|
Korean Job Discussion Forums
"The Internet's Meeting Place for ESL/EFL Teachers from Around the World!"
|
| View previous topic :: View next topic |
| Author |
Message |
highdials5
Joined: 13 Oct 2008
|
 Posted: Sat Aug 08, 2009 6:15 pm Post subject: Typical recruiter BS... |
 |
|
Hi,
Not sure why I'm posting this now as I've been in Korea 8 months now without any major problems, but perhaps the following email conversation could help newbies understand the absolute BS that recruiters will come out with.
Read the email at the bottom first, and work your way back up...it's quite long! It's from last year, before I first came to Korea and before I'd ever taught. I'm glad I did my research and caused him to lose face! 
The tax rate issue was his downfall, as he sent me a link proving that it was 3.3%, but the link clearly stated that this was for an independent contractor!
Anyway, just thought I'd share.
Rich
| Quote: |
Hi Jae,
Regarding this quote:
"Now it seems that what I told you yesterday was the other way around. I said that an E-2 visa holder is regarded as "an employee",but now I think that they are actually regarded as an independent contractor."
If an E2 visa holder is considered an "independent contractor," and NOT an "employee," then why does the contract you attached say:
The Employment Contract (hereinafter "Contract") is made by and entered into between the Superintendent and/or school principal of the Gyeonggi Provincial Office of Education (GPOE), of Republic of Korea (hereinafter "Employer"), and the GEPIK teacher, (hereinafter "Employee").
Also, are you saying that the tax calculator on the Korea National Tax Service website is incorrect?
If you enter your salary, it gives you the total amount of tax you should be paying which according to you should be a minimum of 8%.
Why does the calculator say that on a 2.3 million won salary, you should be paying less than 2% then?
I think we have established now (certainly, I have) that an E2 visa holder is an Employee, as proved by the language in the contract, as outlined above. Therefore tax should be deducted on a sliding scale, depending on how much you earn, rather than the fixed rate of 3.3%.
And why isn't there any mention of a Pension Scheme in my contract? I thought that it was compulsory? Compulsory that is, unless you are an Independent Contractor.
I really hope that the Canadian girl I should be replacing at ______ School has been contributing to a Pension Scheme, and is aware that by contributing throughout the year she is/would have been entitled to a rather large repayment at the end of her time in Korea...
I'm not even going to discuss the apartment situation as it is irrelevant.
Needless to say, there is no way that I am going to sign the contract.
I do appreciate your time and effort in trying to find me a job, but I think I would be better served taking on a more direct approach, minus any recruiters.
Thanks again,
Rich
Date: Sun, 12 Oct 2008 22:43:18 +0900
From:
To:
Subject: Re: Independent Contractor?
Hi Rich,
As it is Sunday today, I can not contact anyone at the tax office regarding your concern,but I will get back to you tomorrow with more accurate and solid answer for your question.
Now it seems that what I told you yesterday was the other way around. I said that an E-2 visa holder is regarded as "an employee",but now I think that they are actually regarded as an independent contractor. However, it is still true that no E-2 visa holder can work for more than 1 employer. There are many different types of income taxes in Korea and the calculation you made from the web page of tax office is not the income tax applying to native English instructors in Korea. I am still 100% sure about that income tax for an English instructor is 3.3 %. Also income tax for an employee in Korea starting from 8% is certain and this will be the key thing I will prove tomorrow.
You have argued that Korean employers register native English instructors as independent contractor to prevent them having to pay pension,but it can not be true. For your understanding, I have attached a public school's contract to this email. I can say that this contract is the latest one as it is for the second semester which started September this year.
Before I explain the contract further, please know that this contract wasn't written by _____,but the Gyeonggido education board which first introduced English programme with native English speakers to Korea. Most public schools in and around Seoul use this contract and obviously it must have been written after a discussion with relevent parties such as immigration office, local government and tax office etc. As all public school in Korea is run by Korean government, all the information written in the contract must be correct.
