1. Withholding tax on salary payments


When a company pays salary of employee, it is required to withhold income tax and pay it to the jurisdictional Tax Office monthly within 10 days of the end of month in which salary was paid.




Due date

Income tax withheld between January and June

July 10

Income tax withheld between July and December

January 10 of the following year



2. Social Insurance

Company, in principal, is required to pay half of premiums for “Employees’ Health Insurance (EHI)” and “Employees’ Pension Insurance (EPI)” with other half paid by Employees.

As of September, 2014, the premium rate for EHI is 17.474% (half paid by companies at the rate of 8.737%), while the premium rate for EPI is 9.97% (half paid by companies at the rate of 4.985%). Premium rates are often raised repeatedly according to the Authority’s decision.

3. The year-end adjustment


The year-end adjustment is the process, whereby the salary payer settles the discrepancy for each person between the total amount of income tax withheld from each salary payment made during the year and the tax amount to be paid for total salary paid during the year, at the time of the last salary payment in the year. For most people receiving a salary, therefore, the year-end adjustment plays an important role as a substitute for filing a final return.