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fezmond
Joined: 27 Oct 2008
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 Posted: Tue Feb 21, 2012 3:24 am Post subject: tax on severance |
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hey
finally defeated my boss on her refusal to pay my severance for 2 years.
including my final pay check next week, i should be getting 6.9m.
is the whole sum tax deductible or would i be charged tax for each 'month' so to speak?
i know they've been under-reporting me as 700k a month so my tax is lower. i don't want a hot of 500k in income tax because i've jumped up a few bands due to a lump sum payment. |
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Wildbore
Joined: 17 Jun 2009
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| Posted: Tue Feb 21, 2012 4:21 am Post subject: Re: tax on severance |
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| fezmond wrote: |
hey
finally defeated my boss on her refusal to pay my severance for 2 years.
including my final pay check next week, i should be getting 6.9m.
is the whole sum tax deductible or would i be charged tax for each 'month' so to speak?
i know they've been under-reporting me as 700k a month so my tax is lower. i don't want a hot of 500k in income tax because i've jumped up a few bands due to a lump sum payment. |
Because it is a lump-sum, your tax will be higher. There is no way to avoid this.
According to the following laws, your employer must also provide you with a statement of deductions for all taxes taken. Obviously this is to avoid the all to common Korean tradition of embezzlement.
| Quote: |
THE ENFORCEMENT DECREE OF THE NATIONAL PENSION ACT
(2) When contribution is deducted from monthly wages under Paragraph (1), the employer shall prepare the statement of deduction and present it to workplace based participants. (Amended by Law No. 4909, Jan. 5, 1995; Law No. 5623, Dec. 31, 1998)
NATIONAL HEALTH INSURANCE ACT
Article 68 (Responsibility for Payment of Insurance Premium)
�����..
(3) An employer shall pay the portion of the insurance premium for the month to be borne by an employment provided policyholder by deducting it from his remunerations. In such cases, the employer shall notify the amount of deduction to the employment provided policyholder.
INCOME TAX ACT
Article 143 (Delivery of Receipt of Withholding from Earned Income)
Any withholding agent, who pays any earned income, shall deliver the withholding receipt specifying the earned income and other necessary matters, to the person receiving it , no later than the end of February of the year following the corresponding year, under the conditions as prescribed by the Presidential Decree: Provided, that with respect to a person who has retired during the corresponding year, it shall be delivered no later than the end of the month following the month to which the payment date of the wage for the month he retires belongs, and in the case of any earned income of a daily-paid worker under the provisions of Article164(1), it shall be delivered no later than the end of the month following the last month of the quarter to which the payment date there of belongs (the end of February of next year for the earned income paid in the 4th quarter).<Amended by Act No.8144, Dec. 30, 2006> |
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fezmond
Joined: 27 Oct 2008
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| Posted: Tue Feb 21, 2012 5:28 am Post subject: Re: tax on severance |
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| Wildbore wrote: |
| fezmond wrote: |
hey
finally defeated my boss on her refusal to pay my severance for 2 years.
including my final pay check next week, i should be getting 6.9m.
is the whole sum tax deductible or would i be charged tax for each 'month' so to speak?
i know they've been under-reporting me as 700k a month so my tax is lower. i don't want a hot of 500k in income tax because i've jumped up a few bands due to a lump sum payment. |
Because it is a lump-sum, your tax will be higher. There is no way to avoid this.
According to the following laws, your employer must also provide you with a statement of deductions for all taxes taken. Obviously this is to avoid the all to common Korean tradition of embezzlement.
| Quote: |
THE ENFORCEMENT DECREE OF THE NATIONAL PENSION ACT
(2) When contribution is deducted from monthly wages under Paragraph (1), the employer shall prepare the statement of deduction and present it to workplace based participants. (Amended by Law No. 4909, Jan. 5, 1995; Law No. 5623, Dec. 31, 1998)
NATIONAL HEALTH INSURANCE ACT
Article 68 (Responsibility for Payment of Insurance Premium)
�����..
(3) An employer shall pay the portion of the insurance premium for the month to be borne by an employment provided policyholder by deducting it from his remunerations. In such cases, the employer shall notify the amount of deduction to the employment provided policyholder.
INCOME TAX ACT
Article 143 (Delivery of Receipt of Withholding from Earned Income)
Any withholding agent, who pays any earned income, shall deliver the withholding receipt specifying the earned income and other necessary matters, to the person receiving it , no later than the end of February of the year following the corresponding year, under the conditions as prescribed by the Presidential Decree: Provided, that with respect to a person who has retired during the corresponding year, it shall be delivered no later than the end of the month following the month to which the payment date of the wage for the month he retires belongs, and in the case of any earned income of a daily-paid worker under the provisions of Article164(1), it shall be delivered no later than the end of the month following the last month of the quarter to which the payment date there of belongs (the end of February of next year for the earned income paid in the 4th quarter).<Amended by Act No.8144, Dec. 30, 2006> |
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thanks for the bad news 
the saving grace is that my boss is so dumb that she will screw this up somehow and i'll get something cheaper. either way, less severance is better than no severance.
cheers for the reply |
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fezmond
Joined: 27 Oct 2008
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| Posted: Wed Feb 22, 2012 1:31 am Post subject: |
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yep my boss is dumb.
they're only taxing me 155,000 rather than the 500,000 i was expecting and she's paying me more than my actual salary should be. happy days. |
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