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losing_touch
Joined: 26 Jun 2008
Location: Ulsan - I think!
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 Posted: Tue Feb 17, 2009 7:28 am Post subject: Taxes - Percentage - Amounts - Apartment - Airfare - etc. |
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Let me preface this by stating that I have read a lot of information about this subject. I am having some issues with tax that I thought had been sorted out.
Current Tax Rate - 6%
Clearly, this is not desirable! Well, I thought everything was sorted out with my director. A little while ago, my co-workers talked to her about the tax rate. They had printouts detailing the Simplified Tax Withholding amount listed on the NTS website. The director called up another hagwon owner in the area and confirmed that this is way too high. She also went online and checked it out herself. She said she would refund the money on Monday for the duration of our contracts. In the spirit of the good news, I spent a fair amount of money this weekend. This is a warning that one should never count their money before it is in their hand.
On Monday, she informed me that her rate of 6% is correct because the housing should be included in the figure and that would change the tax rate. She went so far as to show the other teachers some sort of table she has claiming that we should be paying 17%. She insists that she is doing us a favor by charging us less. She thinks that she would not have been able to get foreign teachers here by charging the proper rate of 17%.
When she brought this argument to my attention, I didn't have the resources available to hold an intelligent conversation about it. She then informed me that she would make the calculations at the end of our contracts and ask for more or refund us money depending on what she comes up with. This doesn't sit well with me, so I said I would look into it.
So, I went on the website and shot them off a message to see what I got back. Here is what I sent them:
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| To whom it may concern, I am having some problems figuring out the tax system here in Korea. I currently work as an English Teacher in the Dong-gu area of Ulsan. I am on an E-2 visa and work for a private academy (hagwon). I currently make 2,300,000 won per month. My employer is deducting 6 tax from this sum. In addition, other deductions for pension and health insurance are being taken out. 6 reflects the tax I am being charged. This is much greater than the withholding table calls for. I also support my wife. She doesn't work. My employer claims that I am wrong. What should my correct tax be? How can I show this to my employer? Should benefits like my apartment be included in the calculation? My employer pays 400,000 won for my apartment as well. |
Here is what they wrote back:
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Dear Sir/Ma�am,
Thank you for visiting the National Tax Service website. The following is the reply to your inquiry dated Feb. 16, 2009.
Taxation of income tax for foreign ESL teachers differs based on their employment status. Employment status is determined by the specific conditions of the contract between you and your employer, and it is broken into two types: employee and independent contractor (�free-lancer�).
1) If you are a resident, you are taxed as follows:
- If you are an independent contractor (free-lancer), the payer must withhold taxes every month at a rate of 3.3 (0.3 resident surtax included). In this case, you are responsible for filing global income tax return in the month of May of the following year, and any amount of tax withheld will be credited to you as prepaid tax. You may be able to claim a tax refund on your global tax return if the prepaid tax amount is greater than your final tax liabilities.
- If you are an employee, your employer must withhold the monthly income tax calculated by using the Simplified Tax Withholding Table. Your income tax liability for the year is settled and finalized in February of the following year through the year-end tax settlement completed by your employer.
And benefits for house is also taxable income.
Please visit our Q&A or FTAS webpage again or call 82- 2-397-1440 for further questions.
Thank you. |
My contract states that I am an employee. So, I should be getting the rate on the table, right?
Is airfare to be included in this figure as well?
How would you go about handling this?
My boss is agreeable. She wants to do the right thing, but she isn't sure what that is. I would like to get all of this in writing. I have looked at the tax site extensively. It seems as if I can get a tax person to swing by and explain everything clearly.
Thoughts? |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Tue Feb 17, 2009 8:41 am Post subject: |
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Here is what they wrote back:
Quote:
Dear Sir/Ma�am,
Thank you for visiting the National Tax Service website. The following is the reply to your inquiry dated Feb. 16, 2009.
Taxation of income tax for foreign ESL teachers differs based on their employment status. Employment status is determined by the specific conditions of the contract between you and your employer, and it is broken into two types: employee and independent contractor (�free-lancer�).
1) If you are a resident, you are taxed as follows:
- If you are an independent contractor (free-lancer), the payer must withhold taxes every month at a rate of 3.3 (0.3 resident surtax included). In this case, you are responsible for filing global income tax return in the month of May of the following year, and any amount of tax withheld will be credited to you as prepaid tax. You may be able to claim a tax refund on your global tax return if the prepaid tax amount is greater than your final tax liabilities.
- If you are an employee, your employer must withhold the monthly income tax calculated by using the Simplified Tax Withholding Table. Your income tax liability for the year is settled and finalized in February of the following year through the year-end tax settlement completed by your employer.
And benefits for house is also taxable income.
Please visit our Q&A or FTAS webpage again or call 82- 2-397-1440 for further questions.
Thank you. |
It appears you do have to add housing to your salary in determining your appropriate tax level.
Damn.
I hope someone else can show this is not correct.
Actually, this is still not clear.
Does "benefits for house" mean a cash housing allowance or does it also include employer provided and paid "free housing."
How can we know in a country where not one single Korean can accurately speak or write in the English language. |
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losing_touch
Joined: 26 Jun 2008
Location: Ulsan - I think!
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| Posted: Tue Feb 17, 2009 6:31 pm Post subject: |
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| Yes, I am slightly confused. I haven't heard of such a thing. |
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losing_touch
Joined: 26 Jun 2008
Location: Ulsan - I think!
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| Posted: Wed Feb 18, 2009 9:48 am Post subject: |
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| anyone? |
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