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cat12345
Joined: 28 Jun 2013
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 Posted: Wed Aug 28, 2013 10:30 am Post subject: Taxes? What is take home pay for 2.1? Contract doesn't men.. |
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tion health insurance? This is what it says, exactly: CLAUSE 7 (TAX)
Income tax and residence taxes of 3.3% will be deducted off the salary according to the Korean
tax law.
I understand this means that I am a contractor, not an actual employee?
Does this mean I am on my own for medical bills? |
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Porksta
Joined: 05 May 2011
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| Posted: Wed Aug 28, 2013 4:14 pm Post subject: |
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| Yes to everything. |
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ttompatz
Joined: 05 Sep 2005
Location: Kwangju, South Korea
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| Posted: Wed Aug 28, 2013 5:39 pm Post subject: Re: Taxes? What is take home pay for 2.1? Contract doesn't m |
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| cat12345 wrote: |
tion health insurance? This is what it says, exactly: CLAUSE 7 (TAX)
Income tax and residence taxes of 3.3% will be deducted off the salary according to the Korean
tax law.
I understand this means that I am a contractor, not an actual employee?
Does this mean I am on my own for medical bills? |
It means, bend over and add lube.
. |
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Porksta
Joined: 05 May 2011
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| Posted: Wed Aug 28, 2013 6:14 pm Post subject: |
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| If you are coming to Korea on an E-2, 3.3% is the magic number for a job NOT to take. |
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OBwannabe
Joined: 16 Feb 2008
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| Posted: Wed Aug 28, 2013 6:39 pm Post subject: |
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| Porksta wrote: |
| If you are coming to Korea on an E-2, 3.3% is the magic number for a job NOT to take. |
I never understood this and I wish I did. So many one here say if their employer is deducting 3.3% for income tax then their employer is screwing them.
I worked at the same hagwon for 5 years and they always deducted 3.3% for income tax. I had the pension and health deductions/benefits as well.
This school was rarely cheap and gave bonuses when they didn't need to.
They always paid on time (including OT) and in full.
I've since been offered several contracts from other hagwons that have the same 3.3% deduction. Including the hagwon that I just signed with. They seem very legit and the teachers who are currently there seem happy.
Are we really sure that 3.3% is an incorrect amount to be deducting? Or are we just jumping on the bandwagon? |
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nicwr2002
Joined: 17 Aug 2011
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| Posted: Wed Aug 28, 2013 6:43 pm Post subject: |
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| OBwannabe wrote: |
| Porksta wrote: |
| If you are coming to Korea on an E-2, 3.3% is the magic number for a job NOT to take. |
I never understood this and I wish I did. So many one here say if their employer is deducting 3.3% for income tax then their employer is screwing them.
I worked at the same hagwon for 5 years and they always deducted 3.3% for income tax. I had the pension and health deductions/benefits as well.
This school was rarely cheap and gave bonuses when they didn't need to.
They always paid on time (including OT) and in full.
I've since been offered several contracts from other hagwons that have the same 3.3% deduction. Including the hagwon that I just signed with. They seem very legit and the teachers who are currently there seem happy.
Are we really sure that 3.3% is an incorrect amount to be deducting? Or are we just jumping on the bandwagon? |
3.3% is the wrong amount, but some schools honestly don't know that it's wrong. They may get their information from other shady hagwons or they just don't know the rules. Others do it to make their school look smaller to avoid paying more taxes on the business. |
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OBwannabe
Joined: 16 Feb 2008
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| Posted: Wed Aug 28, 2013 6:57 pm Post subject: |
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| nicwr2002 wrote: |
| OBwannabe wrote: |
| Porksta wrote: |
| If you are coming to Korea on an E-2, 3.3% is the magic number for a job NOT to take. |
I never understood this and I wish I did. So many one here say if their employer is deducting 3.3% for income tax then their employer is screwing them.
I worked at the same hagwon for 5 years and they always deducted 3.3% for income tax. I had the pension and health deductions/benefits as well.
This school was rarely cheap and gave bonuses when they didn't need to.
They always paid on time (including OT) and in full.
I've since been offered several contracts from other hagwons that have the same 3.3% deduction. Including the hagwon that I just signed with. They seem very legit and the teachers who are currently there seem happy.
