South Korean Small Businesses That Plan to Add Jobs Can Stay Off the 2025 Regular Tax Audit List

South Korea's National Tax Service will exclude small and midsize firms that submit a job creation plan or an investment expansion plan from selection for regular tax audits on corporate tax for the 2025 business year and comprehensive income tax for the 2025 tax year. On the hiring route, a firm must plan to increase the number of regular workers by 2-3% (minimum 1 person) or more next year compared to this year. The rule, announced on October 28 in a National Tax Service release, is the latest round of a tax support scheme the agency also ran last year, and this round ties audit relief to staff numbers in 2027 (translated). Firms qualify if their revenue sits under industry-specific caps (translated). For Metaintro readers in Korea, the useful part is the hiring math: a business reaches its target faster when it brings on young, older or disabled workers, because each such hire counts as two.

What Did Korea's National Tax Service Announce on October 28?

The goal is to let companies concentrate solely on business activities and growth without worrying about tax verification (translated).

The relief has two doors. A firm can file a job creation plan or an investment expansion plan, and it does not need both, because submitting just one of the two is enough (translated).

The audits in question are routine ones. Firms that file a qualifying plan are left out of regular tax audit selection for corporate tax in fiscal year 2025 and comprehensive income tax for the 2025 tax year.

Which Businesses Qualify for the Audit Exclusion?

Eligible firms are corporations and individual businesses with revenues below industry-specific thresholds for fiscal year 2025, so sole traders as well as companies can apply, and they must also meet the SME tests in the Restriction of Special Taxation Act (translated). Those tests cover annual sales by industry, total assets, independence from large business groups and the type of main business, and the National Tax Service release sets them out in full (translated).

The revenue cap depends on the industry. Sample ceilings include 180 billion won ($135 million) for primary metal manufacturing, 150 billion won (about $113 million) for apparel, footwear and furniture manufacturing, and 120 billion won (about $90 million) for food manufacturing. Other sectors face lower caps, with 100 billion won (about $75 million) for transportation, 80 billion won (about $60 million) for printing, 60 billion won (about $45 million) for repair services and 40 billion won (about $30 million) for food service and accommodation.

Some firms are shut out even if they fit those caps. Companies with total assets of 200 billion won (about $151 million) or more and revenues of 50 billion won (about $37.7 million) or more are excluded. So are corporations providing professional personal services such as legal and tax services or professional individual businesses such as doctors and lawyers with revenues of 50 billion won or more (about $37.7 million).

A clean record is also required. Businesses on the wage arrears disclosure list, delinquent taxpayers, tax offenders, those with accounting fraud, and those who fail to submit integrity verification reports are excluded, so that the benefit goes to SMEs that pay their taxes faithfully while adding jobs and investment (translated).

How Many Jobs Does a Business Need to Add?

The hiring target is set by size. A firm with 2025 revenue below 50 billion won (about $37.7 million) must raise its regular workers by 2% or more, and a firm with revenue between 50 billion and 180 billion won (about $135 million) must raise them by 3% or more (translated).

The comparison year is 2027 against 2026. The plan must show the number of regular workers in 2027 rising by 2% to 3% (at least one person) over 2026 (translated). For a firm with a handful of staff, 2% of the headcount is less than one person, so the one-person minimum (translated) is the real target, because even if the calculated figure is less than 1, at least one more person must be hired.

Why Do Young, Older and Disabled Hires Count Double?

The hiring formula gives extra weight to some workers. When an ordinary SME hires one youth (aged 15-34) regular worker, it counts as hiring two people for job creation ratio calculations. Youth here means ages 15 to 34, with up to six years of military service not counted toward that age (translated).

The same double count applies to two other groups. When general SMEs hire elderly workers (aged 60 or older) and disabled persons, a 2x weighting is also applied, which the tax agency frames as favouring the hiring of vulnerable groups (translated).

Young founders and recognised small giant firms get a wider version. If a youth founded the company, or if it is a youth job champion firm named by the Ministry of Employment and Labor or a truly good small giant firm named by the Ministry of SMEs and Startups, with no disqualifying record such as wage arrears or industrial accidents (translated), hiring one additional regular worker of any age counts as two (translated). The youth-founded test covers firms set up on or after January 1, 2021, whose founding head was aged 15 to 34 (with up to six years of military service not counted) and is the largest shareholder (translated).

There are smaller boosts too. A hire at a regional SME outside the Seoul capital area counts as 1.5 people, and a firm named a digital transformation leader by the industry ministry gets a target lowered by 0.5 percentage points, to 1.5% or 2.5% (translated).

The support is meant to actively back SMEs that lift the vitality of the economy through new hiring and investment even in difficult economic conditions (translated), according to the National Tax Service release.

Who Counts as a Regular Worker Under the Rule?

Only regular workers move the count, and the definition is precise. A regular worker is a worker with an employment contract under the Labor Standards Act, judged by tax residency rather than nationality (translated), so a foreign employee who is a tax resident counts.

Short contracts mostly do not count. Workers on contracts of less than one year are left out, unless repeated renewals bring the total contract period to one year or more (translated).

Part-time staff can count in one case. A part-time worker with at least 60 contracted hours a month and a contract of one year or more (translated) is included.

