What is the withholding tax rate applied to signing bonuses?

Signing bonuses are considered earned income and are therefore subject to the same progressive withholding tax rates as regular salary. These rates range from 6% to 45%, depending on the total amount of income received in the month, including the bonus. The actual amount withheld is calculated using the withholding tax table, which considers the combined income from salary and the bonus.

Key points:

1. Classification: Signing bonuses are treated as earned income under Article 14 of the Income Tax Act.
2. Tax Rate: The progressive tax rates of 6% to 45% apply.
3. Calculation: The withholding tax is determined based on the withholding tax table (Article 122 of the Enforcement Decree of the Income Tax Act), which factors in the bonus amount when combined with the regular monthly salary.
4. Process: The total tax for the month is calculated on the combined income, and the tax already withheld from the regular salary is deducted to determine the final withholding amount for the bonus.