Tax on 100 million won retirement pay is 1.23 million won… Expansion of Public Tax Advocate support scope

When receiving retirement pay, the tax amount is not calculated by simply multiplying the total amount by a tax rate; instead, the tax is calculated by applying various deduction systems based on the period of service and the scale of income. According to a National Tax Service video, retirement pay is classified as retirement income under tax law, and income tax and local income tax are imposed. However, the entire amount of retirement pay is not subject to taxation, as the tax burden is lowered through deductions such as the years-of-service deduction and the converted salary deduction.

If you receive 100 million won after 20 years of service, the tax is 1,232,000 won

The calculation method for retirement income tax is structured to sequentially subtract deduction amounts based on the period of service. According to the example presented in the video, if one works for 20 years and receives 100 million won as retirement benefits, a 40 million won years-of-service deduction is applied first. Subsequently, if the converted salary deduction is additionally applied based on the remaining amount and the period of service, the tax base used to calculate the tax becomes 11.2 million won.

With this, the retirement income tax calculated by reflecting the basic tax rate and the years of service is 1.12 million won, and when 112,000 won of local income tax is added, the total tax payable is calculated to be 1,232,000 won. As a result, the actual amount received from the 100 million won retirement benefit, excluding taxes, is approximately 98,768,000 won. Meanwhile, medical benefits, temporary disability benefits, disability benefits, survivor compensation, and injury compensation received due to industrial accidents are subject to tax exemption and are not taxed.

Expansion of 'Public Tax Advocate' support scope to protect the rights of small taxpayers

When it is determined that taxes have been unfairly imposed, the 'Public Tax Advocate' system is also in operation, where tax experts provide free support for appeal procedures for small taxpayers who find the cost of appointing a tax agent burdensome. Public Tax Advocates consist of tax experts such as tax accountants, certified public accountants, and lawyers with more than 3 years of relevant experience. They support the entire appeal process on behalf of the taxpayer, including drafting necessary documents for objections, reviewing laws and regulations, and preparing evidentiary materials.

Those eligible to use a Public Tax Advocate are those whose claimed tax amount is 50 million won or less without having appointed an agent. Individuals must meet the requirements of having a total income amount of 150 million won or less and property value of 500 million won or less, while corporations can receive support if their revenue is 300 million won or less and asset value is 500 million won or less. Applications can be made to the relevant tax office before filing an appeal, and even if an appeal has already been processed, eligibility for support can be confirmed through guidance from the tax office.

In particular, from 2026, the support scope of the Public Tax Advocate will be further widened. In addition to the existing pre-assessment review, objections, and requests for examination, help from a Public Tax Advocate will also be available at the 'grievance petition' application stage. A grievance petition is a means of remedy that can be utilized in cases where it is difficult to use general appeal procedures because the claim period has passed. Accordingly, small taxpayers who meet certain requirements will be able to receive help from tax experts through the expanded support scope.