Korean Job Discussion Forums

[s.mackesey]

While there is another thread about taxes near the top of the list at the moment, this thread is polluted with IRS jargon and is mostly about US tax payments. I want this new thread to answer some specific questions. First:

What taxes does the average one-year hagwon teacher have to pay to the KOREAN GOVERNMENT, and how are those taxes normally paid?

Note that this is not about tax payments to the US Government. Please do not post that information on this thread.

I know that there is a "tax treaty" between the US and Korean governments. From other threads I got the impression that this only applies to public school and university teachers (members of "recognized educational institutions" or some such phrase). Am I mistaken in this?

A few more specific questions:
1) Does a hagwon teacher have to file any sort of tax return, or should that be handled by their employer?
2) Exactly what taxes should be withheld from a hagwon teacher's monthly pay?
3) Is a hagwon teacher entitled to a refund of any of that withheld money at the end of the year?
4) If (3) is true, is it refunded by their employer or the Korean government?

Regarding question (2), my impression is that income tax and something called 'national pension' are withheld, but I'm not sure if these are the same thing. I'm also not sure what the exact percentage should be.

Thanks in advance to the Dave's Community. In Job Discussion, let's try to maintain good, clean threads that stay short and answer clear and simple questions! There's a lot of good information on this site, but much of it is buried underneath mounds of garbage.

EDIT: Here is a document from the Korean National Tax Service aiming to make Korean tax law easier for foreigners to understand. This cleared up some things for me, but I don't think it does a great job...
http://www.nts.go.kr/eng/nts/nts_01.asp?minfoKey=MINF7220080211223559&type=V#

[TheUrbanMyth]

[tired of LA]

I have received a tax refund the previous two years while working at a hagwon. After my employer filed my tax return, they would give me my tax refund a few months later.

I'm not sure about the laws pertaining to tax returns, but from my experience, hagwon teachers must file a tax return, usually handled by their employer, and are eligble for a tax refund if they qualify, refunded to them by their employer.

Now all this might have changed this year though, due to the new tax laws. Not sure how is affected everything.

[s.mackesey]

Thanks people for the responses.

A few more things need clarification:

So that I understand the pension correctly...
If my monthly salary is 2.1 million won, then 4.5% of that is deducted and goes to pension. So we deduct W94500 a month. My employer has to match that number, so he also pays W94500 each month. Now at the end of the year, am I entitled to all of this money, i.e. mine + the employer's? That is, should I be able to claim (94500 + 94500) * 12 = W2,268,000?

Or am I incorrect, and am only entitled to the half of that that was withheld from my paycheck?

Second, do employers usually handle the application at the pension office, or is that something hagwon teachers have to do themselves?

Third, when do those tax returns come in? I assume they come back for everyone at the same time?

Finally, if pension is 4.5% of salary withheld, what is the TOTAL amount of salary withheld, including the pension, residence, and income taxes. I assume pension and income taxes are based on your salary, while health insurance and residence tax are flat.

Thanks again to all you knowledgeable people.

[TheUrbanMyth]

[big_fella1]

[TheUrbanMyth]

[s.mackesey]

Thanks TheUrbanMyth for all of the clear information.

Do you (or anyone else) know of an official document detailing the pension system? If so, could you link to it? I'd like to have such a document available when discussing the pension with my employer. I think only something like 5% of my income has been withheld. It seems like he's probably doing something illegal.

[TheUrbanMyth]

[big_fella1]

[TheUrbanMyth]