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Car Allowance

I’d like to let you guys know about the non-taxable income salaries for employees, have you ever heard about it?

I’m not talking about Interest from savings account of less than 30 million won with mutual financial institutions of agricultural or fishing associations on condition that the depositor is 20 years or older when opening the account, or Prizes of money or other property received upon conferment of a decoration or other public prizes under the law.

I’m talking about incomes are not included for your income tax basis and also the basis for 4 major insurance calculation, did you know this?

I mean when you design a compensation package for your employees, you need to consider these items to save the income tax(6~38%) and 4 major insurance(7~9%) of your employees but also company portion of tax and insurances.

I have an experience that some of employees are reluctantly accepted these separation since worrying some disadvantage of retirement allowance, but it’s just worry. When you calculate those retirement allowance, these non-taxable incomes will be added for 3-month-average basis.

There’re a various kind of category but usually allowed for some specific conditions, for example 200,000won per month for car owner(or his or her spouse owned) driving for company use sometimes, but not always…

As you may know 100,000won per month for lunch, but only if it’s included in payroll, if a company provide a coupon or lunch at casino, it’s taxable.

And childcare allowance for 100,000won per month, and reporters’ allowance for 200,000won per month and so on, for more information please contact me by

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