Korean Job Discussion Forums

[aloysha]

I asked my school to explain to me why they are deducting
30% off of my salary and then applying the pension deduction.
The accounts officer , who speaks good English, could not offer
any explanation beyond �this is what the EPIK document tells me
to do�.

I asked him to show me the relevant section on the pension website
detailing this deduction to no avail. He informed me that this is
the policy for �all of Korea�, to which I informed him that SMOE
does not do this deduction.

Why is EPIK involved with altering the pension deduction amounts?
He couldn't answer that either. He did however produce a document
released by EPIK to my school, in Korean, which makes note of the deduction.

Has anyone, in EPIK, had this sufficiently explained to them and is this
deduction also being applied to your salary?

[bobbybigfoot]

Are you getting overtime?

I know my school doesn't pay pension on overtime. No doubt they are supposed to but if I press they'll likely take it away and I want the extra cash.

More than likely, your school is just trying to screw you out of some cash.

When will Koreans realize that being honest is better than being deceitful?

[wylies99]

OP- What country are you from? That matters when discussing pension.

[aloysha]

...

[OculisOrbis]

They are just screwing you and saving a little cash.

Explain that it is a mistake and they need to fix it retroactively to your first pay. DO NOT ACCEPT ANY EXCUSES OR REASONS TO JUSTIFY IT - IT IS WRONG.

The 30% reduction is for when you calculate your year end tax settlement and does not apply to anything else.

You could always tell your school you are happy to call the pension office and confirm it for them..........the number has been listed in many posts here.

of course this also means they are doing the same thing when reporting your income to pay your health insurance, too. That actually saves you a little money as well as them, but if both are reported and deducted properly you would end up with more cash in your hand at the end.

[yeremy]

Sounds to me like you need a better translator or a translator to help explain the mysterious EPIK memo.

I'm in EPIK and I do not have 30 percent taken out of my salary but my base school does follow the memos nearly to the letter. I was paid my housing allowance late, recently, because my base school had not been told (by EPIK or anyone else) to do so. It was only when I asked why I had not been paid the housing allowance that I found out the reason why and they did so that very day.

Everyone knows that Korea often does things differently and it's irritating at times, but it's their system and it's often better not to prejudge and take an uninformed (hostile) stand until you know all of the story and facts. It doesn't help to burn a bridge that you might want to walk back over after you've retreated from a near confrontation.

[OculisOrbis]

If by 'does things differently', you mean constantly F's up and manipulates the situation to take advantage of people that don't know any better - I totally agree with you.

Your school's administrator, either intentionally or inadvertently, is calculating your deductions incorrectly. Get them to fix and don't back down until they do. The only person who loses face in this is the admin who does the pay and they lose it because a) they honestly did misinterpret the process or b) they got caught cheating

I'm leaning towards b) since its their job to know and *surprise* the 'mistake' only benefits the school.

Get it fixed.

If you want to walk on eggshells and be an apologist, then either suck it up and let them continue cheating or call the tax, pension and health offices to check first before you point out their 'mistake'.

[aloysha]

Yeremy.

Do not be fooled by the �we do things differently here� mindset. You do make a
point about having the facts before you stand your ground. Oculis makes the point
that needs no repeating from me.

Pension, tax and other such government regulated issues are a diffreent kettle of fish from forgetting to do 'this or that'.

Tax and pension laws should be uniformly applied to all comparable employees of a division and the employer or account division of the office should be aware and clear about how these apply to their employers, no exception.

When it comes to money, I have no doubt that they are aware of the rules and regulations
You just have to be persistent when you are sure that you have all the relevant and factual information.

Oculis, I am certainly no apologist. Finding clear and understandable answers are difficult and needlessly tiresome.
My difficulty here is that it is not a simple consultation with the appropriate authority, because the authority often gives
unclear and/or inconsistent information.

