Monthly Withholding Tax    

Employers are required to deduct withholding tax from each employees salary each month. The withholding tax is calculated based on the Simplified Tax Withholding Table issued by the National Tax Service.

The employer must remit to the NTS the taxes withheld for each employee by the 10th day of the following month. Each employee (foreign employees included) should receive a receipt of the withholding tax from her/his employer. Note that employers who have less than 20 employees can, with the permission of the tax office, pay the taxes withheld twice a year instead of every month - the tax will still be deducted from each pay (twice a month if the employee is paid twice a month, etc.).

The rate of the withholding tax varies according to the Simplified Tax Table - may be 3.3% or 4.4% or more. The reconciliation occurs with the year-end tax settlement - 10 March for employees (10 May for self-employed or free lancers). 

Making up the short-fall: Employeers often begin working on employee's tax settlements in January. If they notice that not enough withholding has been deducted for an employee, they will make the reconcialiation in the employee's February pay. Consequently, the money receive in February is sometimes less than usual to make up the difference.


K4E Note: The above is based on information on the National Tax Service website. It is intended as general information only. For more details, readers should visit the NTS website.
Amendments to the tax laws/rules are often adopted in January of the year in which they will take effect. We do our best at K4E to ensure that the information we provide is accurate and up-to-date.  Should you note any errors or ommissions, please let us know at info@korea4expats.com.