Young people who have started their working life should also check the tax benefits available to them after receiving their first paycheck. In particular, youth employed at small and medium-sized enterprises (SMEs) can enjoy an income tax reduction for up to five years if they meet certain requirements.

■ Workers Aged 15 to 34 at SMEs Receive 90% Income Tax Reduction

According to the National Tax Service, youth aged 15 or older and 34 or younger at the time of signing their employment contract who are hired by SMEs eligible for the reduction can receive a 90% reduction in income tax on their earned income for five years from the date of employment. The reduction cap is up to 2 million won per taxable period.

For those with military service periods, that period can be excluded from the age calculation within a certain range. Therefore, even those whose actual age exceeds 34 may still be eligible for the reduction.

■ Not Applied Automatically… Eligibility Must Be Carefully Verified

However, not all young workers automatically qualify for the reduction simply because they were hired by an SME. Eligibility may vary depending on the company's industry, corporate requirements, and the worker's status.

Executives, majority shareholders, maximum investors, and certain relatives may be excluded from the reduction, and it is also necessary to confirm whether the company's industry is eligible for the reduction.

■ Applicants Must Handle the Application Process Themselves

A separate application is required to receive the reduction. Eligible individuals simply need to fill out the 'Application for Income Tax Reduction for SME Employees' and submit it to their employer. Based on the application, the company applies the income tax reduction during the withholding process.

For those new to the workforce, it is easy to focus only on monthly and annual salaries, but taxes also affect the actual take-home pay. This is why those newly employed at an SME should check whether they qualify for the income tax reduction.

Detailed information on eligible recipients, excluded industries, and application methods can be found on the National Tax Service website under the 'Income Tax Reduction for SME Employees' section.

[This article is an informational piece based on publicly available guidance from the National Tax Service and other sources, with AI assistance used for some sentence structuring and editing. Tax eligibility and reduction criteria may vary depending on individual circumstances and changes to the system, so readers should consult official guidance from the National Tax Service or Hometax before applying.]