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cazador83
Joined: 28 Feb 2006
Location: Seoul
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 Posted: Wed Nov 28, 2007 11:20 pm Post subject: How much are taxes in Korea? |
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this is a section from my contract i'm dealing with.
| Quote: |
The following taxes will be deducted from the monthly salary according to the Korean Tax Law.
a. Earned income Tax
b. Inhabitants� Tax
c. Medical Insurance
d. National Pension(Annually paid by National Pension Law) |
i know about c and d, but are A and B normal also? how much are all these worth that are coming out? im just trying to figure out how much will be "take home" out of 2.4 |
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MarionG
Joined: 14 Sep 2006
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| Posted: Thu Nov 29, 2007 1:36 am Post subject: |
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| I think earned income tax just means income tax. I don't know about the inhabitants tax, but there's something about a foreign workers tax of .5%...I don't really know much about it, just a couple of comments on here. |
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bbonthec
Joined: 07 Nov 2007
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| Posted: Thu Nov 29, 2007 3:46 am Post subject: |
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They're taxes, we all pay 'em. Both income tax and inhabitant's tax should be being deducted from all teachers' paycheques. Most contracts just don't mention the income/inhabitant's tax, because it's taken for granted. People pay taxes everywhere in the world.
The following is a breakdown of how the paycheque deductions work. I can make no promises about it's validity, but I believe it came from a reputable source. The information was supplied in a "Welcome to Korea" booklet that my previous employer's head corp office put together. As the booklet seemed pretty well researched and organized, I'll place my bets that the following information is correct:
| Dean's income tax information booklet wrote: |
Everybody in Korea pays the same income tax, based on our tax brackets. Income tax is quite small compared to most other countries.
Income tax = salary * 3%
For people that make 20 million won a year, there is no additional income tax. For people making above 20 million won a year, there is a year-end tax adjustment, which is the surplus amount * 8%. However, English teachers are not required to file a separate return, and the tax adjustment is simply factored into our regular tax deductions. Therefore, the income tax is somewhere between 3% and 4%.
This means that income tax every month will be around 60,000 won, but will be slightly more as the surplus amount is factored in. You will get a pay receipt every month, with your total income tax deduction clearly displayed.
In addition to income tax, there are the following monthly deductions:
Residence tax = Income tax * 10%
Medical Insurance = salary * 9% (4.5% paid by company, 4.5% paid by employee)
National Pension = salary * 9% (4.5% paid by company, 4.5% paid by employee) |
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Jellypah
Joined: 27 Oct 2004
Location: ROK
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| Posted: Thu Nov 29, 2007 9:29 am Post subject: |
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| bbonthec wrote: |
They're taxes, we all pay 'em. Both income tax and inhabitant's tax should be being deducted from all teachers' paycheques. Most contracts just don't mention the income/inhabitant's tax, because it's taken for granted. People pay taxes everywhere in the world.
The following is a breakdown of how the paycheque deductions work. I can make no promises about it's validity, but I believe it came from a reputable source. The information was supplied in a "Welcome to Korea" booklet that my previous employer's head corp office put together. As the booklet seemed pretty well researched and organized, I'll place my bets that the following information is correct:
| Dean's income tax information booklet wrote: |
Everybody in Korea pays the same income tax, based on our tax brackets. Income tax is quite small compared to most other countries.
Income tax = salary * 3%
For people that make 20 million won a year, there is no additional income tax. For people making above 20 million won a year, there is a year-end tax adjustment, which is the surplus amount * 8%. However, English teachers are not required to file a separate return, and the tax adjustment is simply factored into our regular tax deductions. Therefore, the income tax is somewhere between 3% and 4%.
This means that income tax every month will be around 60,000 won, but will be slightly more as the surplus amount is factored in. You will get a pay receipt every month, with your total income tax deduction clearly displayed.
In addition to income tax, there are the following monthly deductions:
Residence tax = Income tax * 10%
Medical Insurance = salary * 9% (4.5% paid by company, 4.5% paid by employee)
National Pension = salary * 9% (4.5% paid by company, 4.5% paid by employee) |
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Well, the pension's about right!
Income tax
Each month, tax should be deducted from the Employee’s monthly salary for income tax in accordance with Korean law. This can be calculated on the Korean government tax website (Korean: http://www.nts.go.kr /English: http://www.nts.go.kr/eng/default.html) and is different for different salaries. Just go to the monthly withholding tax calculator to work it out. Residence tax should also be added to this and is 10% of your tax rate (Example: W30,000 income tax per month would be W3,000 residence tax per month, total tax per month = W33,000). These are the current rates and monthly payment amounts:
Salary per Month Tax Rate Income Tax Payment per month Including 10% residence tax
2,000,000 1.60% 31,850
2,100,000 1.76% 36,780
2,200,000 1.99% 43,780
2,300,000 2.36% 54,270
2,400,000 2.67% 64,680
2,500,000 3.12% 77,880
Medical Insurance
The Employer should provide medical insurance for the Employee and agree to cover 50% of the cost. The Employee is responsible for the remaining 50% (as required by Korean Law). The current rate is 2.385% for the Employee and 2.385% for the Employer. This is the Korean Medical Insurance website: Korean: http://www.nhic.or.kr/index.html /English: http://www.nhic.or.kr/wbe/index.html. These are the current rates and monthly payment amounts:
Salary per Month Medical Insurance rate Teacher’s (Employee’s)Medical Insurance Payments per Month School’s (Employer’s)Medical Insurance payments per Month
2,000,000 2.385% 47,700 47,700
2,100,000 2.385% 50,085 50,085
2,200,000 2.385% 52,470 52,470
2,300,000 2.385% 54,855 54,855
2,400,000 2.385% 57,240 57,240
2,500,000 2.385% 59,625 59,265
Pension
Each month, four point five percent (4.5%) should be deducted from the Employee’s monthly salary for the Korean National Pension Program (as required by Korean Law) and an equal payment of four point five percent (4.5%) should be paid into it by the teacher’s Employer as well which can be refunded (9.0%) by the Korean Government once the teacher has left Korea. All teachers, regardless of nationality, are required to make pension payments but only American, Canadian, and British citizens are eligible to receive the pension payment refund at this time. Australians will be eligable for this pension refund, retrospectively, as of July 2008. This is the Korean pension service website: Korean: http://www.nps4u.or.kr /English: http://www.npc.or.kr/eng/g-index.html. These are the current rates and monthly payment amounts:
Salary per Month Pension rate Teacher’s (Employee’s)Pension Payments per Month School’s (Employer’s)Pension Payments per Month
2,000,000 4.5% 90,000 90,000
2,100,000 4.5% 94,500 94,500
2,200,000 4.5% 99,000 99,000
2,300,000 4.5% 103,500 103,500
2,400,000 4.5% 108,000 108,000
2,500,000 4.5% 112,500 112,500 |
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