Now let's have look at clause 1 on article 8 in the contract, it is cleary stated that income tax is approximately 3 %. If we follow the clause further, it also mentions about the pension scheme. Please understand that income tax exmption is only valid for instructors working for public schools not for private academies. Actually I have been working on this employee and he is coming to Korea Wednesday next week. The reason why I didn't find you this position is because of the salary. All Korean school has to follow the salary table made by local education board and this employee is regarded as a category 3 teacher because he olnly has got a BA.
To get back to the point, if the income tax you calculate was correct, it should have been written approx.2% in this contract, but as you can see, it says approx.3%. This means that an E-2 visa holder is actually regarded as an independant contractor. That's why the appendix I sent you yesterday says that there are two different status of English teacher.
Like I said previously, due to the lack of native English instructor, Korean government couldn't really apply income tax as an employee to native English instructors. Because it was certain that such a high income tax would deter instructors from coming to Korea. So the government came up with an idea that although E-2 visa holders are regarded as independant contractors,but they should have all the same benefits as employees have got.
As long as I prove how much income tax an employee pays per month, I
2008/10/12
Hi Jae,
Your last reply really did start to worry me.
I think it is clear that I've done my research, and I am not going to blindly sign any old contract, so I would prefer you to be honest with me.
For example, if you had said that technically it is illegal for E2 Visa holders to be classed as Independent Contractors, but most hagwons in South Korea do it to prevent them having to pay Pension, then I would have had a lot more respect for you.
But where exactly did you get the 8% figure from?? Like I said, I have done my research on this and as an EMPLOYEE on 2.3 million won a month, I should be paying just less than 2%:
Monthly wage & Salary Income: 2,300 (in thousands)
The number of Dependents: 1 person
Monthly Income Tax: 44,290
= 1.925 %
http://www.nts.go.kr/eng/help/help_52.asp?top_code=H001&sub_code=HS05&ssub_code=HSE2
As for the supposed agreement "between the Korean education board and tax office which allows all E-2 visa holders to pay for income tax of 3.3%" - well, to say that I find it hard to believe is an understatement. What a coincidence, the "agreement" came up with a figure that is exactly the same as the figure for an Independent Contractor!
If you can provide evidence that I am wrong, then please point me in that direction...
I am disappointed with this situation because quite frankly, 3.3% tax is low by anybody's standards. I wish I could pay 3.3% in the UK! It's the principle of the matter. How can I trust what you say when you give me the line about 8% being the minimum tax rate for an EMPLOYEE?
I also have doubts about the Health Insurance situation - am I right in thinking that an INDEPENDENT CONTRACTOR pays less than an EMPLOYEE? If so then shouldn't the 5% figure be lower, or would I be unwittingly paying the employer's half as well?
Additionally, I gather that Independent Contractors are not entitled to Severance Pay? Even though it states this on the contract? I'm not a psychic, but I envisage problems at the end of this 12 month contract with regards getting the bonus...maybe I would be conveniently sacked after 11 months anyway?
Finally, and I appreciate that this email is turning into a long one, I have been told that the apartments are not the ones shown in the photographs provided. I was prepared to overlook this matter because it is apparently better than most apartments for hagwon teachers in Korea. But it's another example of dishonesty before I've even signed a contract...would air conditioning be included, afterall?
I feel disillusioned with South Korea to be honest, and that's before I've even signed a contract, let alone stepped on the plane.
Is there anything you'd like to add?
Rich
Date: Sat, 11 Oct 2008 18:37:34 +0900
From:
To:
Subject: Re: Independent Contractor?
Hi Rich,
As long as I know, an independent contractor has got different types of visa such as F-2, F-3 and F-4 and can work for more than 1 employer. Income tax rate for an independent contractor is 3.3 % per month,while it is minimum of 8% for an employee.
An E-2 visa holder is supposed to work for only one employer and he/she is regarded as an employee.So technically saying the person has to pay for income tax in accordance with the simplified tax table made by the tax office. Depending on how much you get paid, it varies,but the minimum rate starts from 8%.
