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big_fella1
Joined: 08 Dec 2005
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 Posted: Sat Aug 22, 2009 5:56 am Post subject: Pension crackdown on independent contractors |
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I recently received a letter from the pension office wanting me to state my income. Apparently the National Pension Service (NPS) has implemented a crackdown on all pension contributions including basing payments on last years real income, not the stated 'base' payment rate.
If you are self employed in Korea, you are meant to pay the 9% pension contribution on up to 3,600,000 won. This means for independent contractors have to pay 324,000 won a month into the pension system. It certainly makes one reconsider any contract below w60,000 per hour particularly of your citizenship doesn't allow you lump sum refunds.
Further if you work for any hagwon declaring your income to the NPS at 70% of your income, you would be liable to makeup the shortfall of the employers and your contributions.
This is not an issue for 1 year sojourners but it could be important for the long termers. |
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Uncle Kevin
Joined: 17 Aug 2009
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| Posted: Sat Aug 22, 2009 6:57 am Post subject: |
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| CDI may not be happy. I could be wrong though. |
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quercus
Joined: 04 Feb 2003
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| Posted: Sat Aug 22, 2009 6:32 pm Post subject: NPS |
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| how would this effect teachers at after school hagwons? i dont pay into the pension and either does my director or the school. am i waiting to burn? havent for like 5 years |
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Carla
Joined: 21 Nov 2008
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| Posted: Sat Aug 22, 2009 6:35 pm Post subject: Re: NPS |
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| quercus wrote: |
| how would this effect teachers at after school hagwons? i dont pay into the pension and either does my director or the school. am i waiting to burn? havent for like 5 years |
have you paid insurance and taxes? |
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big_fella1
Joined: 08 Dec 2005
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| Posted: Mon Aug 24, 2009 3:54 pm Post subject: Re: NPS |
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| quercus wrote: |
| how would this effect teachers at after school hagwons? i dont pay into the pension and either does my director or the school. am i waiting to burn? havent for like 5 years |
Are you on the two bankbook system? If you are you are set to be burned big time. You would have to pay the tax on the whole amount going into the bankbook they are holding, pension at 9% (capped at a maximum of w324,000) and national health at 4.05%.
If you aren't on the two bankbook system, you may slip under the radar. In the past Health Insurance was what used to trigger the pension ofice to look. Recently when I was at the NPS they had updated my contribution to be my average taxable income from last year. This means the NTS and NPS could finally be sharing data. The good news for you is that if your employer is deducting 3.3%, you probably don't exist as far as the tax office is concerned. |
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benji
Joined: 21 Jul 2009
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| Posted: Mon Aug 24, 2009 4:23 pm Post subject: |
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| Very interesting indeed. I wonder if it will be retroactive. I have been doing afterschool programs for years and nobody has been paying medical or pension. Will they go after the various schools I worked at for their contributions? I cant see the schools being too happy about this. And if they change the rules midstream, then I should be legally eligible for one year severence for each year of service which I didnt get in the past. |
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Carla
Joined: 21 Nov 2008
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| Posted: Mon Aug 24, 2009 6:34 pm Post subject: |
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| benji wrote: |
| Very interesting indeed. I wonder if it will be retroactive. I have been doing afterschool programs for years and nobody has been paying medical or pension. Will they go after the various schools I worked at for their contributions? I cant see the schools being too happy about this. And if they change the rules midstream, then I should be legally eligible for one year severence for each year of service which I didnt get in the past. |
From what I have heard, unless you can prove your employer took the payments out of your check, you are responsible for all the payments. |
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