2014 Year-end Settlement of Individual Income Taxes

Guide for 2014 Year-end Settlement of Individual Income Taxes

An employer paying wage and salary income must withhold income tax monthly from the earnings of their employees based on the “Quick Tax Table” issued by the National Tax Service and the total of these income tax withholding has to be paid over to the district tax office by the 10th day of the following month throughout the year.

After the year-end, in February of every year, the tax liabilities of each employee's (excluding daily workers) prior year wage and salary are then finalized by its employer through the declaration ofyear-end settlement of exact payroll withholding taxes in Korea.

Based on the results of year-end settlement, the employer shall make necessary adjustments for any overwithholding (or underwithholding) in the February payroll accordingly.

For the recent changes of rules for 2014 year-end settlement of individual income taxes, please refer to Section 3. Individual Income Tax Law (IITL) on page 3 below