Some people never count. The list leaves out executives, the largest shareholder (for a sole trader, the owner) and that person's spouse, and their relatives (translated), plus workers who have neither income tax withholding records nor national pension or health insurance payments on file. In plain terms, a relative of the owner or largest shareholder does not count toward the target (translated), even when put on the payroll.

Can Firms Qualify by Investing Instead of Hiring?

Yes. The second door is for firms that plan to increase investment amounts by 5-20% or more next year compared to this year.

The investment bar is lower outside the capital area. Among firms with 2025 revenue below 50 billion won (about $37.7 million), sites in the capital area of Seoul, Incheon and Gyeonggi must expand investment by 10% or more, and sites elsewhere by 5% or more (translated). For firms with revenue between 50 billion and 180 billion won (about $135 million), the bar is 20% in the capital area and 15% elsewhere (translated).

A firm that invests in both places can use the easier regional bar if the regional business site investment ratio is 80% or more. The tax agency ties the split to regional economic revitalization and balanced national development.

For workers the investment route is less direct, because the investment that counts is spending on business assets such as machinery, not land or buildings (translated), and it needs no new post.

How and When Do Businesses Submit a Plan?

The filing window is short. Plans go in from November 2 to November 30 through Hometax online, or by mail or a visit to the competent tax office (translated).

Hometax does the arithmetic. When a firm drafts its plan there, the system automatically calculates the employment growth ratio and the investment growth ratio (translated), and users find the form by searching for job creation or investment expansion in the Hometax search box.

Two divisions are named as responsible for the measure, the corporate tax division and the income tax division (translated).

What Happens If a Business Does Not Hire as Promised?

The relief comes with a catch. Firms that were due for a regular audit, for example because of a low compliance rating, and were excluded after filing a plan, will be added to the regular audit list for the 2025 business year in 2028 if they do not grow jobs and investment as planned (translated).

So for a firm that was due for an audit and breaks its promise, the 2025 business year audit can still come in 2028 (translated).

The tax agency plans to keep up on-the-ground tax support so that it is of real help to SMEs that create jobs and invest for the future (translated), according to the National Tax Service release.

How Is This Round Different From Earlier Ones?

The scheme is not brand new. Last year the tax agency took investment expansion plans for 2026, with qualifying SMEs excluded from regular audit selection on the 2024 business year, and firms had to submit the plan and actually carry it out (translated).

The hiring route also ran before. In April, a job creation measure was in place under which SMEs with revenue of 150 billion won or less (about $113 million) that raise regular workers by 2 to 3% this year over last year are left out of regular audit selection (translated), Korea Tax Times reported. The top revenue band is now 180 billion won (about $135 million) for the job creation route.

The round also lands alongside a wider shift in how audits are run. Average on-site audit stays fell from 52 days to 33 days as of September 2026 (translated), and under a timing-choice system started in April, 88% of 3,873 notices led to the firm's first-choice audit timing (translated), in figures the agency released on October 27.

Why Does Youth Hiring Matter So Much in Korea Right Now?

The double count for young hires meets a weak youth job market. In September, the employment rate for youth aged 15 to 29 was 44.0%, down 1.1 percentage points, marking a 29th consecutive monthly decline, and youth unemployment rose to 5.4%, up 0.6 percentage points.

The wider labour market grew. Total employment reached 29.266 million, an increase of 113,000 from a year earlier, but by age group employment decreased among those in their 20s (-170,000) while it rose among people aged 60 and older.

People aged 15 to 34, who are classified as youth under the Special Act on Promoting Youth Employment, the same band the audit rule uses for youth hires (translated), saw their employment rate drop by 0.4 percentage points to 56.1% in data from the National Data Office.

What This Means for Job Seekers, and What Should You Do Next?

This is a tax rule, not a job posting, and the National Tax Service release gives no estimate of how many firms will file or how many posts will follow. Still, it changes the incentive at a specific group of employers. A small manufacturer, logistics firm or restaurant group that wants to stay off the regular audit list for the 2025 tax year now has a reason to add regular staff, and a strong reason to make that hire a youth (aged 15-34), an elderly worker (aged 60 or older) or a disabled person, since each counts double.

That points job seekers toward small and midsize firms rather than only the big names. Before taking an offer, check where South Korean monthly pay levels now stand. For a public-sector example of youth intern places, see how Korea National Railway set aside roles for youth interns.

The rule also favours a certain kind of contract. Only posts that meet the regular worker test (translated) count toward the plan. When an SME offers you a role under this scheme, ask whether the contract runs for one year or more (translated), because shorter contracts that are never renewed do not count toward the plan.

Lacey Kaelani, Metaintro's CEO, puts it this way: A tax rule that rewards each young or older hire tells you where small firms will look first, so be the candidate who fits that rule and ask for a contract that lasts.

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People Also Asked

Q: Do Korean small businesses have to hire to avoid a tax audit?

A: No. A firm can qualify by filing a hiring plan or an investment plan, and submitting just one of the two is enough (translated). The hiring plan needs regular staff to rise by 2-3% (minimum 1 person) or more.

Q: Does a young worker count more under the Korean audit rule?

A: Yes. When an ordinary SME hires one youth (aged 15-34) regular worker, it counts as hiring two people, and the same weighting applies to workers aged 60 or older and to disabled workers.

Q: When can Korean firms file the job creation plan?

A: Plans can be filed from November 2 to November 30 through Hometax, or by mail or a visit to the tax office (translated).

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