{"id":92,"date":"2026-08-20T05:08:36","date_gmt":"2026-08-20T05:08:36","guid":{"rendered":"https:\/\/wealth-lab1.com\/?p=92"},"modified":"2026-08-20T05:08:38","modified_gmt":"2026-08-20T05:08:38","slug":"%ec%97%b0%eb%a7%90%ec%a0%95%ec%82%b0%ec%9d%b4%eb%9e%80-%ed%99%98%ea%b8%89-%ec%b6%94%ea%b0%80-%eb%82%a9%eb%b6%80-%ea%b3%84%ec%82%b0-%ec%88%9c%ec%84%9c","status":"publish","type":"post","link":"https:\/\/wealth-lab1.com\/en\/%ec%97%b0%eb%a7%90%ec%a0%95%ec%82%b0%ec%9d%b4%eb%9e%80-%ed%99%98%ea%b8%89-%ec%b6%94%ea%b0%80-%eb%82%a9%eb%b6%80-%ea%b3%84%ec%82%b0-%ec%88%9c%ec%84%9c\/","title":{"rendered":"What Is Year-End Tax Settlement? Why You May Receive a Refund or Owe Additional Tax"},"content":{"rendered":"<p class=\"wp-block-paragraph\">At the beginning of each year, employees often check the amount of their year-end tax refund first. However, a year-end tax refund is not a bonus from an employer or the government. It is the result of comparing the tax withheld from your salary during the year with the tax you actually owe, after which the difference is either refunded or collected as an additional payment.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To understand year-end tax settlement, you first need to see <a href=\"https:\/\/wealth-lab1.com\/en\/%ec%9b%90%ec%b2%9c%ec%a7%95%ec%88%98%eb%9e%80-%ec%9b%94%ea%b8%89-%ec%84%b8%ea%b8%88-%eb%af%b8%eb%a6%ac-%ea%b3%b5%ec%a0%9c%eb%90%98%eb%8a%94-%ec%9d%b4%ec%9c%a0\/\">how income tax is withheld from your salary in advance<\/a>. The income tax withheld each month is prepaid based on factors such as that month\u2019s salary and the simplified withholding tax table, so it may not exactly match the final tax calculated using your full annual income and deductions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What Is Year-End Tax Settlement?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Year-end tax settlement is the process of determining the final income tax an employee owes on employment income for the tax year and comparing it with the tax already withheld.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">As the withholding agent, the employer deducts income tax in advance when paying an employee\u2019s salary. The final tax liability is later calculated using the employee\u2019s annual employment income and the income deductions and tax credits claimed by the employee.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For employees who remain with the same employer, the result is generally reflected in the salary paid for February of the following year. For employees who leave during the year, the settlement is generally completed when the salary for the month of departure is paid.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Why Do Refunds and Additional Payments Occur?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The key to year-end tax settlement is comparing your final tax liability with the tax you have already paid.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Final tax liability: The income tax ultimately owed for the year after applying eligible deductions, tax reductions, and tax credits<\/li>\n\n\n\n<li>Tax already paid: The income tax already withheld from your salary and paid during the year<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">If the tax already paid is greater than your final tax liability, the difference is refunded. If your final tax liability is greater than the tax already paid, you must pay the shortfall.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A large refund does not necessarily mean that you saved more tax. Your actual tax liability may have decreased, but the refund may also be large simply because more tax was withheld each month than you ultimately owed. When reviewing the result, check both the final tax liability and the tax already paid instead of looking only at the refund.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Why Does Monthly Withholding Differ from the Final Tax Liability?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The income tax withheld from your salary each month is a prepaid tax calculated using factors such as your monthly salary and the simplified withholding tax table. At this stage, your annual gross pay has not yet been finalized, and expenses such as medical costs, education expenses, donations, and housing-related deductions have not been fully reflected.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Year-end tax settlement recalculates the tax you actually owe by considering your salary and bonuses for the entire year, non-taxable income, dependents, income deductions, and tax credits. A difference may arise if your salary changed during the year, you received a bonus, or your dependents or deductible expenses changed.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Even if you qualify for many deductions, your refund may not be large if relatively little tax was withheld. Conversely, you may receive a refund even with fewer deductions if more tax was withheld each month than you ultimately owed. This is why the refund alone does not show the full effect of your deductions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Seven Steps for Calculating Year-End Tax<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The National Tax Service explains the year-end tax calculation process in the following seven steps.