However, due to the lack of native English instructors in Korea, an agreement has been made between the Korean education board and tax office which allows all E-2 visa holder to pay for income tax of 3.3%. If we look at the figure carefully, actually 3% of you monthly salary is your income tax,but the tax office regards an E-2 visa holder as a resident because the visa valid for a year. So a residence tax of 0.3% is added to the income tax and that makes 3.3 %.
In any case, as long as you work in Korea, your income tax can not be lower or higher than 3.3%. If my information is wrong, I will take all the responsibilities.
I just hope that I have given you enough answer for your question regarding income tax.
Please let me know, if everything is clear with you now. So I will pass you my address for your documents.
That's all for now and have a good weekend.
Many thanks.
Jae
2008/10/11
Hi Jae,
Thanks for your reply.
Please can you tell me the difference between an "employee" and an "independent contractor?" My research seems to indicate that it is illegal to be an "independent contractor" on an E2 visa...
Hope you can clear this up...
Rich
Date: Fri, 10 Oct 2008 18:42:39 +0900
From:
To:
Subject: Re: amended contract regarding health insurance
Hi Rich,
Hope all is well with you. First of all, it is naturally understood that you could ask me the things which you are unsure about. Honestly If I were you, I would do the same. Therefore I do not mind answering your questions at all.
Let's begin with your first question. What you understand about the section 5 is correct. If you want to quit the position before six months, you are supposed to pay back 50% of your airfare which you received on your arrival to the employer. This condition doesn't only apply to this academy,but also most of private academies and even public schools. As it is an universal condition in Korea, there is nothing much I could do about this. If you worry about not getting back the remaining 50% of your airfare at the end of your contract, I can give you my guarantee in writing.
Secondly, Korean Medical insurance union is equivalent to NHS in England and it is a public organisation run by Korean government. As long as you work in Korea with a work visa, you have to be registered with the body. The exact figure of monthly medical insurance is about 5% ( as the figure increases slightly higher every year, I use a word " about" ) of the monthly salary and the employer and employee pay for the insurance 50% each. Now I totally agree with you that these things should be written in your contract.
Thirdly, regarding a pension scheme, please find the attached information which I brought from Korean national pension service. To find more accurate information on this matter, you could also visit the NPS's website on http://www.nps.or.kr/
Fourthly, it is correct that income tax is 3.3 %. To make everything clear, here is the link to the Korean national tax service -
http://www.nts.go.kr/eng/korean/korean_03.asp?top_code=K001&sub_code=KS03&ssub_code=KSB3
If you look at the bottom of this web page, you could find appendix. Then please read page 4 of it.
Finally, Of course, your accommodation will have air conditioning. A pay slip will be provided each month so that you could clearly see what the deductions are. As you realise, it will be only 2.5 % and 3.3 % for the medical insurance and income tax respectively.
So now I have just amended the medical insurance part in your contract and attached to this email. I hope you to feel better with your contract this time.
If you have any further enquiries, please contact me anytime.
Many thanks.
Jae
2008/10/10
Hi Jae,
Thanks for the quick reply, and for making the amendments...I appreciate your effort and detailed replies.
There are just a couple more things that I'd like clarifying please:
1. Airfare.
I don't fully understand the language used in Section 5. Is it saying that if I quit before 6 months, I will have to pay the academy the reimbursed 50%? But if I quit after 6 months, I won't have to pay anything?
To be honest I would prefer a 100% reimbursement on arrival, then if I quit before 6 months I will pay back 50%, and if I quit after 6 months then I don't have to pay anything.
2. Health Insurance.
What is the "Korean Medical Insurance Union?" I thought that it was compulsory for all employees to be registered with the NHIC? I would also like an exact figure included in my contract, e.g. I believe both myself and the employer have to pay 2.54% of my salary each month?
My final issues with the contract are as follows:
- There is no mention of a Pension Scheme in the contract. I understand that the rules are different for British citizens, but could you perhaps explain a little about that?
- Will I be receiving a payslip each month with information about my salary, deductions etc on it?
