Retirement Pension-related Taxes

Change to calculation of retirement income tax

퇴직소득세(개정방식)
Category	Calculation Formula
Retirement income①	Amount of lump-sum retirement benefits received
Deduction based on the length of service②	[Ref.] Deduction based on length of service Length of service Deducted amount 5 yrs or less 1mil x Length of service 6 ~ 10 yrs 5mil + 2mil x (Length of service: 5 yrs) More than 11 ~ 20 yrs 15mil + 2.5mil x (Length of service: 10 yrs) More than 20 yrs 40mil + 3mil x (Length of service: 20 yrs)
③＝①－②	Retirement income – Deduction based on the length of service
Converted benefits④	③ / Length of service x 12
Differential deduction⑤	Deduction depending on amount of converted benefits: 100~35%
Converted tax base⑥(④－⑤)	Converted benefits - Differential deduction
Converted tax amount⑦	Converted tax base x 6%~45%
Calculated tax amount⑧	⑦ x length of service / 12

Application of Revised Retirement Income Tax in Phases

구체적 적용방법(2016년 퇴직부터 5년간 단계적으로 세부담이 증가되도록 조정)

퇴직소득세(개정방식)
Year of Retirement	Retirement Income Tax
2016	Retirement income tax under the as-is rule x 80% + Retirement income tax under the revised rule x 20%
2017	Retirement income tax under the as-is rule x 60% + Retirement income tax under the revised rule x 40%
2018	Retirement income tax under the as-is rule x 40% + Retirement income tax under the revised rule x 60%
2019	Retirement income tax under the as-is rule x 20% + Retirement income tax under the revised rule x 80%
2020 ~	Retirement income tax under the revised rule x 100%

Ex) You may calculate retirement income tax using the simulation provided by National Tax Office