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Tax refund procedures
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maingman



Joined: 26 Jan 2008
Location: left Korea

PostPosted: Tue Nov 18, 2008 4:07 am    Post subject: , Reply with quote

http://www.korea.net/news/news/newsview.asp?serial_no=20080926002
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Letsbehonestaboutit



Joined: 11 Oct 2008

PostPosted: Fri Dec 19, 2008 7:34 am    Post subject: Reply with quote

sjk1128 wrote:
According to the NTS webpage, if you earn 2.2 million, your monthly tax withheld should be 45,140. That works out to about 2 %. I usually hear that hagwons withhold 3.5 % "standard tax." Your pension withheld should be 4.5%, or (in this case) 99,000. My health insurance costs me about 55,000 per month, so I'll just fly with that number - and the higher tax because I've never heard of a Korean employer deducting that little for tax (even though that number comes right off the NTS webpage). Assuming you have no other deductions (for credit card spending, education or medical expenses, dependents, etc.) and worked the whole year, the calculator - for which there is a link above - yields this


Salary 26,400,000 (2,200,000*12)
Tax Pre-paid 924,000 (3.5%, or 77,000*12)
Pension Premium 1,188,000 (4.5%, or 99,000*12)
Medical Insurance Premium 660,000 (55,000*12)

Final Tax Liability 135,720
Taxes Due -788,280

In this scenario, this is how much your boss would owe you back in your first month's paycheck the following year. Obviously, that will change if you have more deductions or more tax has been withheld. Just plug your numbers in the calculator. It takes all of 1-2 minutes to see what you should be getting back. There's also a calculator on the main webpage that tells you how much your boss should be withholding to start with....



sjk - I just want to query your monthly pension deduction calculation. You've calculated it as being 4.5% of the employee's gross salary. My public school accountant first reduced my monthly gross salary of 2,300,000 KRW by 30% (for Canadians, he said) to a new figure of 1,610,000 KRW, before taking 4.5% of the reduced figure to arrive at my monthly employee pension deduction of 72,450 KRW instead of what would've been 103,500 KRW if it had been calculated on my full gross salary amount of 2,300,000 KRW.

Which calculation is right? The NPS web site refers to the calculation being "4.5% of the "Standard Monthly Income" which is "based on" an employee's "Earned Income." What do these terms mean?
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Letsbehonestaboutit



Joined: 11 Oct 2008

PostPosted: Fri Dec 19, 2008 8:42 am    Post subject: Reply with quote

I-am-me wrote:
I spent 2 hours at tax office this week clearing up the issue of my tax rate. Both the tax worker in Suwon and worker in Seoul kept telling me I was an independent contractor. They finally looked at my contract to see that I am an "employee" and whose boss pays pension and health insurance. Now I am a "salaried worker". My tax rate went from 3.3% to 1.7%. Now I am waiting for the boss to submit my last 3 years taxes to see if I get a refund. Confused


Congratulations "I-am-me!" So does this now mean that, from now on, your employer will only be taking 1.7% in taxes from you, and not 3.3% as before? If so, how did the tax office enforce this lower percentage with your employer? (in writing or verbally, over the phone??)

I've just started to teach at a hagwon and have been told that my tax rate will, likewise, be 3.3%. I checked my salary against the "Simplified Tax Withholding Table" at the [www.nts.go.kr] site, and it appears to uphold the 3.3% that my employer is asserting.

As the "Simplified Tax Withholding Table" doesn't seem to offer any differentiation between "salaried workers" (which, like you, I am) and "independent contractors," where did the tax office arrive at the 1.7% tax rate?
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sjk1128



Joined: 04 Feb 2005

PostPosted: Mon Dec 22, 2008 5:01 pm    Post subject: Me too Reply with quote

I too was surprised to learn that, in a way, I am penalized financially for staying at the same job for more than a year. My first year at my current job, my pension deduction was based on my full salary. My second year, it was based on my taxable income the previous year - after the 30% reduction. Therefore, when my employer matches the pension funds I contribute, it pays 35k won less than it would have if calculated like the first year.

I am not particularly happy about that but have no problem with it because it is legal and only results in a reduction in my "built-in savings plan."

As I understand it, your standard monthly income for pension purposes is your earned income - that is not including housing or airfare - after your standard deductions (30% for being a foreigner) but not special deductions - that is medical, credit cards, etc. The only part I don't understand is trhat I thought this was all based on the previous year with the same employer. If you're in your first year, I thought he would be sending in 4.5% of your total earned income. Mine did.

Good luck.

