Substitute Drivers, Quick Service Workers, and Caddies Must Submit Income Data Monthly Starting the 11th

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[Sejong=Asia Economy Reporter Kim Hyunjung] The National Tax Service announced on the 10th that businesses providing workplaces or mediating services for workers in eight industries, including substitute drivers, quick service drivers, and caddies, must submit income data of those workers monthly starting from income generated on the 11th. The relevant industries are substitute drivers, quick service drivers, caddies, caregivers, housekeepers, baggage handlers, used car salespersons, and bathroom workers.

The monthly submission data refers to income data submitted when the service provider receives payment directly from an individual (customer) rather than a business, and thus is not subject to withholding tax. When the service provider receives payment from a business and is subject to withholding tax, a simplified payment statement (business income of residents) must be submitted; this monthly submission has been implemented since income payments from July 1 of this year. The shortening of the income data submission cycle for service providers from annual to monthly aims to timely grasp income information necessary for welfare administration support and other purposes.

Despite difficult business environments such as COVID-19, during August and September when the monthly income data submission system was implemented, an average of 820,000 businesses submitted income data for 6.56 million individuals monthly. Approximately 260,000 small businesses exempt from penalty tax also submitted income data monthly. Businesses with 20 or fewer regular employees and those paying withholding tax semiannually are exempt from monthly submission; if they submit income data by the previous deadline, penalty tax is waived for one year.

When submitting income data, if data is omitted or daily labor income is mistakenly reported as business income, penalty tax may be imposed on the business. To prevent tax disadvantages for businesses, a notification window guiding monthly income data submission was newly established on Hometax in November, and in October, guidance letters were sent to 2,200 businesses suspected of incorrectly reporting daily labor income as business income.

Income data must be submitted with accurate industry classification and resident registration numbers of the income earners. Continuous guidance is provided to ensure accurate industry classification, and the system has been changed so that daily labor income payment statements with incorrect resident registration numbers cannot be electronically submitted via Hometax; individual notifications are given regarding these changes.

In September, income data collected in real time was provided to the Korea Workers' Compensation and Welfare Service for the first time. This is significant as it supports nationwide employment insurance by collecting and providing income data monthly.

This content was produced with the assistance of AI translation services.