Mister Trot 3 Achieves Overall No.1 Viewership Rating... What Is the Actual Prize Money Received by the Winner?

Only 20% of Competition Program Prize Money is Taxable
Combined Income and Resident Tax Rate Applied at 22%
Actual Receipt from 300 Million Won Prize is 286.8 Million Won

Will the trot craze that swept the nation return? The third episode of TV Chosun's 'Miss Trot 3,' aired on the 4th, recorded a nationwide viewership rating of 16.9% (Nielsen Korea, paid households basis), marking its highest rating to date and ranking first among all Thursday programs. As the show entered the second round team mission and voting began in earnest, the peak viewership rating soared to 18.2%, proving its hot popularity.

Performance scene of the genre-specific team mission champion group from TV Chosun's 'Miss Trot 3'. [Photo by TV Chosun]

'Miss Trot 3,' where 46 finalists have entered full competition, saw Bae Ah-hyun from the active division take the top prize in the first round, with Bok Ji-eun from the rookie division winning second place, and Jung Seo-ju from the goddess division taking third place. As the competition began, curiosity about the final winner grew, along with interest in the prize money and special benefits.

Previously, the prize money for trot program winners was 30 million won for Miss Trot winner Song Ga-in and 100 million won for Mr. Trot winner Lim Young-woong. With the amount increasing over the seasons, the current prize money for Miss Trot 3's winner is 300 million won. TV Chosun also announced that special benefits include beauty care devices, six-star hotel beds, and premium joint health supplements.

While the prize money in the hundreds of millions is important, the actual amount received is less due to taxes. According to the Income Tax Act, one-time income such as prize money or lottery winnings is classified as other income and is subject to taxation. So, how much does the Miss Trot 3 winner actually take home?

Unlike lottery winnings, which are classified as unearned income, prize money received from participating in competition programs deducts 80% of the prize money as necessary expenses to calculate the taxable other income amount. Here, necessary expenses refer to costs exempted from taxation within taxable income.

TV Chosun 'Miss Trot 3'
[Photo by Miss Trot 3 broadcast capture]

In the case of business income, selling and administrative expenses are recognized as necessary expenses, and only the remaining amount is taxed. Similarly, other income recognizes expenses incurred to earn the income as necessary expenses. In other words, for competition program winners, taxes are imposed after deducting costs such as stage preparation and singing practice before winning first place.

For example, in Miss Trot 3, the other income amount for the 300 million won prize money is 60 million won (20% of 300 million won), and a 22% tax rate including resident tax is applied to withhold taxes. Therefore, from the 300 million won prize money, 13.2 million won [(300 million won - 300 million won × 80%) × 22%] is withheld as tax, and the winner receives 286.8 million won.

However, since the prize money is subject to comprehensive taxation, additional income tax may need to be paid when combined with other comprehensive income.

Also, taxes apply without exception to prizes such as beauty care devices, six-star hotel beds, and premium joint health supplements provided along with the prize money. Like the prize money, 80% of the value of these goods is recognized as necessary expenses, and the remaining amount is taxed at 22%.

Lotto image

Besides competition prize money, lottery winnings, horse racing betting tickets, sports toto refunds, and slot machine winnings or dividends are also classified as other income because they are incidental income. For lottery winnings such as Lotto and pension lottery, amounts up to 300 million won are subject to a 22% withholding tax, and amounts exceeding 300 million won are taxed at 33%, with separate taxation.

For example, if the first prize in Lotto is 1.5 billion won, taxes amounting to 462 million won [(300 million won × 22%) + (1.2 billion won × 33%)] are imposed, and the winner receives the remaining 1.038 billion won.

From this year, the minimum taxable amount for lottery winnings has been significantly raised from 50,000 won to 2 million won, so winners of Lotto 5th prize (5,000 won), Lotto 4th prize (50,000 won), and even Lotto 3rd prize, which averages around 1.5 million won, do not have to pay taxes on their winnings.