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Korean Job Discussion Forums
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yuyake79
Joined: 26 Jan 2011
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 Posted: Tue Mar 01, 2011 4:29 am Post subject: severance pay = 2.0 mil? |
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Hi...,
My monthly salary is a little over 2.3 but it says in my contract that my severance pay will be 2.0 mil. I signed it so I probably should just accept that I'm going to get 2.0. But is my boss required by law to pay me 2.3 regardless of what it says on the contract? |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Tue Mar 01, 2011 5:01 am Post subject: Re: severance pay = 2.0 mil? |
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| yuyake79 wrote: |
Hi...,
My monthly salary is a little over 2.3 but it says in my contract that my severance pay will be 2.0 mil. I signed it so I probably should just accept that I'm going to get 2.0. But is my boss required by law to pay me 2.3 regardless of what it says on the contract? |
Severance pay is supposed to be one month's pay, so you should be getting 2.3 million. It's actually calculated as the average of your total pay during your last three months, according to what I've read, so it should include any OT you had during those months in the calculation.
Your boss is required by law to pay you the entire 2.3 million. However, if you work less than 1 full year, you are entitled to nothing.
You have the problem of being dismissed early. It your boss can substantiate that you have been properly dismissed at 11 months, then he owes you nothing for severance. If you can show that you were improperly dismissed, then you should be able to collect the whole 2.3 million. It could be worth it to accept 2.0 with no fight. Some people would demand the full amount and fight to get it. |
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kneezah~
Joined: 08 Jan 2009
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| Posted: Tue Mar 01, 2011 4:47 pm Post subject: |
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| my severance pay was taxed. so i didn't get a full month's salary. i got the same amount i usually take home each month (after taxes)... if you're making 2.3 million and you have 300,000 deducted in taxes then you should take home about 2 million for your severance pay. if they are giving you 2 million then deducting taxes you might want talk to your employer about that... |
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mariaanceney
Joined: 07 Jan 2011
Location: 840 UNITED STATES
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| Posted: Sat Mar 05, 2011 4:20 am Post subject: |
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| kneezah~ wrote: |
| my severance pay was taxed. so i didn't get a full month's salary. i got the same amount i usually take home each month (after taxes)... if you're making 2.3 million and you have 300,000 deducted in taxes then you should take home about 2 million for your severance pay. if they are giving you 2 million then deducting taxes you might want talk to your employer about that... |
Wow, 300,000 is deducted in taxes off of 2.3?? Is it usually that much? |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Sat Mar 05, 2011 4:48 am Post subject: |
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| mariaanceney wrote: |
| kneezah~ wrote: |
| my severance pay was taxed. so i didn't get a full month's salary. i got the same amount i usually take home each month (after taxes)... if you're making 2.3 million and you have 300,000 deducted in taxes then you should take home about 2 million for your severance pay. if they are giving you 2 million then deducting taxes you might want talk to your employer about that... |
Wow, 300,000 is deducted in taxes off of 2.3?? Is it usually that much? |
Korea has a progressive income tax. If you are paid your final month's pay and your year's severance at the same time and use the tax withholding table you will pay quite a bit more on that second 2.3 mil.
http://www.nts.go.kr/eng/help/help_52.asp?top_code=H001&sub_code=HS05&ssub_code=HSE2
Withholding Tax on 2.3 mil: 33,550 won + 3,360 habitation tax
Withholding Tax on 4.6 mil: 319,380 won + 31,940 habitation tax
So, you should have 285,830 won withheld from your severance on this basis plus the 10% habitation tax. |
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big_fella1
Joined: 08 Dec 2005
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| Posted: Sat Mar 05, 2011 7:39 am Post subject: |
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| ontheway wrote: |
| mariaanceney wrote: |
| kneezah~ wrote: |
| my severance pay was taxed. so i didn't get a full month's salary. i got the same amount i usually take home each month (after taxes)... if you're making 2.3 million and you have 300,000 deducted in taxes then you should take home about 2 million for your severance pay. if they are giving you 2 million then deducting taxes you might want talk to your employer about that... |
Wow, 300,000 is deducted in taxes off of 2.3?? Is it usually that much? |
Korea has a progressive income tax. If you are paid your final month's pay and your year's severance at the same time and use the tax withholding table you will pay quite a bit more on that second 2.3 mil.
http://www.nts.go.kr/eng/help/help_52.asp?top_code=H001&sub_code=HS05&ssub_code=HSE2
Withholding Tax on 2.3 mil: 33,550 won + 3,360 habitation tax
Withholding Tax on 4.6 mil: 319,380 won + 31,940 habitation tax
So, you should have 285,830 won withheld from your severance on this basis plus the 10% habitation tax. |
What happens with your tax refund in this case, do you have to file and claim it after you've left? |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Sun Mar 06, 2011 7:48 am Post subject: |
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| big_fella1 wrote: |
| ontheway wrote: |
| mariaanceney wrote: |
| kneezah~ wrote: |
| my severance pay was taxed. so i didn't get a full month's salary. i got the same amount i usually take home each month (after taxes)... if you're making 2.3 million and you have 300,000 deducted in taxes then you should take home about 2 million for your severance pay. if they are giving you 2 million then deducting taxes you might want talk to your employer about that... |
Wow, 300,000 is deducted in taxes off of 2.3?? Is it usually that much? |
Korea has a progressive income tax. If you are paid your final month's pay and your year's severance at the same time and use the tax withholding table you will pay quite a bit more on that second 2.3 mil.
http://www.nts.go.kr/eng/help/help_52.asp?top_code=H001&sub_code=HS05&ssub_code=HSE2
Withholding Tax on 2.3 mil: 33,550 won + 3,360 habitation tax
Withholding Tax on 4.6 mil: 319,380 won + 31,940 habitation tax
So, you should have 285,830 won withheld from your severance on this basis plus the 10% habitation tax. |
What happens with your tax refund in this case, do you have to file and claim it after you've left? |
The tax rules for foreigners have changed. The 30% income exclusion has been eliminated. This means that foreign workers are now taxed the same as Koreans.
The tax withholding table has not changed. It was already calculated for Korean workers, apparently, and the Tax Office says we should still use that table for withholding.
Previously, even with taxes being withheld at the proper rate according to the NTS withholding site, most foreigners could expect a modest refund. (Most foreigners have been paying higher rates at most schools and never filed for a refund, however. Probably the schools have pocketed the refunds due.)
Now, without the 30% exclusion, it seems likely that most foreigners will end up about even or owing some additional taxes if they bother to file. Each person will have to calculate their own taxes, or get professional help, if they want to know how much they owe or if they have a refund due.
So, yes, if you are due a refund and you want to get it, you will have to file a return. If you have already left Korea, then you will have to file it from wherever you are. |
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