Major Changes in 2025 Year-End Settlement of Exact Payroll Withholding Taxes
l Expansion of the child tax credit amount (IITL, Article 59-2)
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Child Tax Credit *Eligible child(ren): A child or grandchild who is a dependent eligible for the basic deduction and is aged 8 or older
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Child Tax Credit - Same
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Effective Date: Applies to income earned in tax year that includes January 1, 2025 and after.
l Rationalization of tax association tax credit and grant support levels (IITL, Article 150-3 and
Article 169 and IITL Enforcement Decree, Article 221-1)
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Withholding Tax System for Licensed Taxpayer Association * A system that allows taxpayers in industries where tax base identification is difficult to voluntarily form an association and withhold and remit income tax (Withholding and remittance) The taxpayer association withholds and remits income tax on behalf of its members on a monthly basis (by the 10th of the following month). (Tax credit for association members) * Limit: KRW 1,000,000 per member per year Applicable period: Until December 31, 2024 |
Withholding Tax System for Licensed Taxpayer Association - Same
- Same
(Reduction of tax credit rate for employees) 5% → 3% of
the monthly income tax amount Applicable until: December 31, 2027 |
Effective Date: Applies to income earned in tax year that includes January 1, 2025 and after.
l Application of credit card income deduction for swimming pool and fitness center usage
fees (STTCL, Article 126-2)
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Income Deduction for Credit Card, etc. Usage Amounts (Eligible amount) The portion of spending that exceeds 25% of total gross salary (Basic deduction) (Deduction rate) Varies depending on the payment method
(Deduction limit) n • Gross salary KRW 70 million or less:
KRW 3,000,000 (Additional Income Deduction) (Deduction rate)
* Applies only to employees with gross salary of KRW 70 million or less.
(Additional deduction limit) • Gross
salary KRW 70 million or less: KRW 3,000,000
(Effective period) Until December 31,2025 |
Income Deduction for Credit Card, etc. Usage Amounts - Same
(Additional Income Deduction) (Deduction rate)
* Applies only to employees with gross salary of KRW 70 million or less.
- Same
- Same |
Effective Date: Applicable to swimming pool and fitness center facility usage fees paid by credit card on or after July 1, 2025.