Calculation of domestic stock trading fees, taxes and yields


When you buy or sell stocks, you can see commissions and taxes when you look at the transaction history. Below is a screenshot of a recent sell transaction.

The transaction amount is KRW 4,945,000, but if you add fees and taxes, it is KRW 12,113. If you make a stop loss, the amount of the loss must be added to the difference as well as fees and taxes. The screen below shows the transaction details for selling, and since commissions are charged even when buying, the total net profit must include the purchase fee.

 

 

 

In the meantime, I had neglected it, but I took the time to find out about fees and taxes. I found out how to calculate the amount of profit and the rate of return.

 

 

 

(photo source)

 

 

Stock trading cost = (consignment fee + related agency fee) + tax

 

You pay commissions and taxes when you buy (buy) and sell (sell) stocks. There are commissioning commissions from securities companies and commissions paid by the Korea Exchange and Korea Securities Depository. And when you sell, you have to pay securities transaction tax. These fees and taxes are automatically withdrawn when trading stocks.

 

Consignment fee

Consignment fee refers to the fee for doing something on my behalf. In stock trading, brokerage commission is a commission that a brokerage company pays in lieu of trading stocks on your behalf. Consignment commission, commission transaction commission, brokerage company commission, etc. are all the same.

Consignment commissions vary by brokerage company and are deducted in the form of a percentage of the transaction value. The larger the transaction amount, the higher the fee. When trading, it automatically exits as shown in the screenshot above.

When I went to the brokerage company website to see what the commission rate is, the commission rate is different depending on the method of trading. The commission rate is different for each order by visiting the store, ARS by phone, HTS by phone, and MTS by smartphone, and each transaction amount is different.

Professionals will use HTS, but these days, a lot of people use smartphones, so it's good to check your own fees.

 

 

Relevant agency fee

Relevant agency fees are referred to as related institutional fees, and refer to fees paid to the 'Korea Exchange (KRX)' and 'Korea Securities Depository' (+ Financial Investment Association, etc.).

When a brokerage company conducts a transaction fee free event, it is important to look closely at it, as it provides its own commissioning fee for free and receives a separate fee from related institutions. These days, it is sometimes written in small print on fee-free events that the related agency fee is separate.

In 2020, the related agency fees were temporarily free. So, when a brokerage company held a free commission event, two commissions could be free. However, as of 2, the related agency fees have been revived, so it is necessary to check whether related agency fees are also free when the brokerage company offers a fee-free event.

The related agency fees are said to be about 0.0036 to 0.0039% of the transaction amount. However, I found that the cost of the related institution differs depending on whether the contract is between a securities company and a related institution. That is why, it seems that the commission fee and the related agency fee are combined in the transaction fee at the time of transaction.

So, if my fee is 0.15%, it includes the related agency fee, and if my fee is about 0.0036%, it can be estimated that the commissioning fee is free and only the related agency fee is paid.

 

Tax (Security Transaction Tax, Special Rural Tax)

The securities transaction tax is a tax paid on the sale of securities, which are securities. It is a type of distribution tax that is levied when the circulation of goods occurs. Korea's Securities Transaction Tax Act stipulates that the withholding tax is withheld from the seller of securities, so it is automatically withdrawn when trading stocks.

A special tax is levied on the transfer of stocks in the stock market.

 

I made a table of securities transaction tax and special tax for rural areas.

Different exchanges have different tax rates as follows. However, the stock transaction tax on the KOSDAQ is higher than that of the KOSPI, but there is no special tax for rural areas, so both the KOSPI and KOSDAQ are 0.23%.

securities transaction tax Rural special tax 합계
Securities (KOSPI) 0.08% 0.15% 0.23%
KOSDAQ 0.23% 0.23%

 

The securities transaction tax is 0.23%, which was applied from 2021 and was 0.25% until then.

It turned out that the securities transaction tax rate, which pays 0.25% of the sale price (including special tax for rural areas) when selling stocks to revitalize the stock market, will be lowered to 0.23%.

 

Ministry of Strategy and Finance  2021 will be like this.pdf   From 2023, the securities transaction tax will be lowered to 20% in line with the income tax (25-0.15%) on gains on stock transfers.

