Use
The income tax calculation method refers to the ways of calculating taxable income and taxable periods.
According to the income tax law, companies must calculate tax at least once a month in the last payroll and report the total monthly tax to the tax office by the 10th of the following month. However, in most cases companies calculate tax during each payroll run (both during the regular payroll and periodic/non-periodic bonus runs). Companies can select the tax calculation method for each payroll run to meet their own tax calculation policies as long as this payroll is not the last one in the month.
Prerequisites
In Customizing for Payroll Korea under Tax ® Define Tax Calculation Method, you must have defined the withholding tax calculation method used in payroll accounting. If you do not maintain this step, the SAP System performs the default tax calculation for each payroll category to comply with the legal requirements.
Features
You can choose from the following income tax calculation methods:
The system does not calculate and deduct the income tax. It pays the full amount.
The SAP System calculates the taxable amount for the current payroll run only. This method is applied for the monthly payroll run if it is the sole payment in a particular period.
The SAP System calculates tax for all the payroll runs (both regular payroll and bonus) that occurred both in the current taxation period and in the past taxation periods. This method is applied where bonuses were paid in a particular period.
See also:
Setting the Tax Calculation Method