<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Calculate gross pay.<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">Gross pay is calculated by subtracting non-taxable income from annual employment income.<\/p>\n\n\n\n<ol start=\"2\" class=\"wp-block-list\">\n<li>Calculate earned income.<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">Earned income is calculated by subtracting the earned income deduction from gross pay.<\/p>\n\n\n\n<ol start=\"3\" class=\"wp-block-list\">\n<li>Calculate adjusted income.<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">Personal deductions, pension insurance premium deductions, and special income deductions are subtracted from earned income.<\/p>\n\n\n\n<ol start=\"4\" class=\"wp-block-list\">\n<li>Calculate taxable income.<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">Taxable income is calculated by subtracting other income deductions from adjusted income and adding any amount exceeding the aggregate deduction limit.<\/p>\n\n\n\n<ol start=\"5\" class=\"wp-block-list\">\n<li>Calculate the tax before credits.<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">Calculate the tax before credits by applying the basic tax rate to taxable income.<\/p>\n\n\n\n<ol start=\"6\" class=\"wp-block-list\">\n<li>Calculate the final tax liability.<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">Tax reductions and tax credits are subtracted from the tax before credits to determine the final tax liability.<\/p>\n\n\n\n<ol start=\"7\" class=\"wp-block-list\">\n<li>Calculate the additional tax payable or refundable tax.<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">The additional tax payable or refundable tax is calculated by subtracting tax already paid and any tax covered by special payment provisions from the final tax liability.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Where Are Income Deductions and Tax Credits Applied?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Income deductions and tax credits are applied at different stages of the calculation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Income deductions reduce the amount of taxable income before tax rates are applied. These include personal deductions, special income deductions, and other income deductions.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Tax credits directly reduce the tax calculated after applying the tax rates to taxable income. Because income deductions and tax credits are applied at different stages and have different effects, they should not be treated as the same concept.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Eligibility requirements and deduction limits may vary according to income level, family circumstances, types of expenses, and the tax law applicable to the relevant tax year.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Is Everything Shown in the Simplified Tax Data Automatically Deductible?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">An expense is not automatically deductible simply because it appears in the simplified year-end tax settlement service.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The simplified service displays data submitted by receipt-issuing institutions. Employees must confirm that they and their dependents meet the requirements for each deduction. If any information is inaccurate or supporting documents are missing from the service, they should contact the issuing institution or their employer.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Requirements concerning a dependent\u2019s income, housing-related deductions, and whether an expense was incurred during the period of employment may differ by deduction. Claiming a deduction merely because the data appears in the service may result in an excessive deduction.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">If You Started a New Job or Changed Employers During the Year<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">An employee who changed employers during the same tax year must combine the employment income received from the previous employer with the income received from the new employer.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">By submitting the employment income withholding receipt from the previous employer to the current employer, the employee can have the income and withheld tax from both workplaces included in the settlement. If any employment income was not combined, the employee may need to file a comprehensive income tax return in May of the following year, depending on the individual circumstances.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">A Simple Example of a Year-End Tax Settlement Result<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The following simplified example uses income tax only to explain how the calculation works.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Income tax paid in advance during the year: KRW 1.2 million<\/li>\n\n\n\n<li>Final tax liability after deductions and credits: KRW 1 million<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Because the tax already paid exceeds the final tax liability by KRW 200,000, the employee receives a refund of KRW 200,000.