Follow the path from gross employment pay and deductions to final tax, prepaid withholding and a possible refund or additional payment.
The same final tax can give a refund or a bill
With fictional final income tax of KRW 3.74 million, KRW 4.2 million prepaid gives a KRW 460,000 refund; KRW 3.6 million prepaid gives KRW 140,000 payable. The final annual tax is identical. This example excludes local income tax and special payment arrangements.
Match the year, column and tax
Read income tax separately from local income tax. Check the income year, previous and current employers, and the payslip where settlement is reflected. Do not count previous-employer tax twice. The stock-option tool estimates a tax increment on assumed tax bases; it does not calculate the full year-end refund.
The order of calculation
Gross employment pay excludes qualifying tax-free income. Subtract the employment income deduction, then applicable income deductions, to reach the taxable income base. Apply progressive rates for calculated tax, then subtract tax reductions and credits to reach final tax.
Key terms
The taxable base is the amount subject to tax rates. Calculated tax comes from applying those rates. Final tax is what remains after credits and reductions. Prepaid tax is the income tax already withheld from monthly pay.
Refund or additional tax
Final tax − prepaid tax is the balance. A positive amount is generally additional tax; a negative amount is a refund of tax already paid. A large refund does not mean the annual tax was low.
Example
With a KRW 40 million taxable base, the example calculated tax is KRW 4.74 million. If credits are KRW 1 million, final tax is KRW 3.74 million. If KRW 4.2 million was withheld, the difference is a KRW 460,000 refund, before any separate local-tax reconciliation.