent, your total income must be KRW 20,000,000 a year or less. Business income is looked at separately. With no business registration and KRW 5,000,000 a year or less, it is treated as zero.

I couldn't confirm whether other income is counted as gross receipts or as income amount here. If it's counted as income amount, the boundary is KRW 50,000,000 of conversions.

The basic deduction for a dependent requires a total income amount of KRW 1,000,000 or less. With Crack income only, that is KRW 2,500,000 of conversions. Whether amounts taxed separately count toward it is left as unverified.

Finding the withholding record for Crack payouts on Hometax

Hometax (홈택스) is the National Tax Service's e-filing site. Type 원천징수영수증 (withholding receipt) into its integrated search (통합검색) and 14 menus come up. Only one of them is for the person receiving income: 지급명세서(원천징수 내역)등 조회 (payment statement / withholding history lookup), under 나의 소득·연말정산 (my income and year-end settlement). The rest are for companies making payments.

The May return is filed under 세금신고 (tax filing) → 종합소득세 신고 (comprehensive income tax return). If you missed the deadline and only want your refund, there is a separate 종합소득세 기한후 환급신고 (late refund filing for comprehensive income tax) menu. I couldn't confirm when Crack payouts show up on the screen after you log in.

Checklist before you convert your cash

1. Prepare a copy of your ID and a copy of a bankbook in your own name. Minors need three additional guardian documents.
2. Verifying conversion details takes time, so register them well ahead of the 5-business-day cutoff before a payout date.
3. Every time you convert, save the tax deduction and deposit amounts shown on the screen.
4. Before May of the following year, check the Crack payouts in Hometax's payment statement lookup.
5. If your eligible other-income amount for the year (Crack included, always-separate items excluded) is KRW 3,000,000 or less, choose whichever of separate taxation or combining works in your favor. If it's more, file a combined return.
6. If payouts keep coming every month, first ask your tax office or a tax accountant whether it counts as business income.

Takeaways

The 8.8% Crack deducts on cash-out is other-income withholding, not a fee, and if your other income is small, filing in May can get most of it back. Record every conversion, check the payout on Hometax before May, and if you're paid out every month, ask a tax office or accountant whether it is business income.

Unverified

This post is not tax advice. I couldn't confirm the items below from original documents or screens, so they are stated with conditions. The conclusion can change depending on your facts.

• Cash-to-won conversion: there is no official statement. There is only a balance shown in won and a notice saying one Cracker is worth KRW 1.
• Which item of other income applies: Crack hasn't said. Whether it's Art. 21(1)15 or item 19, the deemed expense is 60% either way, so the 8.8% is the same.
• Whether the minimum taxable threshold applies per conversion: not confirmed. The web code applies the same rate regardless of the amount.
• Whether it counts as business income: this is a question of fact. I found no industry code or official ruling for AI character creation.
• Whether it qualifies as VAT-exempt personal services, and whether the penalty for not registering applies: not confirmed.
• Expense rates for tax year 2026: they are published in April 2027. So I did not calculate the tax for the business-income case.
• How other income is counted for health insurance dependents: I couldn't confirm whether the basis is gross receipts or income amount.
• Whether separately taxed amounts count toward the dependent tax deduction: I couldn't settle it from the statute alone.
• When payouts appear on Hometax: unknown, since I didn't see the screen after logging in.
• The actual rate on the conversion screen: I couldn't bring the screen up because my account balance is 0. I don't know whether the server's taxRate is 0.088.
• How long the first payout takes to arrive: I haven't seen a case from the September payouts.

Changelog

Version	Description
1.0	2026-09-30 First English version, adapted from the Korean original (Crack announcement and cash guide text, Income Tax Act articles cross-checked, conversion math reproduced, Crack cash screen checked)

Cover image: AI-generated (OpenAI Images)

AI disclosure: translated and edited with AI assistance (Claude) from my Korean original. Measurements were run with Claude Code under my supervision; I reviewed the result.