Income tax table for 2013
Taxable
income
bracket
Total tax on
income below
bracket
Tax rate on income in
bracket
From KRW
To KRW
KRW
Percent
0
• Taxes and social security charges are deducted
through monthly payroll with the payment of
individual income tax and social security charges
withheld due by the 10th day of the following month.
• The National Pension Scheme is a social insurance
scheme. The contribution of workplace based insured
persons is equally shared by the employer and the
employee (the insured person), while individually
insured persons, including voluntarily insured persons
and voluntarily & continuously insured persons,
pay all amount of their contributions themselves.
• South Korea has a National Health Insurance (NHI)
system, which is compulsory and required by
Korean law. It is paid by an individual’s employer
and is taken from the employee’s salary; half of the
total contribution is paid by the employer and half
by the individual at approximately 3.1378975%
respectively. The contribution is proportional to the
wage earned with an income ceiling of KRW 78.10
million per month for the monthly contributions.
720,000
15
88,000,000
5,820,000
24
300,000,000 15,900,000
35
300,000,001
• Employment insurance system has several subcomponents within the system, such as the
employment stabilisation program, the job skills
development program and unemployment benefits,
etc., and the calculation of the employment
insurance payment is rather complex, taking into
account of insurance fee rate applicable to each
component. Contribution rate approximately 0.80%
to 1.40% for employers and 0.55% for employees
46,000,000
88,000,001
• Employers would be required to pay approximately
0.60% to 35.40% of total payroll for industrial
accident compensation insurance, which would
be divided into 4 quarterly payments. Insurance
payment rate may vary depending upon the
total payroll amount and the type of industry.
6
46,000,001
• The contribution is calculated by multiplying the
worker’s reported (by the employer) monthly
income by the 9% rate (between minimum KRW
240,000 and maximum KRW 3,890,000). Both
the employer and the employee each pay an
equal amount of the required 9% contribution.
The employer deducts 4.5% from the employee’s
wage and must make the matching 4.5%
contribution payment at the same time.
0
12,000,001
• Employers are encouraged by the government to
switch from retirement allowances to retirement
pension, because retirement allowances are typically
spent before employee’s later years. Defined benefit
(DB) or defined contributions (DC) are two types
offered in retirement pension. New companies are
obliged to establish a DB or DC retirement pension
plan within a year after formation of business.
12,000,000
Over
38
90,100,000
• Employers are required to withhold payroll taxes
monthly, finalize their tax liability, and issue a
tax settlement certificate at the end of the tax
period with the tax year-end 31 December and
tax return due on 31 May of the following year.
• Child benefit allowances and Meal allowances are
commonly referred to as non-taxable income.
Non-taxable allowances must be paid as such as
well as being shown separately. Allowances that
are paid to compensate expense incurred such
as car allowance may be excluded as well.
• It is required for employers, by “Labour
Standard Act”, to give 30 days advance
notice of dismissal to any employee.
Accolade
OCTOBER 2013
11