Korean Job Discussion Forums

fakeplastiktree · Joined: 15 Oct 2007 Location: Northeast Seoul

I know this topic has been discussed ad nauseam but the search function on this site sucks and I'm not sure what to do about my situation.

I've been working at a hagwon for 2.5 months now. After I got my first month's paystub, I was concerned about the lack of deductions for health insurance and pension. I posted a message on here asking a question about it and found out that I was also charged too much tax: 3.3% on a 2.0 million salary. I spoke with the hagwon director (foolishly ONLY about the pension deduction and not the tax issue) and she told me she would call the pension office. Fast forward to second month's paystub: this time there was a deduction for health insurance but still no pension. So I asked her again and she assured me, once again, that she would call the pension office. Upon searching for information here, it seems that 3.3% is the tax rate for "independent contractors".

With my third month's pay only two weeks away, I want to address this problem before it gets more muddled. So my questions are:

1. Is calling me an "independent contractor" what gets her out of having to pay me pension? (i.e. Is it safe to assume that if I was getting pension deductions, she wouldn't be able to claim me as an IC?)
2. Is she legally allowed to sponsor me for an E-2 visa and claim me as an "independent contractor"?
3. What should my recourse be at this point? I don't want this to get nasty but with the language barrier and all, I can only imagine when I tell the director that I know what she's doing she'll probably just play dumb or assure me that this is the way it works.

Any input on this matter is greatly appreciated!!

hagwonnewbie · Joined: 09 Feb 2007 Location: Asia

From my understanding, E-2's pay 3.3 -3.5 % tax per pay check and are entitiled to a refund of most of that at the end of the year. That's what happened to me last year. I did have to call the tax advocate for foreigners to make that happen. There is sticky on this you can refer to come 8 or 10 months from now.

Keep your stamped and signed pay stubs.

You should be paying 4.5 % of your paycheck into Pension and getting double that back when you go home if you're from most countries. I know New Zealand doesn't get it, so if that's your home country, you're better off not paying into it.

Your boss may just be lazy or avoiding the inevitable. Keep pushing and consider going to the pension office if there is still a problem. Did you recieve a medical insurance card? If so, then your boss is likely paying your taxes.

I-am-me · Joined: 21 Feb 2006 Location: Hermit Kingdom

Zaria32 · Joined: 04 Dec 2007

By definition, an E-2 visa holder can NOT be an independent contractor. Also, whoever wrote that as a hogwon teacher our rate is 1.7...not true. The rate is based on how much you earn, not your job. 3.3% (independent contractor rate) is way too high...at 2.4 million won, no dependants, I pay 2.17%. At 2.1 or 2.0 or 2.3 the rate would be lower, at 2.5 or 2.6 it would be a bit higher.)

Roch · Joined: 24 Apr 2003 Location: Seoul

jangsalgida · Joined: 11 Jan 2006

Flash Ipanema · Joined: 29 Sep 2006 Location: Seoul

glimmer · Joined: 01 Feb 2008

Young FRANKenstein · Posted: Sat Jun 14, 2008 7:25 pm Post subject:

Zaria32 · Joined: 04 Dec 2007

Someone wrote that if you are set up with health insurance, then you're probably getting pension too... huh? Say what?

Yes, often the two things, pension and health insurance, have people sharing an office, but they certainly don't cross reference. Although probably the majority of schools and hogwons follow the law on health insurance, I'd say (just a guess) that less than half that amount pay into pension.