Easy Guide for Foreigner's Year-end Tax Settlement
Next month, not only domestic workers but also foreign workers will have to make year-end tax adjustments for last year's earned income.
According to the National Tax Service on the 3rd, foreign workers have something to keep in mind during this year-end tax adjustment.
I summarized it by referring to the National Tax Service 2023 Interantional Worker's Year-end Tax Settlement Guide.
* For the additional translation required, papago was used.
* NTS ( Help -line for Foreign Employees) 1588 - 0560 and NTS english website
Flowchart of Tax Base & Income Tax Calculation for Foreign Employee
Annual wage & salary incom ( - ) Non- taxable income
1) Refers to all forms of compensation received in exchagne for provision of serive of employment ( excluding compensation for service provided by daily workers)
2) Compensation for actual expenses
(Owner driver subsidy, research subsidies, travel expenses paid under company regulations : up to 200,000 won per month )
3) Wage & salary income from overseas : Up to 1 mil. won (3 mil, won) per month
4) Non-taxable tuition expenses, work- study scholarship
5) Allowance for overtime work paid to workers in manufacturing or related industries : up to 2.4 mil. won per year
6) Meal expenses or meal allowances up to 200,000 won per month
7) Childbrith allowance up to 100,000 won per month and chidcare allowance of children aged 6 and under as of the date of commencement of the relevant taxable period.
8) Childcare leave benefits, maternity leave benefits, etc. paid pursuant to the Emplyment Insurance Act
Gross wage & salary income ( - ) Deduction of wage & salary income
(* gross wage & salary income = Annual wage & salary income - Non -taxable income)
| Gross wage * Salary Income Bracket | Deduction (up to 20 mil. won) |
| Up to 5 mil. won | 70% of gross wage & salary income |
| Over 5 mil. won - Up to 15 mil.won | 3.5 mil. won + 40% of the amount over 5 mil. won |
| Over 15 mil. won - Up to 45 mil.won | 7.5 mil. won + 15% of the amount over 15 mil. won |
| Over 45 mil. won - Up to 100 mil. won | 12 mil. won + 5% of the amount over 45 mil. won |
| Over 100 mil. won | 14.75 mil. won + 2% of the amount over 100 mil.won |
Adjusted wage & salary income ( - ) Personal deduction
(* Adjusted wage & salary income = Gross wage & salary income - Deduction of wage & salary income )
1) Basic deduction : 1.5 mil. won per person
> An employee, his/her spouse with annual income of 1 mil. won or less
(if he/she only has wage &salary income, gross wage & salary income of 5 mil. won or less )
and dependents living together (persons other than disabled persons should meet age requirements)
2) Additional deductions (when a person who is qualified for basic deduction falls under any of the following )
> The disabled : 2 mil. won per person
> The elderly (aged 70 years or older ) 1 mil. won per person
> Woman : 0.5 mil. won.
> Single parent : 1 mil. won
( - ) Pension contribution deduction
1) National pension contribution by an employee : Full amount
( - ) Special income deduction
1) Insurance premium
( National health insurance, employment insurance, long-term care insurance premium : Full amount )
2) Housing fund deduction
(40% deduction of repaid principal on housing lease loan : up to 3 mil. won per year)
(Deduction of interest payment on housing lease loan : up to 3 mil. to 18 mil. won per year)
( - ) Other Deduction
1) Personal pension savings : 40% of the deposits made in personal pension savings subscribed on or before Dec.31, 2000 (up to 720,000 won per year)
2) Deduction of deposits made in a mutual aid fund for small enterprises and small entrepreneurs
> ceiling : 5 mil. won for adjusted wage & salary income of 40 mil. wom or less : 3 mil. won for adjusted wage & salary income of 100 mil. won or less ; 2 mil. won for adjusted wage & salary income over 100 mil. won
3) Income deduction of contributions to a small and medium business start - up investment fund
> 10% of the investment or contribution amount is deducted (for direct investment in a venture company, the deduction rate is as follows : 100% for investment of 30 mil. won or less, 70% for investment of 50 mil. won or less, 30% for over 50 mil. won )
> Within 50% of the global income amount of the relevant year ; ceiling of 3 mil. won applied to venture business investment trust
4) Deduction of credit card spending,
* etc : Of the sum of the amount spent on credit cards, debit cards, prepaid cards and cash receipt amount, 15 to 80% of the amount over 25% of gross wage & salary income shall be deducted from income.
> Deduction ceiling
The ceiling shall be 3 mil. won where the gross wage & salary is not over 70 mil. won, and 2.5 mil won where the amount is over 70 mil. won
However, if the deduction amount is over the ceiling, the amount that is lesser of the following shall be additionally deducted from income ; the sum of the amount spent in traditional markets, public transportation fee, and amount spent on books and performances ( for cinema tickets, the amount spent on or after Jul.1, 2023 shall apply)
multiplied with their respective income deduction rate ; and 2 mil. won (3 mil. won if gross wage & salary is not more than 70 mil.won)
5) Deduction of contributions to employee stock ownership association
> The amount contributed by an employee stock ownership association member ot purchase stocks
(up to 4 mil. won per year, up to 15 mil. won for venture companies)
6) Employees of small - to - mid sized companies that have maintained the size of employment
( 50% of the reduced amount in wage payment / up to 10 mil. won per year)
7) Long -term collective investment security savings for youths : 40% of deposits in long- term collective investment security savings for youths (up to 2.4 mil. won per year)
8) Long- term collective investment security savings : 40% of deposits in long- term collective investment security savings (up to 2.4 mil. won per year)
Tax base ( x ) Basic tax rate ( 6% ~45% )
* Tax base = Adjusted wage & salary income - personal deduction - pension contribution deduction - special deduction - other income deduction + Amount exceeding the composite ceiling of income deduction)
( Amount in excess of composite ceiling for income deduction : where the composite ceiling for special income deduction and other income deduction exceeds 25 mil. won, the amount in excess shall be included in the tax base )
| Tax Base | Tax Rate |
| Up to 14 mil. won | 6% |
| Over 14 mil. won - Up to 50 mil.won | 840,000 won + 15% of amount over 14 mil. won |
| Over 50 mil. won - Up to 88 mil. won | 6,240,000 won + 24% of amount over 50 mil. won |
| Over 88 mil. won - Up to 150 mil. won | 15,360,000 won + 35% of amount over 88 mil. won |
| Over 150 mil. won - Up to 300 mil. won | 37,060,000 won + 38% of amount over 150 mil won |
| Over 300 mil. won - Up to 500 mil. won | 94,060,000 won + 40% of amount over 300 mil .won |
| Over 500 mil. won - UP to 1 bil. won | 174,060,000 won + 42% of amount over 500 mil. won |
| Over 1 bil. won | 384,060,000 won + 45% of amount over 1 bil . won |
'지원사업,정책 > Publication,News_E' 카테고리의 다른 글
| 2. Easy Guide for Foreigner's Year-end Tax Settlement (1) | 2024.01.06 |
|---|