Are we really sure that 3.3% is an incorrect amount to be deducting? Or are we just jumping on the bandwagon? |
3.3% is the wrong amount, but some schools honestly don't know that it's wrong. They may get their information from other shady hagwons or they just don't know the rules. Others do it to make their school look smaller to avoid paying more taxes on the business. |
I worked for YBM ECC...you would think they would know. Being a huge franchise and quite legit. |
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TheUrbanMyth
Joined: 28 Jan 2003
Location: Retired
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| Posted: Wed Aug 28, 2013 8:20 pm Post subject: |
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| OBwannabe wrote: |
| Porksta wrote: |
| If you are coming to Korea on an E-2, 3.3% is the magic number for a job NOT to take. |
I never understood this and I wish I did. So many one here say if their employer is deducting 3.3% for income tax then their employer is screwing them.
I worked at the same hagwon for 5 years and they always deducted 3.3% for income tax. I had the pension and health deductions/benefits as well.
This school was rarely cheap and gave bonuses when they didn't need to.
They always paid on time (including OT) and in full.
I've since been offered several contracts from other hagwons that have the same 3.3% deduction. Including the hagwon that I just signed with. They seem very legit and the teachers who are currently there seem happy.
Are we really sure that 3.3% is an incorrect amount to be deducting? Or are we just jumping on the bandwagon? |
According to the Korean National Tax service it would appear to be
http://call.nts.go.kr/JFAQ/view.jsp?q_id=10663
Scroll about 2/3rds down the page and see the difference between the IC rate and the employee rate
As to why hakwons use the 3.3% rate there are three reasons.
1. They know the law and are trying to save money on pension and health insurance by registering you on the sly as an IC.
2. They don't know the law and are just going on what they heard from other hakwon directors or the hakwon association.
3. They know the law and are trying to save some money by paying the correct rate and pocketing the excess.
I would say for most it's a combination of 1 and 3.
Why? It took me about 30 seconds to Google it and find the information. It should be just as easy for directors to do that too...or they could just call the tax office and find out in the same amount of time. I refuse to believe that with either option being so free and easy that it's just a case of willful ignorance for most.
. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Thu Aug 29, 2013 6:33 am Post subject: |
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| TheUrbanMyth wrote: |
| OBwannabe wrote: |
| Porksta wrote: |
| If you are coming to Korea on an E-2, 3.3% is the magic number for a job NOT to take. |
I never understood this and I wish I did. So many one here say if their employer is deducting 3.3% for income tax then their employer is screwing them.
I worked at the same hagwon for 5 years and they always deducted 3.3% for income tax. I had the pension and health deductions/benefits as well.
This school was rarely cheap and gave bonuses when they didn't need to.
They always paid on time (including OT) and in full.
I've since been offered several contracts from other hagwons that have the same 3.3% deduction. Including the hagwon that I just signed with. They seem very legit and the teachers who are currently there seem happy.
Are we really sure that 3.3% is an incorrect amount to be deducting? Or are we just jumping on the bandwagon? |
According to the Korean National Tax service it would appear to be
http://call.nts.go.kr/JFAQ/view.jsp?q_id=10663
Scroll about 2/3rds down the page and see the difference between the IC rate and the employee rate
As to why hakwons use the 3.3% rate there are three reasons.
1. They know the law and are trying to save money on pension and health insurance by registering you on the sly as an IC.
2. They don't know the law and are just going on what they heard from other hakwon directors or the hakwon association.
3. They know the law and are trying to save some money by paying the correct rate and pocketing the excess.
I would say for most it's a combination of 1 and 3.
Why? It took me about 30 seconds to Google it and find the information. It should be just as easy for directors to do that too...or they could just call the tax office and find out in the same amount of time. I refuse to believe that with either option being so free and easy that it's just a case of willful ignorance for most.. |
The most common reason is #2. Even some Professional Accountants in Korea believe that all foreigners have to pay 3.3%. Some accountants recommend to their clients a 5% withholding rate for foreign workers to make sure that their clients aren't held responsible later for any unpaid taxes by the foreigner.
Over 10 years ago, when working for a new wonjangnim, the question of taxes came up. The wonjangnim relied on a Korean accountant who suggested 5%. I said that was way too high, so the accountant relented to 3.3% as the standard for foreigners - and this was confirmed by the Tax office as correct. At this time most Dave's posters thought 3.3% was correct as well.
