On the 23rd, the National Tax Service released the’Comprehensive Guide to the Year-end Settlement of Earned Income attributable to 2020′ including these details. Workers can check the proof of income and tax deduction on the simplified service screen for a month starting on the 15th of the following month.
According to the National Tax Service, from March to July this year, the income deduction rate for credit cards and other uses has been greatly expanded, and the deduction amount has also been increased by 300,000 won compared to the previous year. In the case of credit cards, the deduction rate is 15% (January-February, August-December), but increases to 30% in March and 80% in April-July. Credit card income deduction limit is also from KRW 3 million to KRW 3.3 million for total salary of 70 million won or less, KRW 2.5 million to 2.8 million for over 70 million won to KRW 120 million, and KRW 2 million to 2.3 million for over 120 million won. Enlarged.
The limit for payment of pension accounts subject to tax credits has been temporarily increased to 6 million won for three years only for those over 50 years of age with a total salary of 120 million won or less. It is to support the preparation for retirement.
Spousal maternity leave benefits received under the’Employment Insurance Act’ to promote maternal protection and male parenting participation are non-taxable earned income, and are not included in the total benefit amount from income generated after January 1 of this year. Profits earned by small and medium-sized business employees from purchasing or renting houses at low interest or free of charge are excluded from annual earned income. The tax-free limit on profits from exercising stock options of executives and employees of venture companies will be expanded from 20 million won to 30 million won per year.
Among the requirements for non-taxation on overtime pay for production workers, the standard for total wages for the previous year was reduced from 25 million won to 30 million won or less. In order to support outstanding Korean talents residing overseas, they are entitled to a 50% reduction in income tax for five years if they meet certain career requirements.
Workers working in creative arts, sports, libraries, historical sites, and similar leisure-related service industries, where wages are low and manpower shortages are high, are eligible to receive a reduction in income tax for employed by SMEs. Income tax 70% for 3 years (90% for 5 years for youth) for young people, 60 years of age or older, and the disabled who are employed by SMEs (annual limit of 1.5 million won) is received. Marriage/child education is added to the reasons for recognition of career break, and requirements for career break period (within 3 to 10 years after retirement → within 3 to 15 years) and re-employment target companies (same company → same type of business) are relaxed.
From this year, data on the monthly rent for public rental housing, the cost of purchasing glasses, and the amount of actual loss insurance received will be provided in the year-end settlement simplified system. This year’s national emergency disaster support donation data is also reflected in the simplified system. Data on the simplified system will be available from the 15th of next month.
For small businesses that do not have their own year-end settlement program, workers can fill out a deduction report and submit it to the company through the Hometax’Fill All’ service. In this year-end settlement, the process of creating the fill-out service has been reduced from the previous 4 steps to 1 to 2 steps. If the company has registered basic data such as salary in Hometax, the employee can complete the submission of the company after filling out a deduction report in Hometax.
Various year-end settlement guide materials are also provided through the website and video. The National Tax Service provides comprehensive guidance on the revised tax law and preparation of deductions in the’Comprehensive Guide to Year-end Settlement’ on the website (www.nts.go.kr), and provides 5 types of customized help including self-checklists and collections of questions and answers.
Kim Ju Ogija [email protected]