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is so delicious
Joined: 28 Apr 2009
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 Posted: Wed Apr 13, 2011 2:44 am Post subject: Pension/insurance package or no?? |
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Please advise:
My job is offering me a choice regarding pension/health insurance. I'm wondering if anyone has some actual numbers on this. I basically just want to make as much money as I can. I never, ever get sick or hurt and am perfectly comfortable counting on that continuing for another year (so don't bother with the lecture  ).
I basically am wondering if it just comes out as about the same thing. If I went for pension/insurance, would the amount I'd be surrendering in each monthly paycheck would be about the same amount I'd be refunded as a lump sum when I leave Korea?
Two things of note: apparently I cannot go for ONLY pension... if I choose pension, I also have to get health insurance (for whatever reason).
Also, I am American. I thought I read somewhere that USA and South Korea have some agreement that enables me to get hooked up with the whole tax/pension thing, which might make my pension higher than people of other nationalities if I go that route...??
Appreciate any thoughts. |
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SeoulNate
Joined: 04 Jun 2010
Location: Hyehwa
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| Posted: Wed Apr 13, 2011 5:19 am Post subject: |
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You make a ton more money if you take pension.
The more you make (up to a certain point anyway) the more you earn by taking pension.
Lets say that you take a standard contract at 2.2 million.
You are going to pay about 70 bucks a month for healthcare and the boss is going to pay 100 bucks into pension, matching your contribution.
Right there you are netting 30 bucks a month.
However, you also have to remember taxes. If you are not getting pension, then you are getting signed on as a subcontractor who works at 3.3% tax in Seoul. If you agree to pension, you will be paying less than 2% in taxes.
That is another 30 bucks a month.
60x12 = 720 bucks for the year. give or take a few for my rounding. |
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is so delicious
Joined: 28 Apr 2009
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| Posted: Wed Apr 13, 2011 5:31 am Post subject: |
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Thanks for the info. That's weird, though... my co-worker seems like a sharp guy and he told me he doesn't do pension. He didn't have time to tell me why, but now I'll have to ask him.
I make 3.1 per month (no housing). How do you figure that paying 70 bucks a month for insurance will be matched by 100 (??) a month into my pension pay? How is this calculated? |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Wed Apr 13, 2011 5:58 am Post subject: Re: Pension/insurance package or no?? |
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| is so delicious wrote: |
Please advise:
My job is offering me a choice regarding pension/health insurance. I'm wondering if anyone has some actual numbers on this. I basically just want to make as much money as I can. I never, ever get sick or hurt and am perfectly comfortable counting on that continuing for another year (so don't bother with the lecture ).
I basically am wondering if it just comes out as about the same thing. If I went for pension/insurance, would the amount I'd be surrendering in each monthly paycheck would be about the same amount I'd be refunded as a lump sum when I leave Korea?
Two things of note: apparently I cannot go for ONLY pension... if I choose pension, I also have to get health insurance (for whatever reason).
Also, I am American. I thought I read somewhere that USA and South Korea have some agreement that enables me to get hooked up with the whole tax/pension thing, which might make my pension higher than people of other nationalities if I go that route...??
Appreciate any thoughts. |
Pension and health insurance are both provided by the national government and they are linked. So, you can't sign up for one without the other.
If you do not sign up for pension and health ins. you will have to register as an independent contractor. This means you will have your taxes withheld at a higher rate. It also means that you are still legally responsible to pay for your own health ins and pension through the national government. So, if you do things legally you will lose money.
If you do not sign yourself up for pension and health you could make more or less. This depends on the terms offered under each possibility under the two different contract offers.
Finally, this system of being an Independent Contractor as an E2 teacher has been legal up till now, but it is now being challenged in court, according to reports here on Dave's. We do not know if the court will uphold the current system, modify it in some way, or strike it down altogether.
In any case, it seems quite risky to go without health insurance. Sure you're young and healthy, and I've made the same choice before myself, but you'll have to live more carefully to avoid illness and accidents. A lot can happen when you're in a new place - new risks, new germs.