~2020 2021-2022 years 2023~
KOSPI 0.10% 0.08% 0%
KOSDAQ 0.25% 0.23% 0.15%

 

The following is a summary of the special cells for rural and fishing villages.

Securities transaction tax (including special cells for rural and fishing villages)
~2020 0.25%
20201-2022 0.23%
2023~ 0.15%

 

 

 

Stock trading costs when buying and selling

You pay tax only when you sell, not when you buy and sell.

Consignment fee Relevant agency fee tax
매수 O O X
sell O O O

 

  • Transaction cost at the time of purchase = purchase amount * (consignment commission rate + related institution commission rate)
  • Transaction cost when selling = selling amount * (consignment commission rate + related agency commission rate) + (selling amount * tax rate)

 

Consignment fee + related agency fee remains as a fee, and this varies from broker to broker. The tax on both purchases and sales is 2022% until 0.23.

To make it easier to recalculate, it is as follows:

  • Transaction cost at the time of purchase = purchase amount * my brokerage company commission rate
  • Transaction cost when selling = (selling amount * my brokerage company commission rate) + (selling amount * 0.23%)

 

 

 

(photo source)

 

 

Finding Profits and Yields

 

The rate of return can be simply calculated as:

Yield (%) = ((Sell price/Buy price)-1)*100

However, there is a problem in that it does not include transaction costs such as fees or taxes involved in the transaction, so it is not possible to obtain the actual rate of return excluding the costs.

 

I don't know what the commission rate formula is for each brokerage company, but what I found from the screen capture of Kiwoom Securities HTS found on the Internet is as follows.

 

I've re-arranged only the necessary parts above.

purchase fee
(selling price * quantity) * transaction fee rate
Sell ​​Fee
(sale price * quantity) * transaction fee rate + (sale price * quantity) * tax rate (0.23%)
Valuation amount
(current price * quantity) -Buying fee -Selling fee -Tax
Valuation loss
Valuation amount – purchase amount
yield
Valuation loss / purchase * 100

 

 

 

What is the commission and rate of return when buying and selling 1,000 million won worth of stock?

 

We calculated the transaction fee, profit amount and yield when an individual's brokerage company's commission rate (consignment commission + related agency commission) was 0.015% and 1,000 million won worth of stock was bought and sold as it is.

 

If you calculate the rate of return without considering the cost, you bought 1000 million won worth of money and sold it at that price, so the rate of return is 0%.

Yield (%) = ((Sell price/Buy price)-1)*100

 

However, when transaction costs are taken into account, the rate of return is -0.26%.

The total transaction fee is 26,000 won.

transaction amount Total transaction fee Brokerage company commission (mostly 0.015%) Tax (0.23%)
매수 10,000,000 1,500 1,500 0
sell 10,000,000 24,500 1,500 23,000
transaction fee 26,000

There is a fee for buying and selling securities, and there is a tax on selling. While the brokerage commission is 3,000 won, the tax is 23,000 won, which is a relatively higher tax.

 

The valuation gains and losses are as follows. I just bought and sold it at the same price, and it was -26,000 won, and the yield was -0.26%.

Valuation amount 9,974,000
Valuation loss .
profit margin -0.26%

 

If you do this 10 times, 26 won goes out as transaction fees and taxes without any profit. It's not a loss, it's a loss even if you sold it at full price!

 

Although the tax is greater than the securities transaction fee, if you consider the transaction cost of trading stocks anyway, frequent trading without profit will only increase your loss.

 

 

Minimum return when selling

A person who has been negative for a long time without losing a stop may think that he will sell it if he pays the full price. However, I saw through the above formula and sale that it would be a loss even if it was sold in the original store. So, you have to earn the transaction cost to be the real deal.

When I calculated it, if the rate of return is 0.32%, it seems to be worth the money. Of course, except for the time I spent and the pain I suffered.

I don't know if the formula for calculating the rate of return of each brokerage company includes the purchase cost as above, but it seems that commissions and taxes should be well considered when buying stocks.

If the rate of return is 5% or 30%, you may not need to do this calculation, but it seems to be a stock calculator if you trade frequently or if the rate of return is low.

 

 

 

smart stock calculator

When buying, we often calculate how much to invest for each stock, when calculating the flat price when watering and burning, and how much to sell to get a percentage return before selling. at times like this smart stock calculatorIt seems convenient to use.

 







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