In the 2024 year-end tax settlement, young employees (aged 15 to 34) working at small and medium-sized enterprises (SMEs) can receive a 90% income tax reduction for five years from their employment date. Career-interrupted male and female workers are now also eligible for tax reductions, expanding the scope of tax relief. Spousal parental leave benefits and university student children’s work scholarships are recognized as tax-free income, providing additional deduction opportunities. Workers paying monthly rent for residential officetels or gosiwons, as well as those repaying housing loan principal and interest, can also benefit from expanded deductions.
On January 20, 2024, the National Tax Service announced key deduction and reduction items that employees often overlook. Young SME workers are eligible for a 90% income tax reduction for five years, while those aged 60 or older, disabled, or career-interrupted can receive a 70% reduction for three years (up to KRW 2 million per year). Since March 14, 2023, career-interrupted men are also included. Parental leave benefits under the Employment Insurance Act and work scholarships for university students are tax-free, allowing for basic, credit card, medical, education, insurance, and donation deductions.
For donations, amounts not previously deducted before 2024 can be carried forward for up to 10 years, and the temporarily increased deduction rates for 2021–2022 also apply. Employees renting residential officetels or gosiwons are eligible for rent tax credits. Principal and interest repayments on housing loans are also deductible, and tax benefits continue even when refinancing. For more information, employees can consult the National Tax Service website or call the tax consultation center (126).
Looking ahead, year-end tax settlements are expected to further expand tax benefits for various worker groups. Enhanced support for young people, career-interrupted workers, and those in vulnerable housing situations will strengthen the social safety net. By carefully reviewing deduction items such as donations and rent, employees can minimize additional filings and maximize tax refunds. Proactively using NTS guidance is key to efficient year-end tax preparation.
This year’s tax settlement system strengthens social inclusion by expanding tax support for young workers, career-interrupted employees, and vulnerable groups. The expansion of tax-free income and carry-forward donation deductions will reduce the real tax burden and encourage a culture of giving. Integrating AI-powered tax automation services can help employees avoid missing deductions and optimize refunds, signaling a growing demand for digital tax solutions in the future.