My suspicion, particularly after I spoke with accounts officer, has turned to the negative. However, if it is the case that there is
some unknown policy that is applied to all EPIK teachers, then it only makes my battle that much harder. By the way, I just
contacted the pension office and my reported income is several hundred thousand less then what it actually is.

I will stand my ground, and I have won each and everytime I have contested an issue, in which I have been in possession of supporting facts, despite being told the contrary by the opposing party, up to the very end.

update: the deduction, as explained by the pension office is allowable.
It is done at the discretion of the employer. After much discussion and clarification, it seems that there is no recourse to dispute this deduction.

[OculisOrbis]

Sounds like you got the 'go away foreigner, hell will freeze over before i tell you that one of my pure blood kin is doing something wrong' answer or maybe it was just the 'stop bugging me, i have to get back to my starcraft game' answer . Either way its fine if you want to accept that answer. It's wrong and you're losing money.

[big_fella1]

[aloysha]

Oculis
You seem so sure. Asserting that they are wrong is pointless. Perhaps
you can kindly direct me to the relevant part of the Korean website where
it supports your claim.

You first suggest that I should suck it up or contact the pension office to find the
correct information. After I listed the pension office�s response, you suggest
that I got a dismissive answer and that I should just �get it fixed�. Not helpful.

Big fella

You say that the pension law was changed in which the deduction made by the
school is allowable. You then go on to say I should get the policy in writing
and inform my school that they made a mistake, correct

[mack the knife]

[OculisOrbis]

calculating tax on 70% of income, yes, but calculating your pension benefits on only 70% of your income, no.

it would mean that you would need to work almost 30% longer to get the same money into your pension fund. granted, it is a small difference in the short term, but it's worth fighting for since your extra contribution is small and your employer will also match your increase with their own.

for example, my school gave me my first pay statement at the end of march. it was rife with accounting liberties. they didn't deduct any tax, and I'm canadian so they're supposed to (i gave them the benefit of the doubt there). there pension and health deductions were also low. The second pay statement had tax calculated on my base salary plus the rural allowance and also my housing allowance. In other words they taxed me to the max since they don't contribute to that. Not a problem, except my health and pension were calculated on only my base salary minus the 30% TAX reduction which obviously didn't benefit me, but saved them a few won per month.

It's sorted now after I explained that if i am taxed on my total income, then my benefits should also be calculated with the same income and the 30% reduction is applied at settlement time - not monthly on everything. They/you can request your tax withholding to be whatever you/they would like it to be - you'll just have to pay at the end of the year if they didnt withhold enough each month.

aloysha: I'll look into proof for you, but like i said, if your ok with losing money then it doesnt really bother me. what bothers me is that the person after you will be expected to accept it, too. If it's a public school then there's no reason to cheap out on a few won for pension since it doesnt cut into anyone's profit margin.

EDIT: from the NPS website in the contribution section and note it says standard monthly income --- not standard monthly taxable income

Calculation of Contributions
The contribution is calculated by multiplying the insured person's Standard Monthly Income by contribution rate. Monthly Income is the amount equivalent to the monthly income reported by an employer or the insured person, within the scope of a minimum of 220,000won but not exceeding 3,600,000 won. (amounts less than one thousand won are rounded off) The Standard Monthly Income is a basis for the calculation of contribution and also is an important factor for the calculation of pension amount.

EDIT #2: just called the pension office and they backed you up on the tax law reasoning, but couldnt direct me to to anything the relating the tax law to the pension deductions so you can sleep comfortably - i give in. They did tell me that this only applies to foreigners and not koreans. i'm just glad that my school sees the negative aspect of calculating it that way and is giving me pension on my full income.

EDIT#3: it only applies to foreigners, but not koreans and then I find this in the FAQ's on the pension site under contribution rate.....Note the portion in red.

FAQ
What is the contributions rate?

For Workplace based Insured Persons, the insured persons and their employers should each make contributions amounting to 4.5% of the standard monthly income based on their earned income (for the employer of a non-corporate workplace, based on income gained from wholesale, retail, manufacturing and other businesses)(Article 75.1 of the National Pension Act).