Finding a link to the NTS withholding site gave the correct info. The Tax Office then told the wonjangnim that using the Withholding Calculator was better, but that 3.3% was acceptable as well. The Professional Accountant was outraged and insulted, however - after all, he was the expert with years of experience and he was older. He demanded that the school use 3.3%. The wonjangnim used the withholding calculator and found a different accountant.
The belief in the 3.3% withholding rate for foreigners is like the belief in fan death ... It's wrong, but it won't go away. |
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wooden nickels
Joined: 23 May 2010
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| Posted: Thu Aug 29, 2013 6:52 am Post subject: |
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| ontheway wrote: |
| TheUrbanMyth wrote: |
| OBwannabe wrote: |
| Porksta wrote: |
| If you are coming to Korea on an E-2, 3.3% is the magic number for a job NOT to take. |
I never understood this and I wish I did. So many one here say if their employer is deducting 3.3% for income tax then their employer is screwing them.
I worked at the same hagwon for 5 years and they always deducted 3.3% for income tax. I had the pension and health deductions/benefits as well.
This school was rarely cheap and gave bonuses when they didn't need to.
They always paid on time (including OT) and in full.
I've since been offered several contracts from other hagwons that have the same 3.3% deduction. Including the hagwon that I just signed with. They seem very legit and the teachers who are currently there seem happy.
Are we really sure that 3.3% is an incorrect amount to be deducting? Or are we just jumping on the bandwagon? |
According to the Korean National Tax service it would appear to be
http://call.nts.go.kr/JFAQ/view.jsp?q_id=10663
Scroll about 2/3rds down the page and see the difference between the IC rate and the employee rate
As to why hakwons use the 3.3% rate there are three reasons.
1. They know the law and are trying to save money on pension and health insurance by registering you on the sly as an IC.
2. They don't know the law and are just going on what they heard from other hakwon directors or the hakwon association.
3. They know the law and are trying to save some money by paying the correct rate and pocketing the excess.
I would say for most it's a combination of 1 and 3.
Why? It took me about 30 seconds to Google it and find the information. It should be just as easy for directors to do that too...or they could just call the tax office and find out in the same amount of time. I refuse to believe that with either option being so free and easy that it's just a case of willful ignorance for most.. |
The most common reason is #2. Even some Professional Accountants in Korea believe that all foreigners have to pay 3.3%. Some accountants recommend to their clients a 5% withholding rate for foreign workers to make sure that their clients aren't held responsible later for any unpaid taxes by the foreigner.
Over 10 years ago, when working for a new wonjangnim, the question of taxes came up. The wonjangnim relied on a Korean accountant who suggested 5%. I said that was way too high, so the accountant relented to 3.3% as the standard for foreigners - and this was confirmed by the Tax office as correct. At this time most Dave's posters thought 3.3% was correct as well.
Finding a link to the NTS withholding site gave the correct info. The Tax Office then told the wonjangnim that using the Withholding Calculator was better, but that 3.3% was acceptable as well. The Professional Accountant was outraged and insulted, however - after all, he was the expert with years of experience and he was older. He demanded that the school use 3.3%. The wonjangnim used the withholding calculator and found a different accountant.
The belief in the 3.3% withholding rate for foreigners is like the belief in fan death ... It's wrong, but it won't go away. |
BS
These days most wonjangnims will know the laws and rules of the business. It's to their advantage so they can take advantage. You can bet that they aren't paying in any more in taxes than they must. This includes taxes on their (the business income) income and it also means knowing the tax amount on their teachers' income.
I know some hogwon owners quite well, and all of them are sharp when it comes to knowledge on taxes, laws, rules, and regulations. Now I'm not saying they follow everything to a tee. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Thu Aug 29, 2013 6:58 am Post subject: |
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| wooden nickels wrote: |
| ontheway wrote: |
| TheUrbanMyth wrote: |
| OBwannabe wrote: |
| Porksta wrote: |
| If you are coming to Korea on an E-2, 3.3% is the magic number for a job NOT to take. |
I never understood this and I wish I did. So many one here say if their employer is deducting 3.3% for income tax then their employer is screwing them.
I worked at the same hagwon for 5 years and they always deducted 3.3% for income tax. I had the pension and health deductions/benefits as well.
This school was rarely cheap and gave bonuses when they didn't need to.
