2025 Tax Refund Guide for Employees: Don't Miss Out on These Year-End Tax Settlement Tips

2025 Tax Refund Guide for Employees: Year-End Tax Settlement Tips You'll Regret Missing

Hello! Today, we will take a close look at year-end tax refunds, something that every employee is interested in. This guide is written based on official data for the 2024 year-end tax settlement.

1. Basic Deduction Items Summary

Personal Deductions

• Basic Deduction: KRW 1.5 million per person
• Senior Citizen Deduction (70 years old and above): KRW 1 million per person
• Disability Deduction: KRW 2 million per person

Deduction for National Pension and Other Four Major Insurance Premiums

• National Pension: Full deduction
• Health Insurance Premiums: Full deduction
• Employment Insurance Premiums: Full deduction

2. Income Deduction Items

Credit Card Usage Deduction

• Credit Card: 15% of the amount used
• Debit Card: 30% of the amount used
• Cash Receipt: 30% of the amount used
• Traditional Market/Public Transportation: 40% of the amount used

※ Deduction Limit: The smaller amount between 20% of salary and KRW 3 million

Housing Fund Deduction

• Comprehensive Housing Savings: Up to KRW 2.4 million per year
• Housing Rental Loan Principal and Interest Repayment: Up to KRW 3 million per year

3. Tax Credit Items

Insurance Premium Tax Credit

• Coverage Insurance Premiums: Up to KRW 1 million per year, 12% credit
• Disability Coverage Insurance Premiums: Up to KRW 1 million per year, 15% credit

Medical Expenses Tax Credit

• Medical expenses for basic deduction beneficiaries
• 15% credit for amounts exceeding 3% of total salary
• 20% credit for infertility treatment expenses
• No limit

Education Expenses Tax Credit

• Self: Full amount up to graduate school, 15% credit
• Children: Up to KRW 3 million per child, 15% credit
• Pre-school children: Up to KRW 3 million per child, 15% credit

4. Frequently Missed Deduction Items

1. Book Purchases/Academy Fees

• Job-related book purchases
• Job-related academy fees
  ※ Only applies to job-related self-development expenses for the employee

2. Deductions related to working mothers

• Childcare fees
• Academy fees
• Kindergarten fees
  ※ For children under 8 years old

3. Monthly Rent Tax Credit

• Total annual income of KRW 70 million or less
• National minimum housing size or smaller
• 10% credit for monthly rent

5. Year-End Tax Settlement Checklist

Early January Preparations

• Organize credit card usage history
• Collect medical expense receipts
• Issue insurance premium payment certificates
• Confirm housing fund repayment certificates

Documents to Submit to Company

• Income tax deduction declaration
• Resident registration
• Various supporting documents

6. Easy Mistakes to Make

Points to Note

1. Check for non-duplicate deduction items
2. Review whether deduction requirements are met
3. Check for exceeding deduction limits

Common Mistakes

1. Duplicate submission of medical expense receipts
2. Including non-deductible education expenses
3. Misunderstanding credit card deduction limits

In closing

This guide is based on official data from the National Tax Service. The specific eligibility for deductions may vary depending on individual circumstances, so we recommend consulting the National Tax Service's Hometax website or a tax accountant.

In the next post, we will cover how to thoroughly analyze your payslip.