Year-end tax settlement

Basic income tax rate is from 8 to 45% but monthly withholding tax amount is calculated by the "Simplified Tax Withholding Table" by National Tax Service. Withholding agent(employer) should withhold and pay monthly income tax to the district tax office and file year-end tax settlement which will finalize your tax liability in Korea by the end of January or the month you retire. Once that is done, withholding agent should issue to you the Receipt for Withholding Taxes that show your income and taxes paid.

Your income tax liability for the year is settled and finalized in January next year through year-end exact computation by your employer. Then, the total of monthly deduction(the amount withheld) taken off your earnings is treated as a credit against the overall amount of tax payable by you for the tax year in question. Your employer must calculate the tax amount for the year at the time of first payment of wage and salary income the next year, and collect or refund the balance between the tax amount payable calculated by applying the tax rates and the tax amount withheld according to the Simplified Tax Withholding Table.

Yonsei HR team notifies the year-end tax settlement details at the end of January every year. Every employee should submit documents for tax deduction during the designated period.

Please refer to National Tax Service website for further information.