- Is 3.3% tax correct? I have read that it should be closer to 2%?
- Will my apartment have air conditioning?
This pretty much covers my areas of concern! You must be getting tired of me emailing with queries! Please understand that this will be my first teaching position in a foreign country, and I just want to make sure that I get a fair deal...
Thanks a lot,
Rich |
Last edited by highdials5 on Sat Aug 08, 2009 6:48 pm; edited 1 time in total |
|
| Back to top |
|
 |
Scouse Mouse
Joined: 07 Jan 2007
Location: Cloud #9
|
| Posted: Sat Aug 08, 2009 6:28 pm Post subject: |
|
|
| You posted the name of the GEPIK teacher. Not nice. |
|
| Back to top |
|
|
highdials5
Joined: 13 Oct 2008
|
| Posted: Sat Aug 08, 2009 6:51 pm Post subject: |
|
|
| Scouse Mouse wrote: |
| You posted the name of the GEPIK teacher. Not nice. |
Thanks for pointing that out, I've edited my original post. |
|
| Back to top |
|
|
Big Mac
Joined: 17 Sep 2005
|
| Posted: Sat Aug 08, 2009 7:13 pm Post subject: |
|
|
What a bunch of crap. I work at a public school and I pay the amount listed on the National Tax Service's website. I've always paid that amount in every job I've had in Korea.
Sometimes I think recruiters, and many Koreans for that matter, just pull things out of their asses because they're too lazy to actually find the real answer or they are just too embarrassed to tell you that they don't know the right answer. |
|
| Back to top |
|
|
kirsi
Joined: 29 May 2009
Location: dongtan
|
| Posted: Sat Aug 08, 2009 8:17 pm Post subject: |
|
|
so how did you end up finding the job you are currently at?
big mac - is the correct tax percentage written in your contract? i have never seen below 3.3% in a contract and have seen up to 10 percent..  |
|
| Back to top |
|
|
highdials5
Joined: 13 Oct 2008
|
| Posted: Sat Aug 08, 2009 8:26 pm Post subject: |
|
|
| kirsi wrote: |
so how did you end up finding the job you are currently at?
big mac - is the correct tax percentage written in your contract? i have never seen below 3.3% in a contract and have seen up to 10 percent.. |
I just applied directly to academies, and decided to work for a larger chain since it meant I would get a decent apartment and always be paid on time. Whilst I've had a bit of stress at times, overall it's been a pretty smooth 8 months considering what others go through. Having said that, I won't be resigning and intend to go somewhere else early next year, probably Taiwan or Japan.
Yeah, it's often amusing when a Korean doesn't know the answer to something and/or is backed into a corner. Rather than hold their hands up and admit they were wrong/didn't know, they panic and spout absolutely anything to try and get out of the hole, but it has the opposite effect. After working here for 8 months, I can now understand to some degree why the recruiter acted that way. |
|
| Back to top |
|
|
TheUrbanMyth
Joined: 28 Jan 2003
Location: Retired
|
| Posted: Sat Aug 08, 2009 8:59 pm Post subject: |
|
|
| Big Mac wrote: |
What a bunch of crap. I work at a public school and I pay the amount listed on the National Tax Service's website. I've always paid that amount in every job I've had in Korea.
. |
Same here. |
|
| Back to top |
|
|
Big Mac
Joined: 17 Sep 2005
|
| Posted: Sat Aug 08, 2009 9:18 pm Post subject: |
|
|
| kirsi wrote: |
so how did you end up finding the job you are currently at?
big mac - is the correct tax percentage written in your contract? i have never seen below 3.3% in a contract and have seen up to 10 percent.. |
Most of the better employers will not state the tax percentage in the contract. There are a couple of reasons for this.
First, the tax percentage changes depending on your salary. The more money you make, the higher the tax you pay. Since employers use the same contracts for multiple employees, they want to keep it generic.
