1.Check the amounts of '차감징수세액(numbers 77)
After the year-end tax settlement, you will receive a document called the Salary & Wage Income Withholding Receipt (연말정산 근로소득원천징수영수증). In this document, if you see the red box, (73) 결정세액 represents the finalized tax amount. Additionally, (75) 기납부세액 주(현) 근무지 indicates the taxes deducted from your monthly salary each month.
(77) 차감징수세액 represents the taxes to be refunded or paid. It is calculated by deducting (73) from (75). This amount, (77) 차감징수세액, will be included in your February salary.
For example, if your normal net salary is 3,000,000 KRW and the refund amount is 1,000,000 KRW, you will receive 4,000,000 KRW as your February salary.
2.If you have amounts to pay, you can pay it installment
While receiving a tax refund through the year-end tax settlement feels good, it can be frustrating to find yourself owing more taxes, usually due to insufficient deduction items or prepaid taxes.
For example, if your normal salary is 3,000,000 KRW and the tax payable by year-end settlement is 1,000,000 KRW, your February salary would be 2,000,000 KRW.
In such cases, you have the option to either deduct the entire amount from your February salary or spread the payment over three months (e.g., Feb 333,333 / Mar 333,333 / Apr 333,334). To arrange for installment payments, you should request this from your company.
3.Company should pay the refund amounts to employees
The company should pay the refund amount to employees in addition to each employee's salary.
Than, How can the company obtain the money?
Typically, the paid amount is deducted from the withholding tax amounts that the company will pay in the future. Consequently, companies usually don't need to pay withholding taxes after the year-end tax settlement.
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