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SME Tax Reduction – How to Get a 90% Income Tax Cut

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If you work for a Small or Medium-sized Enterprise (SME) in Korea, you may be eligible for a significant income tax reduction. However, you must actively apply to receive this benefit.

Benefit Details​

  • Eligibility: Employees aged 15 to 34 (at the time of starting employment). Men can subtract their mandatory military service duration when calculating their age.
  • Reduction Rate: 90% reduction in income tax.
  • Cap: Maximum of 2 million KRW per year.
  • Duration: Valid for 5 years from the date you started working at the qualified SME.
  • (Note: Individuals over 60 or those with disabilities are eligible for a 70% reduction).

How to Apply​

You cannot apply for this yourself via Hometax; the application must be processed through your employer.

  1. Download Form: Obtain the "Application for Income Tax Reduction for SME Employees" (중소기업 취업자 소득세 감면신청서).
  2. Fill Information: Enter your personal details and the date you commenced work at the company.
  3. Submit: Turn the form into your company's Accounting or HR department.
  4. Verification: The company will verify your eligibility and submit the list to the National Tax Service.

[!TIP] Quick Tip: If you have been working for several years but forgot to register, you can file a Rectification Claim (경정청구) for the last 5 years to recover the excess tax paid.