Samsung Electronics to Pay Special Performance Bonuses to Semiconductor Employees in Late March Next Year Subject to 49.5% Tax Rate

The timing for distributing special performance bonuses to employees in Samsung Electronics' Device Solutions (DS) division has been finalized for late March next year, right after the regular shareholders' meeting.

The tax year will be next year, and the bonuses will be disbursed after withholding taxes by uniformly applying the highest income tax rate of 45% (49.5% including local income tax).

According to the industry today (the 7th), the Samsung Electronics DS division posted internal notices this afternoon detailing the special management performance bonuses.

The performance bonuses are scheduled to be paid in late March or early April next year, following the regular shareholders' meeting.

The tax year is 2027.

The special management performance bonus plan is scheduled to be submitted as an agenda item at next year's regular shareholders' meeting.

The payout rate will be calculated based on the organization within the DS division where the employee belonged for the longest period during 2026, and will be announced by business unit next February.

The Power Semiconductor (CSS) business team is excluded.

The total payout amount is determined by multiplying each individual's base amount by the special performance bonus payout rate.

Payment will be made in company shares after deducting taxes, insurance premiums, and donations.

The bonuses will be disbursed after withholding a flat rate of 49.5%, combining a 45% income tax and a 10% local income tax.

This measure is intended to reduce the possibility of additional tax collections during year-end tax settlements.

Eligible recipients are those who are employed as of December 31, 2026, or employees on certain types of leave such as childcare or pregnancy, with detailed eligibility determined by aggregating periods of employment and leave.

However, exclusions apply to ▲ those with an actual working period of one month or less in 2026, ▲ employees on leave or suspended as of December 31, 2026 (excluding eligible leave recipients), ▲ probationary employees hired on or after October 1, 2026, and ▲ those deemed ineligible under other contract conditions.

Additionally, Samsung Electronics management and labor union are pursuing a joint donation agreement regarding the special management performance bonuses.

Executives and employees in the DS division can voluntarily choose to donate between 0.2% and 1.0% of their special management performance bonus, and the donated amount will be matched 1-to-1 by management and labor.

Discussions between management and labor regarding details such as donation recipients will continue.

Previously, through a wage agreement settlement last May, Samsung Electronics management and labor agreed to newly introduce special management performance bonuses for the DS division, separate from the existing Overall Performance Incentive (OPI).

The special management performance bonuses are funded by 10.5% of the operating profit, which is the business performance of the DS division, with no separate cap.

The entire post-tax amount will be paid in company shares, with 40% of the funding prioritized and allocated to the entire DS division and the remaining 60% divided among business units within the DS division.

One-third of the distributed shares can be sold immediately, while the sale of the remainder is restricted in halves for one and two years, respectively.
※ Please note: This article was translated by AI and may contain errors.