---
title: "Chuseok Bonus Tax and Social Insurance Deductions"
locale: en
category: how_to
category_name: "How-to"
translation_status: reviewed
license: cc_by
author: "OnBinder Editorial Team"
source_url: https://onbinder.com/en/articles/chuseok-bonus-tax-insurance-calculation
published_at: 2026-09-05T18:01:40+09:00
---

# Chuseok Bonus Tax and Social Insurance Deductions

> If a Chuseok bonus qualifies as wages, income tax and local income tax are withheld. Because each of the four major social insurance programs reflects the bonus at a different time, check both the pay statement for the payment month and subsequent adjustment details.

## Key Points

- Prepare the pay statement, the period covered by the bonus, and dependent information.
- Separate taxable earned income from recognized non-taxable amounts within the bonus.
- Check the income tax and local income tax using the applicable bonus withholding method.
- Check when the National Pension, health insurance, and employment insurance each reflect the bonus.
- Compare the calculation results with the pay statement for the payment month and the year-end tax settlement details.

If a Chuseok bonus qualifies as wages, it is subject to income tax and local income tax withholding. Employment insurance is generally reflected in remuneration for the month of payment. National pension and health insurance may be reconciled after standard monthly income and remuneration are reported, so first check the pay statement and the payment coverage period.

Based on public inquiry cases released in October 2025

## Calculation Steps to Follow Now

First, check the taxable amount of the bonus and the payment coverage period. Simply applying a fixed tax rate to the monthly salary will not produce an accurate result. If the company has not yet closed payroll, you can ask the person in charge for the basis of the calculation.

1. Prepare the bonus payment notice and employment contract.
2. Check the regular salary for the same period as the payment coverage period.
3. Verify that the numbers of dependents and children are correct.
4. Separate the taxable bonus from recognized non-taxable amounts.
5. Check the income tax withheld from the bonus and the local income tax.
6. Determine whether each type of insurance is deducted in the month of payment.
7. Compare the payments and deductions on the pay statement.

Any separate application deadline for employees should be checked in the relevant regulations or with the department responsible at the company. However, it is faster to report errors before the company closes payroll. Unreflected amounts may be adjusted through year-end tax settlement or insurance premium reconciliation.

## Taxability by Condition

The purpose of the payment and whether it constitutes wages determine taxability more than its name. The same standards apply to cash and bank transfers. Labeling a payment as “transportation expenses” does not automatically make it non-taxable.

| Payment type | General treatment | Documents to check |
|---|---|---|
| Regular holiday bonus | Included in taxable employment income | Employment contract, rules of employment |
| One-time performance bonus | Included in taxable employment income | Performance bonus payment criteria |
| Cash or bank transfer bonus | Determined regardless of payment method | Pay statement, transfer records |
| Fixed payment labeled as transportation expenses | Check whether non-taxation requirements are met | Payment policy, commuting arrangement |
| Reimbursement of actual business expenses | Check documentation and whether it reimburses actual expenses | Receipts, business trip expense statement |
| Gift certificates or in-kind payments | Check whether the economic benefit constitutes employment income | Payment details, assessed amount |

Amounts reimbursing actual expenses may be distinguished from wages. In contrast, a lump-sum payment made in return for work is likely to be employment income. Non-taxability cannot be determined solely by the name used by the company.

## Structure of Income Tax Withholding on Bonuses

Income tax on a bonus is calculated together with salary for the payment coverage period. The National Tax Service’s simplified employment income tax withholding table forms the basis of the calculation. Dependent information also affects the amount of tax withheld.

If there is a payment coverage period, use the following structure.

- Add the bonus to the regular salary for the same period.
- Apply the simplified tax table to the monthly average amount.
- Calculate the difference from the tax applied to the regular salary alone.
- Calculate that difference based on the payment coverage period.
- Adjust for tax on bonuses already paid during the same period.

If there is no payment coverage period, separate period rules apply. Bonuses paid previously may also affect the calculation. Therefore, a simple calculator that only accepts the bonus amount may produce a different result.

The local income tax rate should be checked in the latest Wetax guidance. If there is no income tax, whether local income tax is imposed should be checked in the latest Wetax guidance. The final tax is recalculated based on annual employment income during year-end tax settlement.

The precise rules can be found in the Enforcement Decree of the Income Tax Act on the Korean Law Information Center. For withholding on bonuses and similar payments, check the relevant withholding provisions of the Enforcement Decree. The latest simplified tax table should be checked through the National Tax Service or Hometax.