They always paid on time (including OT) and in full.
I've since been offered several contracts from other hagwons that have the same 3.3% deduction. Including the hagwon that I just signed with. They seem very legit and the teachers who are currently there seem happy.
Are we really sure that 3.3% is an incorrect amount to be deducting? Or are we just jumping on the bandwagon? |
According to the Korean National Tax service it would appear to be
http://call.nts.go.kr/JFAQ/view.jsp?q_id=10663
Scroll about 2/3rds down the page and see the difference between the IC rate and the employee rate
As to why hakwons use the 3.3% rate there are three reasons.
1. They know the law and are trying to save money on pension and health insurance by registering you on the sly as an IC.
2. They don't know the law and are just going on what they heard from other hakwon directors or the hakwon association.
3. They know the law and are trying to save some money by paying the correct rate and pocketing the excess.
I would say for most it's a combination of 1 and 3.
Why? It took me about 30 seconds to Google it and find the information. It should be just as easy for directors to do that too...or they could just call the tax office and find out in the same amount of time. I refuse to believe that with either option being so free and easy that it's just a case of willful ignorance for most.. |
The most common reason is #2. Even some Professional Accountants in Korea believe that all foreigners have to pay 3.3%. Some accountants recommend to their clients a 5% withholding rate for foreign workers to make sure that their clients aren't held responsible later for any unpaid taxes by the foreigner.
Over 10 years ago, when working for a new wonjangnim, the question of taxes came up. The wonjangnim relied on a Korean accountant who suggested 5%. I said that was way too high, so the accountant relented to 3.3% as the standard for foreigners - and this was confirmed by the Tax office as correct. At this time most Dave's posters thought 3.3% was correct as well.
Finding a link to the NTS withholding site gave the correct info. The Tax Office then told the wonjangnim that using the Withholding Calculator was better, but that 3.3% was acceptable as well. The Professional Accountant was outraged and insulted, however - after all, he was the expert with years of experience and he was older. He demanded that the school use 3.3%. The wonjangnim used the withholding calculator and found a different accountant.
The belief in the 3.3% withholding rate for foreigners is like the belief in fan death ... It's wrong, but it won't go away. |
BS
These days most wonjangnims will know the laws and rules of the business. It's to their advantage so they can take advantage. You can bet that they aren't paying in any more in taxes than they must. This includes taxes on their (the business income) income and it also means knowing the tax amount on their teachers' income.
I know some hogwon owners quite well, and all of them are sharp when it comes to knowledge on taxes, laws, rules, and regulations. Now I'm not saying they follow everything to a tee. |
In my experience most hogwan owners do NOT know the rules. They rely on others to tell them what they are. They believe what the people they trust tell them. |
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TheUrbanMyth
Joined: 28 Jan 2003
Location: Retired
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| Posted: Thu Aug 29, 2013 5:06 pm Post subject: |
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| wooden nickels wrote: |
| ontheway wrote: |
| TheUrbanMyth wrote: |
| OBwannabe wrote: |
| Porksta wrote: |
| If you are coming to Korea on an E-2, 3.3% is the magic number for a job NOT to take. |
I never understood this and I wish I did. So many one here say if their employer is deducting 3.3% for income tax then their employer is screwing them.
I worked at the same hagwon for 5 years and they always deducted 3.3% for income tax. I had the pension and health deductions/benefits as well.
This school was rarely cheap and gave bonuses when they didn't need to.
They always paid on time (including OT) and in full.
I've since been offered several contracts from other hagwons that have the same 3.3% deduction. Including the hagwon that I just signed with. They seem very legit and the teachers who are currently there seem happy.
Are we really sure that 3.3% is an incorrect amount to be deducting? Or are we just jumping on the bandwagon? |
According to the Korean National Tax service it would appear to be
http://call.nts.go.kr/JFAQ/view.jsp?q_id=10663
Scroll about 2/3rds down the page and see the difference between the IC rate and the employee rate
As to why hakwons use the 3.3% rate there are three reasons.
1. They know the law and are trying to save money on pension and health insurance by registering you on the sly as an IC.
2. They don't know the law and are just going on what they heard from other hakwon directors or the hakwon association.
3. They know the law and are trying to save some money by paying the correct rate and pocketing the excess.
I would say for most it's a combination of 1 and 3.
