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12 % tax on my final salary?

 
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mej



Joined: 22 Jan 2003

PostPosted: Sun Mar 30, 2003 11:48 pm    Post subject: 12 % tax on my final salary? Reply with quote

I finish my 1 year contract tommorrow Very Happy and have been told to expect 450,000 tax deductions Surprised , does this sound right? It works out at 12% tax.

I earn 1.9 per month + my severence (1.9) = 3.8 less 12% tax (450,000).

P.s. I'm in Masan (near Busan) incase that makes a difference.

Thanks for your time.
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Harvard Material



Joined: 25 Feb 2003
Location: Seoul

PostPosted: Mon Mar 31, 2003 12:04 am    Post subject: Tax sham... Reply with quote

No; it is far from right Mej. Go to www.hagwonreport.com and scroll to the bottom of the Legal page. There you will find a Mr. Kim's number and e-mail - Korean Taxation. Send a message and also make sure you look at the instructions to calculate your taxes per month. Should be about 30,000 on 1.9 million won.

When you start finding mistakes keep digging. Get as much dirt as you can on this dog and get your money in hand. I wouldn't leave until you get it straight. Have you kept all your paystubs? There is no reason for a 9% jump on the way out...other than to get some of your pay out of you.
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Anda



Joined: 16 Jan 2003
Location: South Korea

PostPosted: Mon Mar 31, 2003 2:16 am    Post subject: Um Reply with quote

You are being done. Besides the above place you can go to the following site. http://efl-law.com/faqanswers.htm They will answer a email question!

Tell your boss that you have contacted two legal services and to expect some calls and then watch him back peddle. Also tell him that you are informing immigration of what he is about to do to you and that you are having to contact a legal service. If you inform immigration they will stop him from employing another foreign teacher untill he adjusts to the proper tax rate. Also tell him that you are seeking advise on the matter from the local tax office. There is one in all the cities of any size here. Tell him the above politely and that you will get a visa extension untill the matter is fixed.
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eamo



Joined: 08 Mar 2003
Location: Shepherd's Bush, 1964.

PostPosted: Mon Mar 31, 2003 5:16 am    Post subject: Reply with quote

I'm afraid that might be about right. Yes, the tax on 1.9 mill is 30,000 something. But, your hogwan, like mine, is adding your severance to your final pay which puts you at 3.8 for 1 months pay. This puts you in a far higher than normal tax bracket. So, it's not just double the normal but several times the normal. This is indeed how the Korean tax system works.

However, are they actually going to pay that to the Korean tax office on your behalf? It would be very easy for them to only declare your normal pay and not mention the severance.

My Hogwon showed me a tax-calculation sheet they insist is from the tax office. My final pay should be 4mill gross. On the print-out this came to 355,000 tax.

Personally, I just don't believe them. So, I've insisted on a tax-paid receipt within 30 days from the end of my contract. That's my right by law. Keep all your pay-slips. If you take the trouble you can prove that your hogwan was cheating you.
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Captain Obvious 2.0



Joined: 09 Jan 2003

PostPosted: Mon Mar 31, 2003 3:05 pm    Post subject: Reply with quote

eamo wrote:
Yes, the tax on 1.9 mill is 30,000 something. But, your hogwan, like mine, is adding your severance to your final pay which puts you at 3.8 for 1 months pay. This puts you in a far higher than normal tax bracket. So, it's not just double the normal but several times the normal. This is indeed how the Korean tax system works.


This is the correct answer.
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Confused Canadian



Joined: 21 Jan 2003

PostPosted: Mon Mar 31, 2003 4:21 pm    Post subject: Reply with quote

You can go to the Korean Tax Calculation page at:

http://www.nts.go.kr/menu/index.asp?sub=menu5&svc=5_6&sub_menu=menu1&svc_id=743

If you enter 3800 (the last three 0's are not necessary), it will show you that the correct amount of tax for 3,800,000 won is:

301,010 won

So, you should not be paying 450,000 won in tax on your final pay, however...if those deductions include National Pension and Medical Insurance, then it may be spot on. If it's just tax, you're getting reamed.
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Zyzyfer



Joined: 29 Jan 2003
Location: who, what, where, when, why, how?

PostPosted: Mon Mar 31, 2003 6:09 pm    Post subject: Reply with quote

I'm gonna fourth that tax hike point. Happened to me, really sucks, but if they combine your severance and final paycheck together, it happens.

You could get wise and ask for them to be paid separately, but this might seem rather frugal to your boss.
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poet13



Joined: 22 Jan 2006
Location: Just over there....throwing lemons.

PostPosted: Sun Feb 05, 2006 8:37 pm    Post subject: Reply with quote

hello
i've tried to access hagwonreport.com a few times and it directs me to "you better search" ....can someone send along an alternate to that? i'm nearing the end of my contract, and have dealt with follish money games for more than eleven months. sat down last week with my boss and she talked piles and piles of nonsense, expecting to lose major parts of salary and severance on completion. I cant even get a straight answer from her when i told her i needed my tax receipt (per contract). much appreciate any links, advice any may have to offer.
poet
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poet13



Joined: 22 Jan 2006
Location: Just over there....throwing lemons.

PostPosted: Fri Feb 10, 2006 8:22 pm    Post subject: Reply with quote

damn! another post 3 years late!
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chiaa



Joined: 23 Aug 2003

PostPosted: Fri Feb 10, 2006 10:50 pm    Post subject: Reply with quote

I have no point of reference, but I wasnt to say that the severance pay is not taxed (or it is not taxed the same way as salary).

Call the tax office directly.
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mumblebee



Joined: 26 Jun 2004
Location: Andong

PostPosted: Mon Apr 17, 2006 3:36 am    Post subject: Reply with quote

My school pays people their severence one month after they leave to get around that tax hike. If you can trust your school, ask them to do the same.
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IwalkAlone



Joined: 30 Nov 2005
Location: Daegu

PostPosted: Wed Apr 19, 2006 2:57 am    Post subject: Reply with quote

mumblebee wrote:
My school pays people their severence one month after they leave to get around that tax hike. If you can trust your school, ask them to do the same.


That tax hike is an urban legend...

Knowing the tax system would tell you that severance is not taxed as income tax. Severance has it's own system of taxation which goes something like this.

First 300,000 is tax exempt and the remainder is taxed at 9%. This was for 2004 tax year so it may have changed some for 2005 filing period.
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semphoon



Joined: 18 Nov 2005
Location: Where Nowon is

PostPosted: Wed Jan 24, 2007 3:31 pm    Post subject: Reply with quote

Confused Canadian wrote:
You can go to the Korean Tax Calculation page at:

http://www.nts.go.kr/menu/index.asp?sub=menu5&svc=5_6&sub_menu=menu1&svc_id=743

If you enter 3800 (the last three 0's are not necessary), it will show you that the correct amount of tax for 3,800,000 won is:

301,010 won

So, you should not be paying 450,000 won in tax on your final pay, however...if those deductions include National Pension and Medical Insurance, then it may be spot on. If it's just tax, you're getting reamed.


That tax calculation page is now gone.

Can anyone please point me towards the new tax calculation page?
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dogshed



Joined: 28 Apr 2006

PostPosted: Fri Jan 26, 2007 4:05 pm    Post subject: Reply with quote

For US income taxes see :

http://www.eslcafe.com/forums/korea/viewtopic.php?t=66667&highlight=
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