Samsung Electronics labor and management on the 20th reached a tentative agreement on a compensation plan to pay 10.5% of business performance as a performance bonus in company stock. If the agreement passes a union member vote, estimates say employees in the semiconductor (DS) institutional sector could receive up to about 600 million won in performance bonuses this year. According to the National Tax Service, a Samsung Electronics employee with an annual salary of 100 million won who receives a 600 million won performance bonus is expected to take home in the 400 million won range after paying more than 200 million won in taxes.
On the 21st, the National Tax Service released the results of a simulation calculating earned income tax when a Samsung Electronics employee with an annual salary of 100 million won receives a 600 million won performance bonus. The National Tax Service assumed the employee is part of a three-person family with one spouse and one child age 8 or older. According to the simulation, the employee must pay a total of 247.19 million won in earned income tax. In that case, the take-home pay is estimated to be in the 450 million won range.
Samsung Electronics said it will pay the performance bonus in company stock. In this case, earned income tax is levied on the total salary of 700 million won, which combines the annual salary and the stock payment. From the 700 million won, the earned income deduction (20 million won), which subtracts minimum necessary expenses, and the personal exemption (4.5 million won), which applies 1.5 million won per household member, are excluded to determine the taxable base. The taxable base is 675.5 million won, which falls into the bracket where the 42% earned income tax rate applies.
The tax calculated this way is 247.19 million won. Of this, the company withholds about 240 million won, and the worker is expected to pay about 7.19 million won directly.