Why? It took me about 30 seconds to Google it and find the information. It should be just as easy for directors to do that too...or they could just call the tax office and find out in the same amount of time. I refuse to believe that with either option being so free and easy that it's just a case of willful ignorance for most.. |
The most common reason is #2. Even some Professional Accountants in Korea believe that all foreigners have to pay 3.3%. Some accountants recommend to their clients a 5% withholding rate for foreign workers to make sure that their clients aren't held responsible later for any unpaid taxes by the foreigner.
Over 10 years ago, when working for a new wonjangnim, the question of taxes came up. The wonjangnim relied on a Korean accountant who suggested 5%. I said that was way too high, so the accountant relented to 3.3% as the standard for foreigners - and this was confirmed by the Tax office as correct. At this time most Dave's posters thought 3.3% was correct as well.
Finding a link to the NTS withholding site gave the correct info. The Tax Office then told the wonjangnim that using the Withholding Calculator was better, but that 3.3% was acceptable as well. The Professional Accountant was outraged and insulted, however - after all, he was the expert with years of experience and he was older. He demanded that the school use 3.3%. The wonjangnim used the withholding calculator and found a different accountant.
The belief in the 3.3% withholding rate for foreigners is like the belief in fan death ... It's wrong, but it won't go away. |
BS
These days most wonjangnims will know the laws and rules of the business. It's to their advantage so they can take advantage. You can bet that they aren't paying in any more in taxes than they must. This includes taxes on their (the business income) income and it also means knowing the tax amount on their teachers' income.
I know some hogwon owners quite well, and all of them are sharp when it comes to knowledge on taxes, laws, rules, and regulations. Now I'm not saying they follow everything to a tee. |
In my experience I have met ONE WJN who was up to date with the rules. Mr ontheway also backs this up with his experience.
So yes there are a number of hagwon owners who are fairly clueless. But yes like you I don't think it's the reason for most employers who implement the 3.3% tax rate. Just because it's so readily available from either Google or the Tax office. Maybe back in the starting days it was word of mouth but nowadays..it takes about 30-60 seconds to Google or call the tax office.
I really can't see most hakwon owners sinking tens of millions of won into a hakwon but not bothering to verify tax rates with a 30 second call. Not these days anyway. Although it is possible it could be like the belief in fan death...they think they know and don't bother to verify it...  |
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wooden nickels
Joined: 23 May 2010
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| Posted: Thu Aug 29, 2013 8:31 pm Post subject: |
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I have set up (opened up) 2 English hakwons of my own in the past 10 years. Also, I've helped some friends set up 2 English hakwons and 2 math hakwons. There are a lot of regulations that one must meet and rules and laws that one needs to go over to be licensed to open the business.
Most of the owners out there who are claiming not to know are just playing 'the ignorance of the law' card. They know what's going on. Sure they will tell you, "It's 3.3%," with a straight face. It's the same situation as when a traffic officer pulls over a speeding car for going 70 in a 60 zone. The driver of the car is going to say something like, "oh I didn't know~."
Anyone who thinks that most of the hakwon owners don't know the numbers and all the little loop holes these days, well that person isn't that knowledgeable about what's going on behind the curtains. |
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Waygeek
Joined: 27 Feb 2013
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| Posted: Fri Aug 30, 2013 12:42 am Post subject: Re: Taxes? What is take home pay for 2.1? Contract doesn't m |
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| ttompatz wrote: |
| cat12345 wrote: |
tion health insurance? This is what it says, exactly: CLAUSE 7 (TAX)
Income tax and residence taxes of 3.3% will be deducted off the salary according to the Korean
tax law.
I understand this means that I am a contractor, not an actual employee?
Does this mean I am on my own for medical bills? |
It means, bend over and add lube.
. |
If he can afford it, with no medical... |
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wooden nickels
Joined: 23 May 2010
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| Posted: Fri Aug 30, 2013 6:53 am Post subject: |
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Anyone out there claiming a lot of hakwon owners don't know that the tax isn't 3.3% for 2.0-2.4ish mil salaries for visa sponsored employees falls into one of the following categories:
a) hasn't been around the hakwon business very long
b) is a thieving hakwon owner
c) is a dishonest recruiter trying to polish over deceptive contracts
Sorry if any of you folks out there fall into b) or c). But a duck is a duck. |
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