BTW, has anyone noticed that the 2008 year end tax settlement calculator is not out yet? I called the tax office last week and they said it would be out this week. I wanted to get this done before leaving for vacation on Thursday. Sad
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Letsbehonestaboutit



Joined: 11 Oct 2008

PostPosted: Tue Dec 23, 2008 8:20 am    Post subject: Re: Me too Reply with quote

sjk1128 wrote:
I too was surprised to learn that, in a way, I am penalized financially for staying at the same job for more than a year. My first year at my current job, my pension deduction was based on my full salary. My second year, it was based on my taxable income the previous year - after the 30% reduction. Therefore, when my employer matches the pension funds I contribute, it pays 35k won less than it would have if calculated like the first year.

I am not particularly happy about that but have no problem with it because it is legal and only results in a reduction in my "built-in savings plan."

As I understand it, your standard monthly income for pension purposes is your earned income - that is not including housing or airfare - after your standard deductions (30% for being a foreigner) but not special deductions - that is medical, credit cards, etc. The only part I don't understand is trhat I thought this was all based on the previous year with the same employer. If you're in your first year, I thought he would be sending in 4.5% of your total earned income. Mine did.

Good luck.

BTW, has anyone noticed that the 2008 year end tax settlement calculator is not out yet? I called the tax office last week and they said it would be out this week. I wanted to get this done before leaving for vacation on Thursday. Sad


Today (December 23, 2008) I personally visited the regional NPS office at Banwoldang, Daegu, armed with my 7-months of pay stubs from my former public school employer.

An English speaking NPS employee told me that my former public school had not only under-reported my "Gross Salary" to them, but had erroneously calculated both employer (and thereby employee) NPS contributions - resulting in an under-remittance to NPS of my pension payment of between 400,000 to 500,000 KRW (all of which, as a Canadian citizen, I would've been able to claim back at a later date). My reaction - How could a certified accountant at a public school not know how to calculate an E2 English teacher's monthly pension contribution?

NPS explained that they would be contacting my former public school (from which I resigned in September due to fundemental breach of contract and breach of Korean Labor Laws) to collect the 7-months backpayments owing.

The NPS employee confirmed that the pension contribution calculation is simply 9% of an employee's "Gross Salary" (or, I guess, in other words, 9% of an employee's "Standard Monthly Income" in NPS terminology. He also confirmed that, while the responsibility for payment to the NPS office is incumbent on the employer, it's payment is shared equally by employer and employee. The calculation, in my case, was 2,300,000 (Gross Salary) multiplied by 4.5% = 103,500 KRW.

While I was at the NPS office, I thought I'd also draw NPS's attention to a previous pension matter which still rankles with me. From 2005 to 2007, I'd worked for 3-years at a hagwon who had reneged on 26 months out of 36 pension payments. The hagwon only paid 10 pension payments in the course of 3-years (for which I was refunded by the NPS when I finished my contract and returned home at the end of my 3rd consecutive year there.) It struck me how remarkably easy NPS was able to retrieve the exact details of my hagwon employer on their computer, confirm my duration of tenure there, and the 10 months of payments out of 36 payments that I had been reimbursed for. However, despite the plethora of evidence available, they either couldn't (or wouldn't) be doing anything further to enforce the hagwon to make good on the outstanding back-payments.

NPS even suggested that I called the hagwon again to ask them why they hadn't paid the outstanding payments. I told NPS I'd already done all I could, but the non-English speaking director was a vindictive and nasty woman, whose response was to throw a fit of anger whenever I raised the issue or tried to question her. The NPS employee remarked that the hagwon's director did, indeed, sound like a horrible woman, but the conversation didn't proceed further.

In this case, I just cannot understand why the NPS office wouldn't act to enforce the law against the hagwon. Korean law clearly says it is mandatory for an employer to pay pension contributions on behalf of it's (E2 Visa) English teachers, and specifies that non-payment is illegal. However, no action is taken; the NPS thereby being complicit in aiding and abetting known lawbreakers who flout their legal responsibilities. Those 26 months of contributions haven't been lost to the NPS, but to me .... and it seems I can't do a thing about it!
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phoenixstorm



Joined: 06 Mar 2007
Location: Seoul, South Korea

PostPosted: Fri Dec 26, 2008 9:26 pm    Post subject: Reply with quote

I am in the same situation, but I think what is in my favor is that its been under two years since I left my former place of employment.
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ontheway



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

PostPosted: Sat Jan 10, 2009 4:00 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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sojusucks



Joined: 31 May 2008

PostPosted: Sun Jan 25, 2009 10:27 pm    Post subject: Reply with quote

ujin821 wrote:
Got a question about my situation:

I'm working part-time as a freelancer/independent contractor (and yes, I am on an F-visa), so I'll be charged the 3.3% tax. I qualify for not being taxed at all based on the calculator, so is it possible to get the employers to tax nothing at every paycheck (by giving them proof, I'd assume), or do I have to wait until the end of the year and do a tax return? In my case, having the money immediately instead of at the end of the year would make a world of difference.