Consider your options wisely. |
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SeoulNate
Joined: 04 Jun 2010
Location: Hyehwa
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| Posted: Wed Apr 13, 2011 6:04 am Post subject: |
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I told you... the numbers were based on a 2.2 salary.
Pension is 9% of your salary. 4.5% is from you, and 4.5 is matched from you employer.
off the top of my head, i believe healthcare is 2.25% from both you and your boss.
Right there you are making 2.25 % more per year. your co-teacher is crazy.
in addition, you will still be paying less than 3.3% in your taxes. Even more money in your pocket.
The ONLY way this is defeated is if you are making close to 4.0 per month and are then paying more into taxes than the 3.3% the employer is having you pay. However, I am not even sure if that is strictly-speaking, legal. |
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SeoulNate
Joined: 04 Jun 2010
Location: Hyehwa
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| Posted: Wed Apr 13, 2011 6:06 am Post subject: |
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| is so delicious wrote: |
| Thanks for the info. That's weird, though... my co-worker seems like a sharp guy and he told me he doesn't do pension. |
Is he from a country that doesnt get the pension back? That might be why. Any American would be crazy not to take pension working at a single job. |
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is so delicious
Joined: 28 Apr 2009
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| Posted: Wed Apr 13, 2011 7:06 am Post subject: |
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Cool- thanks for the thoughts. I'm not sure what you mean by pension coming back to bite you if your salary is close to 4.0 a month. Whatever you pay month to month you get back in the lump sum (or you get back half of it?), right? So why would it matter? Do you have to pay more in non-refundable taxes if your salary's high enough (though I assume 3.1 isn't)?
Guess I'll just try to find a copy of my contract and talk to my co-teacher tomorrow... |
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SeoulNate
Joined: 04 Jun 2010
Location: Hyehwa
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| Posted: Wed Apr 13, 2011 8:33 pm Post subject: |
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not pension...
taxes.
Taxes are scalable if you are an employee. The more you make, the more you pay. If you get yourself into a bracket where you are paying more than 5.55 percent, then you would make more by not accepting pension and healthcare if the company is offering to make you a subcontractor and pay 3.3% taxes.
However, as I said before, I do not know if that is legal. |
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is so delicious
Joined: 28 Apr 2009
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| Posted: Wed Apr 13, 2011 9:31 pm Post subject: |
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| Word. Anyone know how I can I tell if I'm in that bracket? |
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SeoulNate
Joined: 04 Jun 2010
Location: Hyehwa
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is so delicious
Joined: 28 Apr 2009
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| Posted: Thu Apr 14, 2011 4:33 am Post subject: |
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Alright. So I'm making 3.86%, which is obviously more than 3.3%. Then the 2.25% or so on health insurance, which I don't need and don't want to lose money for. 4.5% out of my pocket and another 4.5% out of my employer's pocket = pension. How much pension am I getting back? The total of 9% per month, or only half or part of that (again, I'm from America).
Ha... I'm kind of a man-child. Sorry I need someone to hold my hand to get to the bottom line... you'd think my employer would be the hand-holder, but he doesn't seem to know much more about it and can't seem to offer me a situation that is black and white. |
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SeoulNate
Joined: 04 Jun 2010
Location: Hyehwa
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| Posted: Thu Apr 14, 2011 4:56 am Post subject: |
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dude.. are you serious?
You get the full 9% back at the end. The end being whenever you leave Korea.
You are going to make about 1.7% more by taking pension. Not to mention you are getting healthcare and a few bucks out of the interest from the pension fund.
You will be pocketing around 600,000 by taking pension. Your coworker is a moron. |
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is so delicious
Joined: 28 Apr 2009
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| Posted: Thu Apr 14, 2011 4:58 am Post subject: |
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Awesome. Thanks, Nate. I told them I wanted pension earlier today... just wanted to make sure it was the right call.
Surprised they gave me the option. The last few gigs didn't... |
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