Korean Job Discussion Forums

[tehdee]

i have searched, i have found myriad conflicting write-ups, and numerous threads.

can anyone, with a pay stub in hand reflect on the current income tax situation?

i have just started a new job at 2.4/month. its a brand new academy under a parent company and my director just now has received word from high up as to the the income tax model being restructured recently, for foreign teachers.

can anyone, working a hagwon job on an e2 visa at 2.3-2.4/month reflect on their pay cheque breakdown?

2.3
minus pension @ ___________
minus medical @ ___________
minus income tax @ __________
=?

what is your income tax deduction every month?

[tehdee]

http://english.mofe.go.kr
--- this being my old source of info is now offline.

[alwaysbeclosing100]

to the best of my knowledge these numbers are very close to being correct

pension is 4.5% and your employer contributes 4.5%...if you work for a hogwan i highly suggest you verify with NPS about every two months that your employer is actually contributing your amount and their required amount(with the exception of south africa people).....NPS sends you a statement in the mail at least annually and you can check your balance online......

health is 2.54% you contribute and your employer contributes the same.......get a health card in the first month in the mail......you will know when you go to a doctor if your employer has properly contributed the money......any doctor can look it up in their computer.......

my tax withholding at a hogwan was 3.3%.......there is an NTS website that will calculate your withholding and it will probably show less than 3.3%........3.3 is the absolute max i have heard of someone making 2.4 mil accept if you are single with no kids.........

[OculisOrbis]

Pension = 4.5%
http://www.nps.or.kr/apppage/user_guide/guide_01_06_view.jsp?AT_ID=482&GUBUN=b-020-005&FAQ_CAT_COMM_TEXT_ID=b-020-005&PAGE_NO=1&SUB_PAGE_NO=1&RETURN_URL=/apppage/english/qna/qna_01.jsp&SRCH_STAT=-1&SRCH_WORD=

Health Insurance = ~2.89% (It was 2.67% for 2010, but it has increased for 2011)
You can call 02-390-2000 to verify.

Tax :
My Withholding Tax Calculator
My Salrary 2,400,000 won
Simplified Taxes 41,740 won
Residents Taxes 4,170 won (10% of the simplified taxes)
Total taxes withheld 45,910 won

http://www.nts.go.kr/eng/help/help_56.asp?top_code=H001&sub_code=HS05&ssub_code=HSE4

[tehdee]

@oculis! thanks so much. obliged.

essentially my situation is as follows. ive signed on with a brand new academy/institution in a sort of pilot program position-- unchartered waters.

the higher ups are telling my insanely transparent and helpful director that the foreign teachers have two options:

1) 18% income tax [with UP TO 900,000 back next return] and 4.5% pension, with the usual medical, etc...

or

2) 3.3% income tax, a national health plan but NO pension contribution (essentially contract worker status)

for me, this poses a big problem... obviously nearly 20% of my salary being taxed is not an option. thats unreal. but for Canadians (and Americans alike) the pension refund is a big draw, which essentially equals an extra 100,000won+change extra a month. had i known this, i simply would have negotiated an extra .1/month

my director is open to suggestions and would is totally willing to go to bat for us... but as far as the 2010 and 2011 tax structure is concerned, it looks like its pitted against us.

insights?

*edited for formatting

[OculisOrbis]

Option 1 is complete and utter BS.

Option 2 is where they are trying to claim you are an independent contractor. If you are on an E-2 visa, you are not. You are an employee. By claiming you are an independent contractor, you will have to pay nearly double the tax for your salary that you would as an employee and YOU would be responsible for your own health insurance and pension. You would have to enroll yourself and employer would pay nothing - you would pay double what I quoted above for health and pension.

The rates in my previous post are for those of an employee. Accept nothing but those terms otherwise you are screwing yourself.

No laws pertaining to tax, health or insurance for you have changed from 2010 to 2011, with the exception of the health insurance rate rising very slightly.

If they insist you have only the two options they offered, politely decline and find another employer.

[tehdee]

@occulis.

cheers again, but to clarify... does your school match your pension contribution?

[OculisOrbis]

Yes. Absolutely. I am their employee. 4.5% is deducted from my pay each month and my employer matches it. The pension office collects 9% total. When I take my lump sum refund from the pension office when I leave korea, I collect the entire 9%.

[tehdee]

the plot thickens...

because my institute is operated under a LARGE parent company, the tax rates are supposedly different. For an employee of this company making under 40,000,000 as a regular employee my tax rate is 18%.

they have agreed, to contribute to pension, enroll me in national health, and tax me at a rate of 3.3% as a contract worker--- BUT they want to withhold the contract workers incomplete contract tax of 22% and refund me the remaining 18.7% at the completion of the term. obviously that poses so many risks, as im sure you guys understand.

ive gotten the runaround from my district tax office as far as an english speaker is concerned, and their online submission form doesnt really work.

such a headache. does anybody have a direct number for a nts tax advocate that is preferably english speaking?

[OculisOrbis]

They should NOT be withholding that much. If they want to claim you are a contractor (youre not), they should withhold ONLY 3.3% for your tax. At tax settlement time (most employers do it in Feb.), they will determine your refund or if you have to pay a little more to settle your taxes for the previous year.

Also, please call the health and pension offices and make sure that your employer actually enrolled you AND is submitting your deductions - not just pocketing them. Make sure you also ask what salary you were enrolled at. Many employers will report your salary as being much lower (50% or less) so they can use your deduction to pay for their share as well.

Tax Advocate: 02-2076-5711 , 1588-0560
National Pension: 1355 (I think press 7 for English,,,or wait for someone and request English)
National Health: 02-390-2000