A "Global Income Tax" form exists. It verifies your yearly salary. Or ask for monthly salary statements from your school, but get them signed.
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phoenixstorm



Joined: 06 Mar 2007
Location: Seoul, South Korea

PostPosted: Mon Feb 02, 2009 5:03 pm    Post subject: Reply with quote

What is form 24-1?
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gajackson1



Joined: 27 Jan 2003
Location: Casa Chil, Sungai Besar, Sultanate of Brunei

PostPosted: Fri May 08, 2009 8:28 pm    Post subject: Reply with quote

Ok, different question:

Another poster just drew my attention to the fact that C-4 jobs (such as Uni summer camps) generally have a MUCH higher taxation rate than a 'standard' E-2.

Does anyone know if those positions are eligible for a refund, as well? I haven't worked one before, but think I am about to, and would love to know that before starting.

If it makes any difference re: the treaties, my passport is from the USA.

Cheers!

Glen
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deadhead09



Joined: 16 Apr 2009
Location: hwagok

PostPosted: Fri Jul 03, 2009 10:30 pm    Post subject: Reply with quote

here is my story. i worked for a hakwon owned by, surprise, a deviously horrible woman. i left the job after six months. she claimed to be running out of money and the school going bankrupt. she always paid me late so therefore i only have paycheck stubs for my first couple of months working there. (after the first two months she would just pay me in small deposits rather than one lump sum) is it possible for me to get a refund on the taxes i paid while working there? i have a US passport and have been working in korea for less than two years. (i never collected a refund on my taxes for my last hakwon job either.) i was paying the standard 3.3% tax rate i think. or a number thereabouts. my former school was run by one woman so no accountant. like many directors she does not seem terribly interested in following the law. nor does she speak english... seems to me she just makes her own rules and then plays dumb when questions arise.
any chance of getting money back here? please give me some advice.
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tina2cool



Joined: 09 Jul 2009

PostPosted: Wed Jul 29, 2009 8:53 pm    Post subject: VAT TAX Reply with quote

Wow this thread is incredibly helpful.

I work for a public School. My friend told me that she heard if you work for a public school you can get back VAT Tax that you pay if you've kept all your receipts which I have.

Any idea how and if I can to this?

Thanks so much!!
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sjk1128



Joined: 04 Feb 2005

PostPosted: Sun Aug 09, 2009 5:17 am    Post subject: Reply with quote

If you paid by Korean debit or credit card, you don't need the receipts. Your bank will make a statment available to you near tax time that you can give to your school's accountant for use in calculating your year end tax settlement. Sometimes they mail it to you and sometimes they just send you an e-mail about how to download it. Korea actually makes a portion of everything you spend this way deductible. It all gets calculated automatically when you plug your numbers for the year in the calculator.

Also, the schools offer a cash card for keeping up with cash transactions and the tax paid on those. You just hand it to the cashier when you pay in cash and have it swiped through the reader. Since it sounds like you don't have it, you'll need to submit copies of your receipts to the accountant and talk about if there's another option for getting your deduction. It wouldn't hurt to ask for the cash card now if they still issue them for NETs.

Good luck, and keep us posted.
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PaperTiger



Joined: 31 May 2005
Location: Ulaanbataar

PostPosted: Wed Feb 17, 2010 3:54 am    Post subject: Reply with quote

Is there an accounting service (affordable) that can help me figure out how to make next year less of a headache? This year is the first year I ever ended up owing...mostly due to the way my school did my deductions. Apparently they didn't deduct enough and now I have to pay the remainder of what I owe out of my January salary. Somehow, all my previous employers were able to get the information they needed to do my taxes correctly, but now that I work for a "reputable" private school they can't get on the horn with the NTS and get the information they give to any Kim, Jeong, or Lee that comes calling. If you have a family to support and no trust fund or savings to fall back on, you can appreciate the difference that having 400 bucks less than you usually have to budget makes.

I talked to some guy at the tax office (still not sure that was a good idea...just before our contracts for next year get signed) and he said that my school did everything by the book. Actually, there are two ways to do it...the regular way where they take out enough to cover your taxes each month, and then there's stupid way where they take out the bare minimum and then hammer you at the end of the year with some monstrous lump sum payment taken out of your pay.

This same tax guy also told me they don't have any idea how much my income is or how much I've paid until my employer submits the documents. So, the whole year long...my school is making deductions for taxes they haven't even paid...and then at the end of the year they start bending me over for this tax and that tax before they've even figured out what I owe.

My question is this: where's that money go if not to the tax office? No one can explain this in a way that makes sense. It's making me sick.
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pkang0202



Joined: 09 Mar 2007

PostPosted: Wed Mar 03, 2010 6:54 am    Post subject: Reply with quote

How long until you get your tax refund?

I gave all my paperwork to my school's accounting office a month ago.

Is there a way to check the status of your tax refund?
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