Issuance of year-end settlement withholding tax receipts for those who leave mid-term
If an employee leaves the company in the middle of not completing the contracted working period, it is called a mid-term resignation. Year-end settlement means that the wage and salary income tax withheld for one year is settled at the end of the year, and if you paid more than your actual income, you will be refunded, and if you paid less, you will collect more. For year-end tax settlement, employees who worked until December 31st calculate tax on their income for one year and settle them in February. So, how should the mid-term retirees do the year-end tax settlement? The first year-end settlement is carried out when the employee pays wages in the month of retirement, and after that, it depends on whether or not he or she has changed jobs at the time of year-end settlement. Let’s find out how the year-end tax settlement works and look at withholding tax.
Year-end tax settlement for mid-term retirees
Year-end settlement method for mid-term retirees 중도퇴사자 연말정산
Issuance of withholding tax receipt
Withholding tax is when an employer pays workers a certain percentage of tax in advance instead of the state, and the document proving this is called a withholding tax receipt. Depending on the income bracket of the worker, it is withheld at a rate of 6-38%. At this time, those who leave mid-term need a receipt for wage and salary withholding tax in situations such as year-end settlement, turnover, or winning subscription. You can obtain the wage and salary income withholding tax receipt at the time of leaving the company in advance or submit it by requesting it to the previous place of employment. However, if a lot of time has passed since leaving the company, or if it is difficult to contact the previous place of work, you can inquire at Hometax. If the withholding tax has been properly carried out at all workplaces, after March, the withholding tax receipt can be viewed and issued in the Hometax Year-end Settlement Simplification Service. Alternatively, you can obtain a withholding tax receipt at the local community center or unmanned issuance machine, not online.
In case of mid-term resignation 좋은뉴스
Year-end tax settlement is made at the place of employment at the time when a mid-term retiree leaves the company. In this case, the company cannot check the exact expenses of workers, so only basic deductions are made. Therefore, the remaining items such as credit card usage, insurance premiums, and medical expenses that are not deducted are processed after leaving the company mid-term. In some cases, your current place of employment will automatically settle the year-end tax settlement, but you may also request a receipt for wage and salary withholding tax. Then, you can submit the wage and salary income withholding tax receipt you received while leaving your previous job along with the income and tax credit report to the company you currently work for. When filling out the income and tax deduction report, only the period worked at the current place of employment should be extracted. This is because expenses incurred during the blank period from the time you leave the company until you move out are not deductible, and can only be deducted during the period of employment. In other words, if there is a gap of two months after leaving the company, expenses incurred during that period are excluded from year-end tax settlement. If you do not receive a withholding tax receipt, you can also do year-end tax settlement only for the period you worked at your current place of employment. After March, you can obtain a withholding tax receipt from Hometax or the relevant community center and file a global income tax return in May.
If you are preparing to move
If a person who quits midway is preparing to leave, not re-employed at the time of year-end tax settlement, he/she must report the items that were not deducted at the time of resignation. In this case, you can file your global income tax directly through Hometax of the National Tax Service. Receive wage and salary income withholding tax receipts from the previous workplace where you left mid-term, settle and report the year-end tax simplification service data. In this case, basic deduction items such as insurance premiums, medical expenses, education expenses, housing funds, and credit card usage can be deducted. However, deductions cannot be made during the period from mid-term retirement to before job change. However, there are some items that are deducted regardless of the period of employment. Pension insurance premium deduction, personal pension savings deduction, pension savings account tax deduction, investment in an investment association, donation deduction, monthly rent deduction, etc. can be deducted without changing jobs. If you receive a tax refund through the global income tax return, you will be able to receive the refund in July. If you do not properly report deduction items by the deadline for filing global income tax, you can file a claim through ‘Correction Request’ at the competent tax office or Hometax.