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Tax rate
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Toon Army



Joined: 12 Mar 2007

PostPosted: Wed Oct 15, 2008 10:20 pm    Post subject: Reply with quote

nomad-ish wrote:
Gunther wrote:
Scaggs wrote:
Where does this 3.3% number come from? It seems like many many employers try to charge this.


Just spoke to the guy at the National Tax Service... and the Tax rate for teachers at private academy's is 3.3%, because you are regarded as an independent contractor.


i've read that it's illegal to be considered an independent contractor on an E2 visa (which applies to the majority of English teachers in Korea).


I take it it`s 3.3% tax for E-2`s working at private academies then?
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lov2travel



Joined: 21 Oct 2008
Location: South Korea

PostPosted: Tue Jan 06, 2009 10:04 pm    Post subject: Reply with quote

Grotto wrote:
Tax office(thanks to Peppermint)

http://www.nta.go.kr/eng/default.html

They also have an English hotline The number is 02-397-1440

for all your firsthand information.



I get this message when I go to this website

Forbidden
You don't have permission to access /eng/default.html on this server.


--------------------------------------------------------------------------------

Apache/1.3.41 Server at wf.dn.net Port 80




So yeah....I'm getting paid 2.2 mil and my tax is 72,600

How much am I paying into taxes and if it's not right, how do I remedy it.
I'd like to make as much as possible obviously.
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cmr



Joined: 22 Mar 2006

PostPosted: Wed Jan 07, 2009 8:39 pm    Post subject: Reply with quote

lov2travel wrote:
Grotto wrote:
Tax office(thanks to Peppermint)

http://www.nta.go.kr/eng/default.html

They also have an English hotline The number is 02-397-1440

for all your firsthand information.



I get this message when I go to this website

Forbidden
You don't have permission to access /eng/default.html on this server.


--------------------------------------------------------------------------------

Apache/1.3.41 Server at wf.dn.net Port 80




So yeah....I'm getting paid 2.2 mil and my tax is 72,600

How much am I paying into taxes and if it's not right, how do I remedy it.
I'd like to make as much as possible obviously.


Did you try to call?
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ontheway



Joined: 24 Aug 2005
Location: Somewhere under the rainbow...

PostPosted: Sat Jan 10, 2009 4:01 am    Post subject: Reply with quote

need to check your income tax withholding on the NTS site.

Try this link:

http://www.nts.go.kr/eng/

click on: Automatic Calculation Service

There is a year end tax calculator and if you need to check your monthly withholding look for: Check your monthly withholding tax


Or try this direct link:

http://www.nts.go.kr/eng/help/help_52.asp?top_code=H001&sub_code=HS05&ssub_code=HSE2
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ATlasIAm



Joined: 27 Oct 2008
Location: Sincheon

PostPosted: Fri Nov 20, 2009 10:52 pm    Post subject: Reply with quote

great, i've been looking for some info about this.
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BrenSmith



Joined: 10 Sep 2009
Location: Bundang

PostPosted: Wed Jan 13, 2010 2:20 am    Post subject: Reply with quote

ok, so according to the NTS tax on say..2.1m won is around 1.2% but esl teachers are 3.3% as independent contractors? any official gov't literature on this 'independent contractor' status?
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desttiny13



Joined: 16 Apr 2010

PostPosted: Tue Apr 20, 2010 5:47 pm    Post subject: There has to be a place to find out what the tax rate is.. Reply with quote

Can't the embassy tell you what the tax rate is
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carolleim



Joined: 10 Apr 2010

PostPosted: Wed Jun 02, 2010 5:25 am    Post subject: Reply with quote

So I am not sure about the rules for income taxes on foreign nationals- the more I read about it, the more confused I get. Apparently, if you're hired by a university or university-run program, you do not have to pay taxes.

"Article 20 of the Korean Tax Code states: "An individual who is a resident of a contracting State and who, at the invitation of any university, college, or other recognized educational institution, visits the other contracting State for a period not exceeding two years solely for the purpose of teaching, or research or both at such educational institution shall be taxable only in the first mentioned State on his remuneration for such teaching or research."

The Korean Tax Office in Seoul maintains a list of institutes where foreign teachers are tax-exempt. In principle, Article 20 applies only to teachers employed at universities, research centres or university-operated institutes. Teachers at hakwons and at private companies may have to pay tax. The general affairs section of the university or research centre can apply for the exemption. If the institute withholds income tax without reason, it is required to pay a refund." (from an EFL site)

So~ I was hired by Yonsei University for a summer program for high school students. My contract says I'll be taxed at 4.4%, according to Korean tax law. Is this correct? It comes up to a few hundred dollars, so I wanted some information before I contact the adminstration. Any advice will be greatly appreciated!
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jcm87



Joined: 19 Jan 2010

PostPosted: Tue Aug 03, 2010 10:54 am    Post subject: Reply with quote

Can someone please settle this tax debate? I pointed my recruiter to the NTS site and the amount I should be receiving based on my salary and she says that all English teachers are taxed at 3.3%. It does say this in the contract though:

tax (3.3 %) shall be withheld from the salary in accordance with Korean Tax Law. The Employee shall be provided with the receipts.

