Korean Job Discussion Forums

[RMNC]

So I've been getting a ton of e-mails and PMs lately about tax rates, with the new hiring season approaching. Most people seem generally confused about what their tax rates should be.

Let's get this out the way right now. Type in your salary at this website:

http://www.nts.go.kr/eng/help/help_52.asp?top_code=H001&sub_code=HS05&ssub_code=HSE2

The number it spits out is what you should be taxed every month when you get your check. So if you are going to have a salary of 2.1million won per month, you should pay 28,510 won.

It is NOT 3.3%

There are two types of people you can have work for you on an E-2 visa, an employee and a contractor. The 3.3% tax rate is for contractors. If you are in a contract that says "the employee shall..." then you are an employee, not a contractor.

So why do schools try to register you as a contractor with immigration? They're protecting their bottom line. Companies that have 5 "employees" or less are given tax breaks for being small businesses. Obviously, many hagwons have upwards of 20 or more employees, therefore to cheat the system they will make the teacher think that they're an employee when they really aren't.

Contractors are required to pay for their own pension and health insurance by law, so most employers will pay half of their employee's share to continue the illusion for the employee that they're not registered as a contractor.

So why does this still exist despite it being obviously illegal tax dodging? Well, the problem is two-sided. Hagwons look at each other's contracts and communicate with each other. They go "I charge my employees 3.3%!" and their other hagwon friends say "Wow! Your teachers let you get away with cheating them?! It's so crazy I have to do it too!". Eventually the 3.3% becomes the norm. Other times the owners of the school are inept and don't understand the business aspect of taxes.

The other side of the problem is the teachers: A majority of them don't ever take the time to research their contracts, being mostly young graduates with little understanding of the Korean tax system. They jump at the chance to have a job with only 3.3% income tax without even knowing they're actually paying double what they should.

So in the end, what does it all mean? Simply, if you see 3.3% on your taxes when you're offered a contract, you need to tread lightly with that school. If they're willing to rip not only you, but the Korean government off, what's to stop them from screwing you in any other multitudes of ways?

If a recruiter or a school tries to tell you "This is what all Koreans pay" then you need to take the link above and stick it in their face and say "This is how much I will pay, either change it or find someone else". Others already working contracts with false taxation may use this information to extort their employers back into legality, a choice that morally I have no qualms with and have done before.

I'd like to ask others to share their tax stories and information with the rest of us if you're comfortable. Tell us what tax rate you're being offered or are working at, whether it's 3.3%, lower, or even higher, and your experiences with trying to get the correct tax rates used for your income bracket. I'm also particularly interested in anyone who has challenged their hagwon bosses at the tax game and won.

[SeoulNate]

To make a long story short, I finished a contract at a franchised Avalon that was paying me pension, healthcare and paid proper taxes. About three weeks before the contract finished new management was brought in. I had already signed on for another year with the old contracts.

After my contract was finished the new managers called me and my GF in to ask us to sign new contracts. I didnt think too much of it until I got to reading them and noticed that they had tried to change us to contractors, not pay our pension and the other crap that goes along with that.

Anyway, after numerous calls to the pension office, labor board and police I used all of that to force them to give me a LOR and I got a nice fat bonus for 'quitting' lol.

Now i am back working for a legit school

[tua111111]

[CentralCali]

Ah, the infamous "independent contractor" issue. Look, folks. Is your employer your sponsor? If so, you are not independent. Does your employer set the working conditions? If so, you are not independent.

[SeoulNate]

they are trying to screw with you. Your severance is not calculated into your monthly pay when using that calculator.

Report their asses since they are obviously not paying your pension or NHIC either.

You can probably kiss the money goodbye either way since it was your obligation from jump street to make sure that everything was in order.

This kind of crap makes me wish that new NETs would be required to addend a class informing them of all the BS that happens in the work place that has to do with monetary issues. Uninformed people letting hogwons screw them around is why it has gotten as bad as it is now.

[ssuprnova]

OK so what's happening here?

Income before deductions: 2'580'000 Won

Income tax withheld by my employer: 89'230 (3.5% of my income)
Employment insurance: 11'610
Basic tax for resident: 8'920

Income tax that I should be paying according to the calculator: 56'920 (2.2% of my income).

I'm also paying in 4.4% into the pension fund, 3.2% for medical insurance. I'm sure that I'm enrolled into the latter since I'm in the NHF system and get a discount on prescriptions.

Is my employer cheating the system?

How serious is this under Korean law and should I do anything about it?

[SeoulNate]

If your numbers are right, they are either cheating you or are incompetent.

1. Your salary seems a bit odd, is that your actual contracted monthly wage?

2. Your pension should be 4.5%

3. Your healthcare is what really bugs me. It should be 2.25%. It being well over that makes me think they are screwing you.

Easiest way to find out is to call the pension office and see if you are registered and money is actually being deposited. If it is, then you really need to sit down with whoever is playing accountant at your school and see if they are intentionality trying to cheat you.

[marsavalanche]

Oh PLEASE sticky this thread.

Thank you OP.

TOO many jobs with the 3.3% tax rate. It's lack of knowledge that is killing jobs to the point where they know the next person they look at WILL accept this and getting screwed among other things.

[ssuprnova]