Korean Job Discussion Forums

[djplatinum]

Ok, so I previously posted about my employer filing me as an individual tax payer and that is why they have not been taking pension or health insurance from my pay cheques each month and are deducting 3.3% income tax from my salary.

With some advice from posters I talked to the pension office who said that the tax office has to change the status to a worker from a individual/private business tax payer.

So, I went to the tax office today and explained the situation. The guy said he doesn't really know foreign contracts and taxes, go figure, and that because in my contract it says 3.3% will be deducted for taxes that I am classified as an individual tax payer and that the school is not breaking any law because I signed the contract. I don't have a problem paying 3.3% tax but I want my pension and their contribution to it. I know the tax should be around 1.7% based on what some other people have posted and this is exactly what it says in my contrat and how am I suppose to know that it means I am an individual tax payer which I believe I cannot be based on the E2 visa rules and regulations.

"1. Payment
1.1 The employer will pay a monthly salary of 2.4 million won for regularyly scheduled hours. Korean Income taxes (3.3%) will be withheld from the Employee's monthly salary. The Employee will follow the Korean tax law"

Funny how they have employee and not employer in there as well.

But yeah, that in no way tells me that I am signing a contract to be an individual tax payer right? or am I wrong?

The guy at the tax office said I should talk to my school about it, haha, I said I have for 8 months now. Then he said to get a lawyer because it is a contract problem because all Koreans know that if it says 3.3% then you are going to be an individual tax payer. I said I am not a Korean and don't know this and they didn't specify that in the contract and if they did I wouldn't have signed it.

So, anyone face this problem before, what should I do, who should I talk to, know any good free lawyers or cheap ones that are familiar with the situation and want to help foreigners out? Please all advice and experience is welcome.

Cheers

[CentralCali]

Politely inform "the guy" at the tax office that he doesn't have a clue as to his job and you need to speak to his supervisor. Keep up with that line until you get to the level where someone who knows what they're doing agrees to take action.

[djplatinum]

yeah i pretty much told the guy that and he said he doesn't know anything about foreigners in Korea. So, I did ask him for his manager/supervisor and he went and talked to a guy 3 desks down and he also said what that young guy said. That it says 3.3% and that means individual tax payer. I said I know but it shouldn't be and it should be changed but he said they have to go by the contract and that is why I need to get a lawyer.

Do I have to go to my local tax office? Anyone know of one that they went to where they speak good English and have dealt with this problelm before? The one young guy at the office I went to here in Goyang district (Jeongbalsan in Ilsan, beside La Festa) was the only person who spoke a bit of English.

[Typhoon]

I don't know if there has been a recent change to laws, but I have been in Korea for nearly 8 years and I have always been taxed at 3.3% and have never been an individual tax payer. I have gotten pension deductions, health care, severance pay, tax refunds at the end of the tax year just like everyother regular employee. Has there been a change recently that I didn't hear about. If not I would suggest the OP takes a Korean speaking male friend with him/her. Then both ofyou should not leave until you get some satisfactory answers. That doesn't mean answers you like, but answers that will help you understand the situation you are in, how you got there and what you can do about it. And "get a lawyer" is not a good answer. It should be get "get a lawyer to do ___________." Best of luck.

[GB]

I just had the same problem.
My boss was charging me 5% tax and no pension.

Basically, from what I researched they can register you in 2 ways:
1) Independant Contractor: This means the Withholding Tax is 3.3%.
End of Tax year you file tax return and should get some money back (??)
Your boss doesn't pay your pension or medical.

2) Employee: You pay on a sliding scale (see NTS website). It is much less tax, you don't file your own tax return, boss pays pension and medical.

My contract used 'employee'. I told my boos that I was an employee and should be granted certain benefits as such.

Cut a long story short...they register you as an Independent Contractor as it saves them alot of money...and creates alot of hassle for you.

The tax office told me to talk to my boss....I did, he still didn't want to register me as an Employee as it would mean he had to pay back pension. The tax and pension offices weren't much help...they couldn't give me even basic information. This forum really helped me gather the info.

