The withholding of resident tax works differently from national one, which you currently deduct from everyone’s salary every month.
The resident tax is also required to withhold every month based on tax bills that local governments send to employer. But the enforcement was not very strict for the past years.
Therefore, there have been many small companies who do not handle employees’ resident tax and leave it to employees as their own business.
Recently, the attitude of the local government have been changed and they are more strict. They really push employers to abide with the rule.
Therefore, I recommend to start withholding the resident tax from the next round, if you are not doing, which starts from June next year. The procedure is quite similar to the national tax but it is easier. Because they send the 12 tax slips for each month to withhold for each employees, you will just need to take the exact amount from employee’s salary every month.
Please note that the tax slips will be only sent for those who are on payroll as of Dec 31 in the previous year. For example, the tax slips for 2017 will only be sent for those in the company as at 31st of December, 2016.
