Korean Job Discussion Forums

[warmachinenkorea]

We've been here 2 years, starting our third, and it's time to pay Korean taxes. For this contract my wife and I have opted for the housing allowance.

However a co-t jsut informed me the housing will come with our pay on the 25th and it will be taxed. This doesn't seem quite right.

Anyone have any experince with this? Thanks

[OculisOrbis]

Housing allowances are taxed.

[warmachinenkorea]

Thanks.

Why though? I know this isn't the US but it just seems odd to have an allowance taxed.

[OculisOrbis]

It's money and considered a part of your income so it's taxed. Providing housing doesnt put cash in your pocket so it isnt taxed.

[warmachinenkorea]

Makes since.

What is the tax rate here anyway.

[OculisOrbis]

It's variable and works on a sliding scale based on your income - the more you make, the higher your tax rate.

The average teacher wages here would be taxed at about 1.5-2%.

[WadRUG'naDoo]

Housing allowances should be tax deductible.

[OculisOrbis]

but theyre not.

[WadRUG'naDoo]

I guess not in Korea. It's always been the rule there that provided housing under your employer's name is not taxed, but any money you receive as salary is taxed in full. The latter is the case anywhere, I guess.

Right now in China, I can claim up to 5,000 rmb per month for housing. Have to get a form from the tax office (landlord must do this for me) and hand it in to human resources. Whatever my rent is lowers my taxable income by that much. Have to do this monthly or hand it in for however many months rent I've paid. This is something only for foreigners.

In Korea, though, taxes are already quite low for foreigners, so it doesn't make much difference, really.