The Individually Insured Persons should make contributions amounting to 9% of the standard monthly
income based on the income that they report. (Article 75.1 of the National Pension Act)

※ There is no discrimination in terms of the contributions rate between foreigners and Koreans. The
payment should be made no later than the 10th day of the following month. If the 10th day is a
holiday or a Saturday, however, the deadline will be extended automatically to the following business day.

[OculisOrbis]

Found these in the 2008 National Pension Act. Anyone know where I can find the Presidential Decree for Standard Monthly Income calcs?

and according to Article 3 (1) 3 am I correct in interpreting that to mean if you are two years tax free at a public institution you therefore have no income eligible to use to calculate your pension contribution for those two years - meaning no pension at all?

and following the same K-logic that its tax law so it applies - does that mean people working under their 2-year exemption should also receive full health insurance but need to make no contributions or does it mean they are ineligible for health insurance?

Article 3 (1) 3. The term "income" means earnings, not including tax-free income as determined by the Presidential Decree, gained by offering service for a specified period, or earnings, which necessary expenses are deducted from, gained by running a business and/or operating assets. In this case, the scope of the incomes depending on the category of the insured person under the National Pension Scheme - 6 - (hereinafter referred to as the "insured person") shall be determined by the Presidential Decree;

Article 3 (1)5. The term "Standard Monthly Income" means the amount determined by the Presidential Decree on the basis of the insured person�s monthly income for the purpose of calculating the amount of contributions and benefits. The calculation formula and effective period for it shall be determined by the Presidential Decree;

Article 88 (2) The pension contributions for Workplace-based Insured Persons shall be born by the insured person as a contribution and by the employer as a liability, and each of the amounts shall be equivalent to 45/1000 of the Standard Monthly Income.

Aticle 126 (1) Article 126 (Application of Scheme to Foreign Nationals)
(1) Foreign nationals who are employed at a workplace covered by this Act or who reside in the Republic of Korea, except for those as prescribed by the Presidential Decree, shall mandatorily be Workplace-based Insured Persons or Individually Insured Persons, notwithstanding Article 6: Provided, that this provision shall not apply, in the case where any relevant Act of those foreign nationals' home country does not apply to Korean nationals residing within that country with respect to a pension scheme equivalent to the National Pension Scheme under this Act.

[OculisOrbis]

Anything newer than this?

ENFORCEMENT DECREE OF
THE NATIONAL PENSION ACT
Wholly Amended by Presidential Decree No. 20507, Dec. 31, 2007
Amended by Presidential Decree No. 20679, Feb. 29, 2008

Chapter 5 Article 3 (Scope of Income) (1)2. For employees: The income obtained by subtracting non-taxable earned income referred to in subparagraph 4 of Article 12 of the Income Tax Act (including the amount which is exempt from taxation pursuant to Article 18-2 of the Restriction of Tax Reduction and Exemption Act) from income earned as referred to in Article 20(1) of the same Act.

Chapter 5 Article 5 (Standard Monthly Income)
(1) The Standard Monthly Income as referred to in Article 3(1)5 of the Act shall be, within the scope of 220,000 won up to 3,600,000 won, the amount reported by the employer in the case of a Workplace-based Insured Person or by the insured person in the case of an Individually Insured Person, from which less than one thousand won is rounded off.
(2) Notwithstanding paragraph (1), in the case where monthly income amount reported by the employer or insured person is not more than 220,000 won, or exceeds 3,600,000 won, 220,000 won and 3,600,000 won shall be the Standard Monthly Income respectively.

I'm working on interpreting this now.................

i quit. i have a headache. If anyone wants to finalize this, here's a good site for korean legislation in english:

http://www.moleg.go.kr/english/korLawEng;jsessionid=DdNkTBSarau6iQfrorOfq7RESQwiCtuClvPxh7be5YxKnIAl1vWRDCvP0vnB6ICm?pageIndex=18