"‘Paying 100 Million Won for Childbirth’ Is Someone Else’s Story... The Reality Is About 680,000 Won Per Year"

"Half of the Tax Exemption Limit"

As the low birthrate phenomenon has prolonged, the total fertility rate in the fourth quarter of last year recorded the lowest ever at the 0.6 level for the first time, while the average amount of childbirth and childcare allowances paid by companies per person was found to be only about half of the tax-exempt limit. This means it is less than 100,000 won per month.

According to the National Tax Service's tax statistics on the 18th, the number of workers who reported tax-exempt childbirth and childcare allowances from earned income in 2022 was 472,380, with a total reported amount of 320.7 billion won.

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The childbirth and childcare allowance is a benefit provided by companies to employees for childbirth of themselves or their spouses, or for childcare of children under six years old. Until last year, a tax exemption benefit was given up to 100,000 won per month, but from this year, the limit has been raised to 200,000 won.

The scale of tax-exempt childbirth and childcare allowances peaked at 341.4 billion won in 2018 and then entered a declining trend. It decreased to 320.4 billion won in 2021 and maintained a similar level in 2022. The average tax-exempt allowance per person, calculated by dividing the total tax-exempt childbirth and childcare allowance amount by the number of reporters, was 679,000 won in 2022. This is about half of the annual tax-exempt limit (1.2 million won as of 2022). In particular, considering that the tax-exempt limit doubled from this year, there is an expectation that the gap between the actual tax-exempt amount and the limit may widen further.

Recently, Booyoung gained significant attention by generously donating a total of 7 billion won in childbirth incentives, giving 100 million won each to about 70 employees’ children. Lee Jung-geun, chairman of Booyoung Group, has been providing 100 million won childbirth incentives to employees who gave birth since 2021. For the third child, a permanent rental house free from tax burdens is also provided. However, it is interpreted that, overall, companies have become more reluctant to provide such incentives.

A government official said, “Some large corporations provide childbirth support payments exceeding the tax-exempt limit, more than 100,000 won per month, but many companies give less than 100,000 won or do not provide any support at all.”