Year-End Tax Settlement Errors Can Be Corrected Without Penalty Until June 2

If an employee has underpaid taxes due to an error in year-end tax settlement, they must file an amended report by June 2, the deadline for comprehensive income tax filing, in order to avoid additional penalty taxes.

On May 15, the National Tax Service issued a notice titled "Precautions for Reporting Employment Income," which contains this guidance for employees who may be unfamiliar with comprehensive income tax filing.

The National Tax Service analyzes reported information and, each year in the second half, notifies employees suspected of excessive deductions to file amended returns. If an employee has underpaid income tax due to mistakes in deductions or exemptions, they will be subject to penalties for underreporting and late payment when filing an amended return. However, if they correct their report by the comprehensive income tax filing deadline in advance, they can avoid these penalties.

Conversely, if an employee missed certain deductions or exemptions during year-end tax settlement?such as failing to confirm expense receipts like monthly rent contracts in time, not being aware of newly introduced deductions, or not submitting simplified documents promptly?they can claim these by directly filing a comprehensive income tax return.

Any additional refund resulting from the filing will be credited to the employee’s bank account, as specified on the comprehensive income tax return, within 30 days from the filing deadline (June 2).

Employees who, in the previous year, earned business income from operating an online shopping mall, other miscellaneous income such as lecture fees, or interest and dividend income exceeding 20 million won, in addition to employment income, must file a comprehensive income tax return combining all sources of income.

Even employees with no other sources of income must file a comprehensive income tax return by June 2 if they received salaries from more than one company and failed to combine them during year-end tax settlement. They should check the withholding tax receipts from each company and report the combined income. Even if year-end tax settlement was completed separately by each company, failure to file a combined report may result in penalties for underreporting and late payment.

For any questions regarding employment income reporting, employees can refer to the "Comprehensive Guide to Year-End Tax Settlement" on the National Tax Service website or contact the National Tax Consultation Center.