I pressured him to give the wrongly taken tax back and then I resigned...it could not be resolved as he refused to change my status and pay pension etc as he legally should.

My advice is talk to him, be firm about getting the money / changing status. Remember we can always get another job, they need us. There are plenty of good employers out there. Goodluck.

[Adventurer]

It is normal to pay 3.3% in taxes, but not 5% in taxes.

[djplatinum]

Yeah, I also found out that it is normal to pay 3.3% tax but most of the time it is lower.

*UPDATE*

I just finished talking with my boss and the accountant. They said they are going to change my status, I just have to sign the papers that indicate all the salary deduction and changes type of stuff, of course after getting a call from the guy I talked to at the tax office helped. Little do they know that he actually wasn't much help haha. But the call scared them a bit.

They sat me down and showed that I would have to pay back the pension I have missed for the last 8 months roughly $850, which I am ok with and will get back, but then they also said that pension and medical are a package and I have to pay back $550 for the medical insurance that was missed. This pissed me off because I said that would be $1400 of my salary plus the $200 in pension, income tax and health insurance for the month and that leaves me with $800. I send back $1000 to Canada every month for my student loans, bank loan and credit card. So, I would be stuck with -$200. I said no way do I agree with that. I would have no money for an entire month. I said if I was covered by the health insurance for those 8 months then I wouldn't care about paying it back but I wasn't and it wasn't my fault since I told them to change it from the 2nd month into my contract. They should bite the bullet and just pay the $550 since it was their mistake. I said I refused to sign the form they had for me unless they paid that portion that had to be paid back or I would do all the stuff myself and get them investigated which I know they don't want. They said give them till this friday to come up with a solution so I did.

I can live without th $800 for pension on my pay cheque and live off of $500 or so for a month if I send back my $1000 for my bills, but I can't live off $0 lol. I don't know what these people think.

Oh well, we'll see what happens friday

[I-am-me]

I just went to tax office. After 2 hours of trying to get them to understand their tax policy, I finally got my tax rate down to 1.7% My employer has had me down as an Independent Contractor for the last 3 years and never bothered to pay the taxes he was taking out at 3.3%. Looks like they might investigate him now. I also spoke to another tax worker in Seoul who spoke very good english. We faxed him my contract and he finally realized I was a "salaried employee". They assume teachers are I.C's for some strange reason. If you need help, pm me and I will send you guys number in seoul tax office.

[I-am-me]

I just went to tax office. After 2 hours of trying to get them to understand their tax policy, I finally got my tax rate down to 1.7% My employer has had me down as an Independent Contractor for the last 3 years and never bothered to pay the taxes he was taking out at 3.3%. Looks like they might investigate him now. I also spoke to another tax worker in Seoul who spoke very good english. We faxed him my contract and he finally realized I was a "salaried employee". They assume teachers are I.C's for some strange reason. If you need help, pm me and I will send you guys number in seoul tax office.

[CentralCali]

Why do you have to sign any papers at all? He was messing around with the law; you weren't.

You can also tell those stupid sods at the tax office that their highest court already ruled that even if a contract says you're an independent contractor, the facts of how you're managed constitute your actual status. In other words, your boss sponsored you into the country, he dictates work time, work policy, and work payment to you. That means you are an employee.

There's no doubt in my mind that the paperwork he wants you to sign is something saying you're not going to make a stink over him shafting you.

[I-am-me]

[ontheway]

It is quite possible, common and legal to be an employee for Immigration purposes and an independent contractor for tax purposes. They are different laws and different governmental departments and they do not have to have the same rules, follow each other's logic or make sense. It's the government. It's the same in the US.

[Cheonmunka]

Frankly, if you are an independent contractor why is anyway deducting tax from your income?

[djplatinum]

Yeah Centralcali,

Do you have a link to where it actually says that anywhere? The easiest way to prove these people wrong is with proof they can actually see rather than me just telling them what is the laws in their country because they already think we are dumb foreigners and don't know their laws.

So, if you can provide a link to where it says that, it would be awesome.

[CentralCali]

Here you go! I misremembered which court it was, but the key thing is: