Korean Job Discussion Forums

[Iago]

I have just received a contract that puts the monthly tax rate at 3.3% of the salary (2.1 million won).

Having looked at the sticky posts, the general consensus seemed to be that tax rates for this kind of salary should be under 2% and certainly no more than 3%.

So i checked it out on the Korean Government Tax website which indicated a rate of 36, 090 won tax deduction per month for 2.1 million won monthly salary.

This amounts to 1.72% tax deduction.

I asked my recruiter about this and he said that Korean tax cannot be less than 3.3% now. Seems a bit odd to me.

All the experienced teachers on Daves say less than 3.3 and my recruiter says no less than 3.3.

Does anyone know anything about this? Has Korean tax law changed recently?

Any help would be greatly appreciated.

Cheers

[ttompatz]

[Iago]

Thank you Ttompatz

I have opened the link to that tax advice website and sent them a wee email.

Then i shall be able to say to the recruiter what it is for sure (with evidence).

I have already sent them (and the school) an extensive email questioning their tax rate of 3.3% and told them exactly how i got my result of 1.72%.

I told them (in a nice way) that they must have made an error somewhere, and told them i was quite sure i was correct and they were in error. I even told them which website i used and that other experienced teachers had advised me that it should be much less than 3%.

Still they stuck to their guns and told me i was wrong and that the contract needs to be signed ASAP haha. Makes me laugh, this is not the first problem i have run into while job seeking. I am not even there yet. Better now than after i have signed tho.

Oh well, im sure something will come soon enough.

Cheers

[wylies99]

ttompatz is right- 3.3% is BS. That's the rate paid by "independent contractors" who end up getting cheated out of pension and health insurance.

[Iago]

Ok, you are right wylies99, it seems that the institute is claiming that i will be working as an "Independent Contractor", what ever that means.

Here is a quote from an email from the institute:

"I can give your assent to a proposal about the health insurance and pension. But I can't help the tax rate. When you work here as a teacher in institute, you are affiliated with independent contractors. I'm sorry about that. There are so many types of tax rate in Korea and people who are required much higher tax rate."

What does 'Independent Contractors' mean?

I guess, even if it is legit, I will just end up paying more tax on top of a normal rate of health insurance and pension.

Wylies99 suggested that as an independent contractor, i wouldn't get to/or have to pay health insurance and pension?

However i have got them to include the normal rate of health insurance and pension into the contract. So if i got rid of the pension (cos i dont think Kiwis get anything back from it anyway?) and kept health insurance (cos it s probably wise) then i would end up having to pay way less tax. Is this legal? Does it make sense? The initial contract didnt include the pension plan, but i got them to include it because i thought it was required by law.

If anyone could tell me how legit this is, or not as the case may be, it would be a great help.

For now tho, i certainly wont be thinking about signing anything.

Thanks.

[ttompatz]

Under the terms of your visa you are a salaried employee and NOT (cannot be) an independant contractor. You can't be anything but an employee or you would violate your visa.

The hakwon is a screw job. Move on.

PS. an independant contractor chooses when, where and how much to work. (Think self employed person here).

If your employer tells you when, where and how to work then you are an EMPLOYEE and NOT an independant contractor.

[cdninkorea]

Why would an employer want to list you as an independant contractor unless they're trying to weasel out of pension and medical insurance? What are the advantages for them?

If an employer is charging you the higher rate and you don't realize it until later in your contract, can you demand the money back? From who- the tax office or your employer?

[wylies99]

Advantages for them? They cheat you out of medical and pension. MANY teachers here, (even posters on this site), are registered as independent contractors and don't realize it.

[cdninkorea]

[wylies99]

Because they don't intend to pay for the pension and health insurance.

[ChciPivo]

I have a friend in Daegu who knows that her employer is pocketing her pension money but plans to file a claim with labor at the end of her contract because her job is cake and the conditions are good.
What are the chances her strategy will succeed?

[Iago]

Well the recruiter is sticking to his guns. And so am I.

The recruiter and the school are both adamant that they are in the right, that the tax should (by law) be 3.3% and that being an independent contractor is legit.

This post on the other hand is say its BS.

I have obviously taken the side of the advice from ttompatz and wylies99 and dug my feet in. However, despite this they wont back down and wont give any decent explanation apart from �employment agreements and taxes are all different in Korea�. Even the Canadian teacher is backing what the school says.

Yeah, I should drop it I know. I have decided not accept it, but I just want them to admit they are wrong. Maybe it is a pride thing, but I need to prove one way or other with 100% certainty. I have taken it this far and have to see it to its end.

What I really wanted to mention is that every contract I have been offered states a tax rate of 3.3% or even higher sometimes. How do they ever get anyone to sign them?!!?

Maybe I will post the email dialog if anyone can be bothered looking at it.

Seems odd that they all advertise 3.3% if it is illegal.

So an independent contractor agreement is illegal with an E2 visa? Is there any other sort of agreement that 3.3% is the correct tax and is not illegal.

This is crazy!

Cheers