Your income tax liability for the year is settled and finalized in January next year through year-end exact computation by your employer. Then, the total of monthly deduction(the amount withheld) taken off your earnings is treated as a credit against the overall amount of tax payable by you for the tax year in question. Your employer must calculate the tax amount for the year at the time of first payment of wage and salary income the next year, and collect or refund the balance between the tax amount payable calculated by applying the tax rates and the tax amount withheld according to the Simplified Tax Withholding Table.
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