So if I'm getting receipts, than I should be OK?
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ttompatz



Joined: 05 Sep 2005
Location: Kwangju, South Korea

PostPosted: Tue Aug 03, 2010 12:25 pm    Post subject: Reply with quote

jcm87 wrote:
Can someone please settle this tax debate? I pointed my recruiter to the NTS site and the amount I should be receiving based on my salary and she says that all English teachers are taxed at 3.3%. It does say this in the contract though:

tax (3.3 %) shall be withheld from the salary in accordance with Korean Tax Law. The Employee shall be provided with the receipts.

So if I'm getting receipts, than I should be OK?


It means you are being treated as a contractor and not an employee (illegal but often done).

Find a new job or if you are desperate, take it, live with knowing you are being cheated and find something better for next year.

You know it is a scam if anywhere in your contract is a line (in the preamble or elsewhere) that refers to you as "employee"

.
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jcm87



Joined: 19 Jan 2010

PostPosted: Tue Aug 03, 2010 3:26 pm    Post subject: Reply with quote

What should it refer to me as? Also, since it says "in accordance with tax law" can't I call them out on it or something, since the 3.3% tax rate is illegal? I'm tempted to take the job because it's in my first choice location (Busan, where jobs are scarce) and I don't really want to wait any longer.

Why is it exactly they do this independent contractor thing? The hagwon doesn't see any of this tax, do they? So what's the incentive to get their employees to be taxed heavier?
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ontheway



Joined: 24 Aug 2005
Location: Somewhere under the rainbow...

PostPosted: Wed Aug 11, 2010 12:23 pm    Post subject: Reply with quote

jcm87 wrote:
What should it refer to me as? Also, since it says "in accordance with tax law" can't I call them out on it or something, since the 3.3% tax rate is illegal? I'm tempted to take the job because it's in my first choice location (Busan, where jobs are scarce) and I don't really want to wait any longer.

Why is it exactly they do this independent contractor thing? The hagwon doesn't see any of this tax, do they? So what's the incentive to get their employees to be taxed heavier?




It is completely legal to be an independent contractor on an E2 visa if the contract is written correctly. For some teachers this is a better option than being an employee. For most it is not. In these cases it is legal for the school not to enroll the teacher in pension and health insurance. The teacher is still required to report and pay for their own HI and Pension if they want to be legal.

Many schools have badly written contracts that do not meet the requirements of an independent contractor, even though it was the school's intent to do so. This is a much larger group of schools. In addition, many schools and accountants try to use the "5 employee" exemption, but this once legal exemption has been repealed. In these cases it is illegal for the school not to pay for HI and Pension.

The incentive of the illegal schools is to not pay any national health insurance or pension tax to the government and thereby make the school look smaller. The money they save by cheating the teacher is not the main factor. The teacher is kept in the underground economy. The school is able to hide revenues making its total size appear smaller and reduce the much higher income and other taxes paid by the owner. The owner is able to keep a larger portion of the school underground and save more by cheating on his own taxes than what he gains by cheating the teacher. Double win for the owner. Some owners are willing to pay for alternative health insurance, even if it costs more, and to pay the school's portion of the refundable pension directly to the teacher if the teacher cooperates in the scheme to keep the teacher and school in the underground economy.
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murmanjake



Joined: 21 Oct 2008

PostPosted: Wed Sep 01, 2010 1:16 am    Post subject: Reply with quote

My hagwon boss is taxing me at 3.3% but it from browsing around dave's it appears that my rate should be lower.

She's honestly confused about the whole tax process, and can't seem to find the correct information about what I should be taxed online.

She just opened this school and is a friend, so this isn't a run-around.

Can anyone point me in the direction of a Korean language site which explicitly describes the tax situation of a teacher on an E2 at a private academy(not a contractor)?

If this is standard practice I don't want to make waves, but she's been great about abiding by the rules(pension, National health insurance) and will do so for tax as well, as long as she knows how...
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imoscardotcom



Joined: 01 Sep 2010

PostPosted: Sat Sep 04, 2010 5:35 pm    Post subject: Reply with quote

so...just to be clear: if my contract actually says "employee" than I am an actual employee, and not an independent contractor, correct?
I don't understand how some schools manage to pass teachers off as independent contractors.....and ONLY public/university employees are exempt from paying Korean taxes...? Confused
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SeoulNate



Joined: 04 Jun 2010
Location: Hyehwa

PostPosted: Thu Sep 16, 2010 8:04 am    Post subject: Reply with quote

To follow up on this, what ramifications can the teacher or school face for being listed as an independent contractor?
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