Withholding Tax

How is the penalty for late reporting of withholding tax calculated?

• No additional tax for failure to report, but there is an additional tax for late payment
• Unpaid tax amount × 3% + (underreported/unpaid tax amount × 2.2/10,000 × elapsed days) ≤ 50%
• Additional tax related to withholding tax can be calculated using the National Tax Service calculator

Who is eligible to apply for semi-annual withholding tax payments?

• Corporations and individual business owners with an average number of regular employees of 20 or fewer during the previous taxation period
• If there is only business income payments and no labor income, application is possible
• The calculation method for regular employees is based on the average number of employees over the last 12 months as of the last day of each month (excluding daily workers)

What is the deadline for reporting the interim payment statement?

• Employment income - Last day of the month following the end of the half-year period in which the payment date falls
• Resident's business income - Last day of the month following the payment date month
• Resident's other income - Last day of the month following the payment date month

How do I report labor costs?

• Day labor (short-term work)
• (Daily rate - 150,000 won) X 6% X (1-55%) + local tax 10%
• Regular employee (continued work)
• Applies income tax rate (withholding tax reported monthly)
• Freelancer (providing services without employment relationship)
• Payment amount X 3.3% withholding