Second, the government has been known to change the tax rates throughout the course of a year. In fact, since I've been here I've noticed that the tax rates have actually gone DOWN slightly. Employers are hesitant to list the specific tax rate because they know there is a possibility it will change and they don't want the employee to get mad when they have to change it.
If you see a contract where they are telling you that you must pay 3.3 per cent it is because the employer plans to register you with the tax office as an independent contractor, despite the fact that everyone on an E-2 Visa is an employee. It is legal and they are allowed to do it, no matter how dumb it seems.
Independent contractors pay a flat tax of 3.3 per cent and that rarely changes. Some employers use that status to get around paying pension. Some employers use it as a way to pocket all the tax money, because when you are an independent contract worker, YOU are expected to pay your own tax, not the employer. So they will often pocket the money, while the employee is oblivious to the fact it isn't going to the tax office and that they owe money. The tax office rarely goes after you for that money though...they're too lazy.
Then there are some hogwan owners who register you as an independent contract worker, charge you 3.3 per cent tax, pay it to the tax office and do everything else above board. In that case, they are not doing it to be dishonest, they just don't know any better. I think many of them just do it because that's what their hogwan association told them they should do. |
|
| Back to top |
|
|
highdials5
Joined: 13 Oct 2008
|
| Posted: Sat Aug 08, 2009 9:24 pm Post subject: |
|
|
| I remember spending an entire weekend back home in the UK researching about employees and independent contractors. Whilst it gave me a headache, I felt so much clearer afterwards about the various tricks of the trade that hagwons use, and also what should be included in a contract. |
|
| Back to top |
|
|
Scouse Mouse
Joined: 07 Jan 2007
Location: Cloud #9
|
| Posted: Sat Aug 08, 2009 9:40 pm Post subject: |
|
|
| Big Mac wrote: |
| Some employers use it as a way to pocket all the tax money, because when you are an independent contract worker, YOU are expected to pay your own tax, not the employer. So they will often pocket the money, while the employee is oblivious to the fact it isn't going to the tax office and that they owe money. The tax office rarely goes after you for that money though...they're too lazy. |
I'm sorry, but that part is simply not true. As an independent contractor you may sub-contract to a company. If you do this, the company MUST withold 3.3% and pay it as your tax. THEY are liable for this, not you. It is in place to stop independent contractors from under-representing their income. Of course, some employers may try to keep this cash, but you are not legally responsible for it.
I recently did a ton of research into this as I am doing a lot of sub-contracting work at the moment (F-visa) and I wanted to make sure my bases are covered. This research included discussing it with the tax office, and was not based on 'hearsay presented as truth' which is typically found on Korean ESL sites.
Do a little googling and call the tax office yourself. They do have some awesome English speakers available to help you 
PS: At the end of the tax year, you may claim a rebate if you have overpaid, and this is where you can report any employment you have undertaken and stick it to the bosses who have underpaid  |
|
| Back to top |
|
|
saw6436
Joined: 16 Jan 2003
Location: Daejeon, ROK
|
| Posted: Sat Aug 08, 2009 11:12 pm Post subject: |
|
|
| I'm in the same boat as scouse mouse. S-M is correct on the independent contractor bit. |
|
| Back to top |
|
|
Big Mac
Joined: 17 Sep 2005
|
| Posted: Sun Aug 09, 2009 5:02 am Post subject: |
|
|
Hey Scout Mouse,
OK, fair enough. Maybe I was confused because when I called the tax office about a problem with my first employer in Korea, that's what they told me.
Basically they said my boss had registered me as an independent contractor instead of an employee. He deducted tax at varying percentages from my pay, but only paid one month's worth to the tax office. They told me I was responsible for paying it because he hadn't (I haven't worked there for three years). I of course told them I'm not paying it, because my boss took the money from me and should have paid it. I provided all my pay slips and bank records to the tax office and they are supposedly going to go after my boss for the money. It's been a few months since I sent in the info though and I haven't heard anything back.