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Conversely, if the income tax paid in advance was KRW 1.2 million and the final tax liability was KRW 1.45 million, the employee must pay the additional KRW 250,000.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Even with the same income, the settlement result may differ depending on dependents, eligible expenses, whether the employee started a job during the year, non-taxable income, and the amount of tax already paid.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What to Check Before Year-End Tax Settlement<\/h2>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Check your annual gross pay and non-taxable income.<\/li>\n\n\n\n<li>Check whether your dependents meet the basic deduction requirements and whether any deduction has been claimed more than once.<\/li>\n\n\n\n<li>Review the supporting documents for insurance premiums, medical expenses, education expenses, donations, and housing-related deductions.<\/li>\n\n\n\n<li>Confirm that the information in the simplified tax service actually meets the deduction requirements.<\/li>\n\n\n\n<li>If you changed employers, prepare the employment income withholding receipt from your previous employer.<\/li>\n\n\n\n<li>Check your final tax liability, tax already paid, and the final amount payable or refundable.<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">Before completing your year-end tax settlement, review <a href=\"https:\/\/wealth-lab1.com\/en\/%ea%b8%89%ec%97%ac%eb%aa%85%ec%84%b8%ec%84%9c-%eb%b3%b4%eb%8a%94-%eb%b2%95-%ec%84%b8%ea%b8%88-%ea%b3%b5%ec%a0%9c%ec%95%a1-%ed%99%95%ec%9d%b8-7%ea%b0%80%ec%a7%80\/\">the seven items on a payslip that show taxes and deductions<\/a>to confirm how much income tax was withheld each month.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Common Misunderstandings<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>A tax refund is extra money provided by the government.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">A tax refund is generally the difference returned to you when the tax already paid is greater than your final tax liability.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Spending more always results in a larger refund.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Not every expense is deductible, and eligibility requirements and deduction limits apply. Increasing unnecessary spending solely to receive a larger refund is not advisable.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>There is no need to review the information provided by the simplified tax service.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Employees must still confirm that the information shown in the service meets the applicable deduction requirements.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Income from a previous employer can be excluded.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Employment income received from multiple employers during the same tax year must be combined according to the required procedures.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">ConclusionConclusion<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Year-end tax settlement is not an event designed to provide a refund. It is the process of accurately determining the employment income tax owed for the year.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If the tax already paid exceeds your final tax liability, you receive a refund. If the tax already paid is insufficient, you must make an additional payment. To understand the result properly, do not look only at the refund. Check how gross pay, taxable income, final tax liability, and tax already paid were calculated.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Deduction requirements and limits may vary according to the applicable tax year and individual circumstances. Before completing your settlement, check the latest guidance from the National Tax Service and the year-end tax information provided by your employer.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This article provides general financial and tax information and is not a substitute for personalized tax advice.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">References<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">National Tax Service, Year-End Tax Settlement Calculation Method for Employment Income<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">National Tax Service, Comprehensive Guide to Year-End Tax Settlement<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Korean Law Information Center, Article 137 of the Income Tax Act<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Korean Law Information Center, Article 138 of the Income Tax Act<\/p>","protected":false},"excerpt":{"rendered":"<p>\ub9e4\ub144 \ucd08\uac00 \ub418\uba74 \uc9c1\uc7a5\uc778\ub4e4\uc740 \uc5f0\ub9d0\uc815\uc0b0 \ud658\uae09\uc561\ubd80\ud130 \ud655\uc778\ud558\uace4 \ud569\ub2c8\ub2e4. \uadf8\ub7ec\ub098 \uc5f0\ub9d0\uc815\uc0b0 \ud658\uae09\uae08\uc740 \ud68c\uc0ac\ub098 \uad6d\uac00\uac00 \uc8fc\ub294 \ubcf4\ub108\uc2a4\uac00 \uc544\ub2d9\ub2c8\ub2e4. \ud55c \ud574 \ub3d9\uc548 \uc6d4\uae09\uc5d0\uc11c [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":94,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center 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