Paying withheld tax twice a year defers it — six months land on one day
With approval, tax withheld over the first half is paid on 10 July in a single payment. January's is pushed back 150 days, but six months of it arrives together. Not a won of the tax is reduced.
Conditions used in the video
- Who qualifies
- 20 or fewer staff on average last year
- Excluded
- finance and insurance
- Religious organisations
- no headcount test
- Application
- the month before the half-year covered
- Payment
- the 10th of the month after that half ends
Results
- January's tax is deferred by
- 150 days
- Months landing on one day
- six
- First half is paid on
- 10 July
- Second half is paid on
- 10 January
- Tax saved
- none
At a glance
Tax withheld across the first half, all paid on 10 July.
- Withheld in January150 days
- Withheld in February122 days
- Withheld in March91 days
- Withheld in April61 days
- Withheld in May30 days
- Withheld in Junethe same
it was already due on 10 July
Why it works this way
Income tax withheld from wages is normally paid by the 10th of the month after it was withheld, which makes twelve payments a year.
A small enough employer can pay it twice a year instead. Approval is required.
소득세법 시행령 제186조제1항.
- 20 or fewer staff last yearfinance and insurance are excluded
- Or a religious organisationno headcount test
- Andapproval from the district tax office
🔴 The headcount is not today's but the **average** of the figures at each month end from January to December of the previous year. Staff up for a busy season and you can be under 20 today and over it on average.
There is a window to apply: from the 1st to the last day of the month before the half-year you want covered. December for the first half, June for the second.
The decision arrives by the last day of the month following the half-year your application falls in. If nothing arrives by then it is treated as approved, so you do not have to keep paying monthly for want of a letter.
So far it sounds like nothing but upside. The nature of the scheme is worth being precise about.
The amount is unchanged.
- Withheld in Januarydue 10 February → 10 July
- Withheld in Junealready due 10 July
- Resultsix months landing on 10 July
The early months move a long way and the late ones barely move. The benefit spreads across the half; the burden lands on one date.
January's tax is pushed back 150 days. Having that money for five months genuinely helps a business that is tight on cash.
The problem is 10 July. Six months arrive as one lump. Withheld tax is the employees' tax, held on their behalf. It is not the company's money. Spend it on running the business in the meantime and there is nothing to pay with on the day.
국세기본법 제47조의5.
- Charged immediately3% of the unpaid tax
- Per day22/100,000 of it
- Togethercapped at 10% of the unpaid tax
Concentrating a large sum on one date raises this risk. Applying for the scheme really means also setting that money aside.
Some tax stays outside it. Withholding on bonuses, dividends and other income disposed of under the Corporate Tax Act is excluded and remains due on the 10th of the following month even with approval.
Local income tax follows along. Where the income tax is paid semiannually, the individual local income tax withheld with it can be paid by the same date, but it goes to the local authority for your tax place as at the last day of that half's final month.
Approval carries on year to year. You return to monthly payment only from the point last year's average passes 20.
So: this scheme does not cut the tax, it gathers six months of it onto one day. Weigh whether the cash flow helps, and whether you can keep that money intact until the date.
The legal basis
Drawn from government announcements and the statutes themselves as primary sources, covering only the relevant part.
소득세법 제128조제1항·제2항 (payment deadlines)
In force in force
A withholding agent must pay the income tax withheld by the 10th of the month following the month of withholding. However, a withholding agent prescribed by Presidential Decree in light of the number of regular employees and the type of business may pay withheld tax, other than the amounts listed in each subparagraph, by the 10th of the month following the last month of the half-year in which it was withheld.
What this means
The rule is the 10th of the following month; with approval it becomes 10 July for the first half and 10 January for the second.
소득세법 시행령 제186조제1항·제2항 (who qualifies, and how the headcount is counted)
In force in force
It means a withholding agent whose regular employees in the previous year numbered 20 or fewer (excluding those carrying on finance or insurance business), or a religious organisation, who has obtained approval from the district tax office or been designated as prescribed by the Commissioner of the National Tax Service. The number of regular employees for the previous year is the average of the numbers as at the last day of each month from January to December of that year.
What this means
🔴 Not today's headcount but the average of twelve month-end figures from last year. Religious organisations are not tested on headcount.
같은 조 제3항·제4항 (applying and being notified)
In force in force
An applicant must apply from the 1st to the last day of the month preceding the half-year for which semiannual payment is sought. The district tax office decides in light of the applicant's filing and payment record and must notify by the last day of the month following the half-year in which the application falls; where no notice is received within that period, approval is deemed given.
What this means
December for the first half, June for the second. No letter by the deadline means approved.
국세기본법 제47조의5제1항 (late payment penalty)
In force in force
Where tax required to be collected and paid is not paid or is underpaid by the statutory deadline, the penalty is 3 hundredths of the unpaid amount plus that amount multiplied by the period from the day after the statutory deadline and by the interest rate prescribed by Presidential Decree, the two together capped at 10 hundredths of the unpaid amount.
What this means
3% plus 22/100,000 per day, capped at 10% together. Paying a large sum on a single date raises the exposure.
Run it on your own numbers
The calculator opens with these conditions already filled in. Change the figures and your own case comes straight out.
Open the Semiannual Withholding Tax Payment
Frequently asked
Is 20 or fewer staff right now enough?
No. 시행령 제186조제2항 takes the average of the headcount as at the last day of each month from January to December of the previous year. What matters is last year's twelve-month average, not today's figure. A business that staffs up for a season can be under the limit today and over it on average.
Does the tax go down?
No. Only the timing moves. January's tax shifts from 10 February to 10 July (150 days), but six months of it arrives on that one day.
When do I apply?
From the 1st to the last day of the month before the half-year you want covered: 1 to 31 December for the first half (tax withheld January to June), 1 to 30 June for the second (July to December).
What if no decision arrives?
If nothing comes by the last day of the month following the half-year your application falls in, approval is deemed given (시행령 제186조제4항). That means 31 July for a June application, 31 January for a December one.
Is local income tax deferred too?
Yes. The proviso to 지방세법 제103조의13제2항 lets individual local income tax withheld alongside be paid by the same date. It goes to the local authority for your tax place as at the last day of that half's final month.
Is any withheld tax left out?
Yes. Withholding on bonuses, dividends and other income disposed of under 법인세법 제67조, and on dividend income disposed of under the international tax adjustment law, stays due on the 10th of the following month even with approval.
Results are estimates based on the inputs and on the rules as at the stated date. They may differ from a lender's actual assessment, and the rules change often. Take professional advice before any decision that matters.