## Comparison of When the Four Major Social Insurances Are Reflected

A bonus is not deducted identically for every type of insurance in the same month. Because of this difference, reviewing only the net pay for the month of payment may lead to the mistaken conclusion that something was omitted. In principle, industrial accident compensation insurance premiums are not deducted from an employee’s pay.

| Item | How the bonus is reflected | Deduction characteristics in the month of payment | Possibility of later reconciliation |
|---|---|---|---|
| National pension | Reflected in income used to calculate standard monthly income | May not immediately increase by the amount of the bonus payment | May be reflected when standard monthly income is determined |
| Health insurance | Included in total annual remuneration | May be deducted based on current monthly remuneration | May be reconciled after total remuneration is reported |
| Long-term care insurance | Linked to health insurance premiums | Connected to the timing of health insurance processing | May change depending on health insurance reconciliation |
| Employment insurance | Bonus included in remuneration for the relevant month | Deduction may increase in the month of payment | Differences between reported and actual remuneration may be reconciled |
| Industrial accident compensation insurance | Premium paid by the employer | Not subject to employee deduction | Within the employer’s reporting responsibilities |

National pension premiums are imposed based on the current standard monthly income. A one-time bonus does not cause the premium for that month to increase proportionally. However, it may be included in a later calculation of standard monthly income.

Health insurance is reconciled by linking monthly remuneration with total annual remuneration. Long-term care insurance premiums are also linked to health insurance premiums. Even if less is deducted in the month of payment, a reconciliation amount may arise later.

Employment insurance is closely tied to actual remuneration. A bonus that constitutes taxable employment income is generally included in remuneration for the month of payment. Depending on the company’s reporting method, the difference may be adjusted later.

## Example Calculation Formula

You can verify the net payment by subtracting each deduction. Obtain the figures from the pay statement and the company’s calculation sheet. Applying the same percentage to the bonus for all insurance premiums will result in errors.

| Symbol | Amount to enter |
|---|---|
| A | Gross bonus before tax |
| B | Recognized non-taxable amount |
| C | Income tax withheld from the bonus |
| D | Local income tax |
| E | Additional national pension deduction for the month of payment |
| F | Additional health insurance deduction for the month of payment |
| G | Additional long-term care insurance deduction for the month of payment |
| H | Additional employment insurance deduction for the month of payment |

The formula is `A - C - D - E - F - G - H`, not `A - B`. B is excluded from the amounts subject to tax and insurance premium calculations. Because B itself is included in the payment, it should not be subtracted again from the net payment.

Check the latest Wetax guidance for how to verify local income tax D. For E through H, check when each type of insurance is reflected. Compare the result of the formula with the net payment shown on the statement.

## Items to Check on the Pay Statement

On the pay statement, check payment items and deduction items separately. You should also verify whether the “bonus” was combined with base salary. Reviewing only the total deductions makes it difficult to identify the cause of an error.

- Gross bonus amount before tax under payment items
- Taxable and non-taxable amounts
- Income tax and local income tax
- National pension and health insurance
- Long-term care insurance and employment insurance
- Payment coverage period and calculation basis
- Cumulative taxable income and whether it is reflected in year-end tax settlement

If the statement does not show the basis of calculation, request it from the company. A wage statement is a document used to review payments and deductions separately. It is also advisable to retain the bonus payment notice.

## If the Bonus Was Paid Without Deductions

Failure to withhold tax does not eliminate the tax obligation. The company must check whether withholding was omitted. The employee should ask whether an additional deduction will be made from the next salary payment.

An agreement to “guarantee the after-tax amount” differs from a simple failure to make deductions. It is also necessary to review whether taxes paid by the company constitute additional employment income. This calculation may require working backward from the net amount.

Before processing, confirm the following with the payroll representative.

1. Confirm whether the payment is a gross amount before tax.
2. Confirm whether the company agreed to pay the tax.
3. Ask whether a retroactive deduction will be made from the next salary payment.
4. Check whether the withholding tax filing will be amended.
5. Verify whether the amount was included in income for year-end tax settlement.

## Common Mistakes

A common mistake is assuming that the deduction rate for a bonus is the same as the deduction rate for monthly salary. The amount withheld is not the final annual tax liability. The four insurance items also do not change at the same time.

- Applying a single income tax rate to the entire bonus
- Calculating local income tax as 10% of the bonus
- Treating a payment as non-taxable solely because it is labeled transportation expenses
- Including industrial accident compensation insurance premiums as an employee deduction
- Treating the amount withheld in the month of payment as the final tax
- Treating later national pension and health insurance reconciliation as an omission
- Failing to notify the payroll team of changes to dependent information

The basis for calculating local income tax on a bonus should be checked in the latest Wetax guidance. Check the latest Wetax guidance for the calculation method. Annual income and deductions are reflected again during year-end tax settlement.

