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methdxman
Joined: 14 Sep 2010
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 Posted: Mon Oct 04, 2010 7:01 am Post subject: Flat tax scheme: Anyone on it? |
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| Is anyone having their tax withheld via the flat tax scheme? Is it a complicated process to get on it or a simple check on a box? Thanks. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Mon Oct 04, 2010 7:26 am Post subject: Re: Flat tax scheme: Anyone on it? |
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| methdxman wrote: |
| Is anyone having their tax withheld via the flat tax scheme? Is it a complicated process to get on it or a simple check on a box? Thanks. |
What do you mean by a "flat tax scheme?" Never heard of it.
Korea has a progressive income tax. Although independent contractors may face a flat withholding rate of 3.3% or something, eventually everyone's taxes are progressive here.
Your taxes should be according to the NTS tax table:
http://www.nts.go.kr/eng/help/help_52.asp?top_code=H001&sub_code=HS05&ssub_code=HSE2
Do NOT sign up to be an independent contractor. For most teachers it's a bad deal. As an employee, most newbie teachers will pay less than 2% according to the tax table. As independent contractors, most will lose in other ways as well (unless you are cheating on your own taxes). Perhaps your "flat tax rate scheme" is a flat tax rate scam. |
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methdxman
Joined: 14 Sep 2010
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| Posted: Mon Oct 04, 2010 7:42 am Post subject: Re: Flat tax scheme: Anyone on it? |
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| ontheway wrote: |
| methdxman wrote: |
| Is anyone having their tax withheld via the flat tax scheme? Is it a complicated process to get on it or a simple check on a box? Thanks. |
What do you mean by a "flat tax scheme?" Never heard of it.
Korea has a progressive income tax. Although independent contractors may face a flat withholding rate of 3.3% or something, eventually everyone's taxes are progressive here.
Your taxes should be according to the NTS tax table:
http://www.nts.go.kr/eng/help/help_52.asp?top_code=H001&sub_code=HS05&ssub_code=HSE2
Do NOT sign up to be an independent contractor. For most teachers it's a bad deal. As an employee, most newbie teachers will pay less than 2% according to the tax table. As independent contractors, most will lose in other ways as well (unless you are cheating on your own taxes). Perhaps your "flat tax rate scheme" is a flat tax rate scam. |
Thanks a lot for the link.
I actually found it on there. I think as a foreigner you can choose between having a flat tax of 15% or normal taxes on 70% of your income:
http://www.nts.go.kr/eng/help/help_53.asp?top_code=H001&sub_code=HS05&ssub_code=HSE3
I will be an employee at a normal (non ESL/EFL related) company. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Mon Oct 04, 2010 11:02 am Post subject: |
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For year end tax filing you should use both methods and choose the one that gives you the lowest tax liability or the greatest refund. There are two alternative methods, so that the 15% is not a flat tax, it is a tax ceiling for foreigners. The income tax is still progressive up to that ceiling.
You should still use the monthly withholding calculator for your monthly withholding tax. |
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thegadfly
Joined: 01 Feb 2003
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| Posted: Mon Oct 04, 2010 11:03 am Post subject: |
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methdxman,
That ended in 2009 -- in 2010, you get taxed on the whole amount of your income, though the total tax liability is much less than 15%. It is a sliding scale according to what you earn, most likely between 1% - 5% (low end teacher's salary to higher end teacher's salary) |
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mandalynn2104
Joined: 15 Mar 2010
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| Posted: Mon Oct 04, 2010 9:53 pm Post subject: |
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just two questions:
Are you an American?
Have you been teaching in Korea less than 2 years?
If so, you don't need to pay taxes at all. |
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RMNC
Joined: 21 Jul 2010
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| Posted: Mon Oct 04, 2010 10:38 pm Post subject: |
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| mandalynn2104 wrote: |
just two questions:
Are you an American?
Have you been teaching in Korea less than 2 years?
If so, you don't need to pay taxes at all. |
Not true. As an employee, you pay between 1.1-2.2% on a sliding scale, as a contractor, 3.3%. |
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methdxman
Joined: 14 Sep 2010
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| Posted: Tue Oct 05, 2010 3:33 am Post subject: |
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| mandalynn2104 wrote: |
just two questions:
Are you an American?
Have you been teaching in Korea less than 2 years?
If so, you don't need to pay taxes at all. |
Yes I am American.
Not an English teacher at all. I'll be working a normal job in Korea starting in a month.
I guess I wanted to calculate my take home pay plus see what my real tax liability would be. |
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big_fella1
Joined: 08 Dec 2005
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| Posted: Tue Oct 05, 2010 5:45 am Post subject: |
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| methdxman wrote: |
| mandalynn2104 wrote: |
just two questions:
Are you an American?
Have you been teaching in Korea less than 2 years?
If so, you don't need to pay taxes at all. |
Yes I am American.
Not an English teacher at all. I'll be working a normal job in Korea starting in a month.
I guess I wanted to calculate my take home pay plus see what my real tax liability would be. |
The 30 percent exemption has gone. If you are earning more than about w100,000,000 a year then flat tax could be the way to go, otherwise just pay the sliding scale. Everything here is a deduction including your local creditcard/checkcard and cash spend.
If you are to be a contractor tax is taken at 3.3% as a withholding amount and you must file a return in May, however contractors miss out on many of the tax deductions given to employees.
I believe that Americans can earn up to a certain amount (is it $80,000 a year ?) abroad and not pay American tax, but they must file a US return to get this exemption. |
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sojukettle
Joined: 23 Aug 2005
Location: Not there, HERE!
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| Posted: Tue Oct 05, 2010 4:21 pm Post subject: |
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I work at a korean company and my tax is around 10-15% taken out per month. ( Income tax and then 10% of that amount as Resident Tax)
sk. |
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methdxman
Joined: 14 Sep 2010
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| Posted: Wed Oct 06, 2010 1:04 pm Post subject: |
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| sojukettle wrote: |
I work at a korean company and my tax is around 10-15% taken out per month. ( Income tax and then 10% of that amount as Resident Tax)
sk. |
Thanks alot, this is helpful. Thanks to everyone else as well. |
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