So if you have better info on that, I stand corrected. It's very confusing stuff and difficult to get straight answers out of Koreans sometimes. |
|
| Back to top |
|
|
Scouse Mouse
Joined: 07 Jan 2007
Location: Cloud #9
|
| Posted: Sun Aug 09, 2009 6:31 am Post subject: |
|
|
| Big Mac wrote: |
| I provided all my pay slips and bank records to the tax office and they are supposedly going to go after my boss for the money. It's been a few months since I sent in the info though and I haven't heard anything back. |
If you were supposed to be liable for it, they would not be chasing your boss. By providing your pay slips, you have shown that you did all you are supposed to, and you boss is the shady one. You are not at fault. |
|
| Back to top |
|
|
ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
|
| Posted: Sun Aug 09, 2009 6:43 am Post subject: |
|
|
| Scouse Mouse wrote: |
| Big Mac wrote: |
| Some employers use it as a way to pocket all the tax money, because when you are an independent contract worker, YOU are expected to pay your own tax, not the employer. So they will often pocket the money, while the employee is oblivious to the fact it isn't going to the tax office and that they owe money. The tax office rarely goes after you for that money though...they're too lazy. |
I'm sorry, but that part is simply not true. As an independent contractor you may sub-contract to a company. If you do this, the company MUST withold 3.3% and pay it as your tax. THEY are liable for this, not you. It is in place to stop independent contractors from under-representing their income. Of course, some employers may try to keep this cash, but you are not legally responsible for it.
I recently did a ton of research into this as I am doing a lot of sub-contracting work at the moment (F-visa) and I wanted to make sure my bases are covered. This research included discussing it with the tax office, and was not based on 'hearsay presented as truth' which is typically found on Korean ESL sites.
Do a little googling and call the tax office yourself. They do have some awesome English speakers available to help you
PS: At the end of the tax year, you may claim a rebate if you have overpaid, and this is where you can report any employment you have undertaken and stick it to the bosses who have underpaid |
Actually, there is a threshold for tax withholding for independent contractors based on hours worked and pay level. Under a certain number of hours per week or month and under a certain total pay level, the business that has hired the contractor legally does not have to withhold or report anything. |
|
| Back to top |
|
|
ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
|
| Posted: Sun Aug 09, 2009 6:50 am Post subject: |
|
|
| Big Mac wrote: |
Hey Scout Mouse,
OK, fair enough. Maybe I was confused because when I called the tax office about a problem with my first employer in Korea, that's what they told me.
Basically they said my boss had registered me as an independent contractor instead of an employee. He deducted tax at varying percentages from my pay, but only paid one month's worth to the tax office. They told me I was responsible for paying it because he hadn't (I haven't worked there for three years). I of course told them I'm not paying it, because my boss took the money from me and should have paid it. I provided all my pay slips and bank records to the tax office and they are supposedly going to go after my boss for the money. It's been a few months since I sent in the info though and I haven't heard anything back.
So if you have better info on that, I stand corrected. It's very confusing stuff and difficult to get straight answers out of Koreans sometimes. |
If your employer has withheld money from your pay for taxes then he is legally required to pay it in whether you are an independent contractor or an employee.
In the US and, according to your own story, also in Korea, the independent contractor and the employee can be forced to pay again if the employer or contracting business does not pay in the money. So, if the tax office cannot collect from your former boss, you may yet have to pay.
That's right folks:
In the US, if your employer withholds all your taxes and social security from your pay but does not remit the money to the IRS, then the employee can be required to pay it again. Furthermore, the IRS can force any employee of the company to pay the entire amount, including the employer's share, for all unpaid withholding taxes for every employee. They can do this unilaterally and withhout a court hearing. The employee has to sue the IRS to get the money back - in tax court - and prove that they should NOT have to pay for the others. Even secretaries have been forced to pay for an entire company's unpaid withholding tax liability. In one notorious case a secretary, having lost in tax court, and having incurred an IRS tax lien that would be unpayable over her entire lifetime, took her own life in dispair. |
|
| Back to top |
|
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
|
|
FAQ
Search
Memberlist
Usergroups
Register
Profile
Log in to check your private messages
Log in