## Information to Check Through Official Channels

Check taxes through Hometax and the Korean Law Information Center. Insurance enrollment and reporting records can be checked through the Four Major Social Insurance Information Linkage Center. The company’s payroll representative holds the basis for each individual’s actual deductions.

| Purpose | Official channel | Menu or document |
|---|---|---|
| Bonus withholding rules | Korean Law Information Center | Bonus withholding provisions in the Enforcement Decree of the Income Tax Act |
| Simplified employment income tax table | National Tax Service·Hometax | Simplified employment income tax table related to withholding tax |
| Insurance enrollment and reporting records | Four Major Social Insurance Information Linkage Center | Certificate issuance or enrollment record inquiry |
| National pension standard income | National Pension Service | Guidance on standard monthly income |
| Health insurance remuneration reconciliation | National Health Insurance Service | Guidance on employee-insured premiums and monthly remuneration |

The bonus tax amount is not finalized solely through Hometax’s simplified tax calculation based on monthly salary. The payment coverage period and prior bonus history may also be required. Request the final calculation sheet from the company.

## FAQ

### Is income tax also imposed on Chuseok bonuses?
Bonuses paid as compensation for work are generally considered employment income. The company deducts income tax and local income tax according to the bonus withholding method.

### Is the tax on a bonus calculated simply by multiplying the bonus by the tax rate?
No. The calculation may reflect regular wages and bonuses for the applicable payment period, dependent information, and previous bonus history. A simple tax-rate calculation may differ from the actual amount withheld.

### Is the local income tax on a bonus 10% of the bonus?
No. You should check the latest Wetax guidance for the method of calculating local income tax. The calculation method applied to bonuses should be checked in the latest Wetax guidance.

### Does the national pension contribution increase immediately when a Chuseok bonus is paid?
Current contributions are assessed based on standard monthly income. The national pension contribution may not increase immediately in the same month in proportion to a one-time bonus payment, but the bonus may be reflected in a subsequent calculation of standard monthly income.

### Does the health insurance premium increase by the full amount in the month a bonus is paid?
It is not necessarily reflected in full in the same month. A bonus may be included in total annual remuneration, and health insurance and long-term care insurance premiums may be reconciled after remuneration is reported.

### Are bonuses included in employment insurance premiums?
Bonuses that constitute taxable employment income are generally included in remuneration. The employment insurance deduction may increase in the month of payment, or any difference may be reconciled later based on the reported information.

### Are industrial accident insurance premiums also deducted from bonuses?
In principle, industrial accident insurance premiums are borne by the employer. If an industrial accident insurance premium was deducted on an employee's pay statement, ask the company for the basis of the deduction.

### What happens if I receive a bonus without tax being withheld?
The fact that tax was not withheld does not eliminate the tax obligation. The company may retroactively deduct it from the next paycheck or amend its withholding tax filing, so check how it will be handled and whether it will be reflected in the year-end tax settlement.

### Is a holiday bonus labeled as a transportation allowance tax-exempt?
The label alone does not make it tax-exempt. You must determine whether it is reimbursement for actual expenses, a fixed allowance paid as compensation for work, and whether it meets the statutory tax-exemption requirements.

### Is the amount withheld from a bonus the final tax?
The amount withheld is essentially a prepayment made at the time of payment. The final tax amount is recalculated during the year-end tax settlement by reflecting annual employment income and income and tax credits.

## Sources

- [National Law Information Center, Enforcement Decree of the Income Tax Act](https://www.law.go.kr/법령/소득세법시행령)
- [National Tax Service Hometax](https://www.hometax.go.kr/)
- [Four Major Social Insurance Information Linkage Center](https://www.4insure.or.kr/ins4/ptl/Main.do)
- [National Pension Service](https://www.nps.or.kr/)
- [National Health Insurance Service](https://www.nhis.or.kr/)
- [Public Inquiry Cases Regarding Taxation of Holiday Bonuses](https://www.a-ha.io/questions/4984aa6767b17ea9b906df2ec96110b0)
- [Public Inquiry Cases Regarding Withholding Tax on Bonuses](https://www.a-ha.io/questions/4afefb68859f2f21b043998e9cb1c025)
- [Public Inquiry Cases Regarding the Four Major Social Insurances for Bonuses](https://www.a-ha.io/questions/4a0bd1dcdc2940efbaab1a1c3525150f)
- [Public Inquiry Cases Regarding the Handling of Bonuses Without Deductions](https://www.a-ha.io/questions/499c232dbfb3ffa9a5d71aba7d5ee81b)

## Images

![Office worker reviewing payroll documents at a table beside a gift box and songpyeon](https://onbinder.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsiZGF0YSI6MTUxNDQsInB1ciI6ImJsb2JfaWQifX0=--9130cb604defb15d8c7e40f13fa401756c16c929/ai-81e241a7.webp)
![Illustration of tax and insurance deductions calculated from a bonus statement beside a full moon and gift](https://onbinder.com/rails/active_storage/blobs/proxy/eyJfcmFpbHMiOnsiZGF0YSI6MTUxNTAsInB1ciI6ImJsb2JfaWQifX0=--96270949778be4809406657a54e7306fa86b2bdc/ai-ad393555.webp)