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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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 Posted: Fri Aug 30, 2013 7:36 am Post subject: |
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| Anyone who wrote: |
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. |
is talking out of his arse and has no experience with actual hogwan owners. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Fri Aug 30, 2013 8:11 am Post subject: |
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The fact is that there are too many rules for anyone to keep up on. So, hogwan owners in Korea, like business owners in the US and elsewhere, rely on experts and people they trust for information.
In depth experience in Korea will include spending time with the Korean Public Accountants - who commonly believe that 3.3% is the correct rate for foreigners, because it's true, they know it's true and they won't believe anyone who tells them otherwise and won't check because how dare we question the expert.
In depth experience in Korea will reveal that most hogwan owners don't do their own taxes, but rely on one of those accountants who insists the correct rate is 3.3% or they've heard it from other hogwan owners or the hogwan association or a friend or relative all of whom are experts, so they believe it.
*****
In another earlier case from my experience, I had a hogwan boss who had no clue about any rules regarding foreign teachers. I had to explain and research everything. I wrote my own contract, took care of all the Immigration and Visa run arrangements, and provided my own payroll summary each month, since I refused to work or be paid without one.
This wonjangnim was an English teacher - but with little business experience - and knew nothing about the correct tax rates. So nothing was withheld at all from my pay for taxes. It took my boss 11 months to finally contact the tax office and get the correct withholding. Finally after a year, the correct amount from the tax office - less that 1.5% for the year - was withheld.
*****
Most people in the world are completely ignorant about almost everything. They're lucky to know how to do a single thing well enough to earn a living at it. For everything else in life they rely upon others, and if they don't talk out of their arses, they can get by.
It's funny how some posters assume that hogwan owners are the exception - superhuman, omniscient con-artists who trick and cheat the ignorant foreigners. These posters pretend to have experience and be wiser than the others. However, their "facts" are nonsense and delusions. Hopefully these posters actually know something about at least one thing so that they can earn a living over the long term.
Yes, there are crooked bosses who have experience and have specialized in cheating. This is the one thing they know how to do well. These are a small percentage of the total.
Fortunately, crooks eventually get caught, crooked business eventually fail, bad hogwans go out of business, bad pennies go out of circulation, and other fake coinage will be exposed.
Unfortunately, dumb people will always rule the world. Most are not bad people, not crooks, they even have good intentions, but they comprise a 98% majority and although they have no clue (beyond the one thing they do to earn a living) about how anything in the world works, they will always rule. |
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wooden nickels
Joined: 23 May 2010
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| Posted: Fri Aug 30, 2013 8:56 am Post subject: |
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| ontheway wrote: |
| Anyone who wrote: |
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. |
is talking out of his arse and has no experience with actual hogwan owners. |
My wife and I own a hogwan and we have several good friends who have hagwons. Three of those friends my wife has know since her childhood. You are claiming that I'm a liar on what basis? Anger? I'm well aware of what I'm talking about. |
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wooden nickels
Joined: 23 May 2010
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| Posted: Fri Aug 30, 2013 9:02 am Post subject: |
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| ontheway wrote: |
The fact is that there are too many rules for anyone to keep up on. So, hogwan owners in Korea, like business owners in the US and elsewhere, rely on experts and people they trust for information.
In depth experience in Korea will include spending time with the Korean Public Accountants - who commonly believe that 3.3% is the correct rate for foreigners, because it's true, they know it's true and they won't believe anyone who tells them otherwise and won't check because how dare we question the expert.
In depth experience in Korea will reveal that most hogwan owners don't do their own taxes, but rely on one of those accountants who insists the correct rate is 3.3% or they've heard it from other hogwan owners or the hogwan association or a friend or relative all of whom are experts, so they believe it.
*****
In another earlier case from my experience, I had a hogwan boss who had no clue about any rules regarding foreign teachers. I had to explain and research everything. I wrote my own contract, took care of all the Immigration and Visa run arrangements, and provided my own payroll summary each month, since I refused to work or be paid without one.
This wonjangnim was an English teacher - but with little business experience - and knew nothing about the correct tax rates. So nothing was withheld at all from my pay for taxes. It took my boss 11 months to finally contact the tax office and get the correct withholding. Finally after a year, the correct amount from the tax office - less that 1.5% for the year - was withheld.
*****
Most people in the world are completely ignorant about almost everything. They're lucky to know how to do a single thing well enough to earn a living at it. For everything else in life they rely upon others, and if they don't talk out of their arses, they can get by.
It's funny how some posters assume that hogwan owners are the exception - superhuman, omniscient con-artists who trick and cheat the ignorant foreigners. These posters pretend to have experience and be wiser than the others. However, their "facts" are nonsense and delusions. Hopefully these posters actually know something about at least one thing so that they can earn a living over the long term.
Yes, there are crooked bosses who have experience and have specialized in cheating. This is the one thing they know how to do well. These are a small percentage of the total.
Fortunately, crooks eventually get caught, crooked business eventually fail, bad hogwans go out of business, bad pennies go out of circulation, and other fake coinage will be exposed.
Unfortunately, dumb people will always rule the world. Most are not bad people, not crooks, they even have good intentions, but they comprise a 98% majority and although they have no clue (beyond the one thing they do to earn a living) about how anything in the world works, they will always rule. |
The hogwon owners that I'm familiar with and their accountants seem to be very familiar with the rules and the percentages.
Are you a recruiter? I will repeat. Are you a recruiter? |
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wooden nickels
Joined: 23 May 2010
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| Posted: Fri Aug 30, 2013 9:22 am Post subject: |
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| ontheway wrote: |
The fact is that there are too many rules for anyone to keep up on. So, hogwan owners in Korea, like business owners in the US and elsewhere, rely on experts and people they trust for information.
In depth experience in Korea will include spending time with the Korean Public Accountants - who commonly believe that 3.3% is the correct rate for foreigners, because it's true, they know it's true and they won't believe anyone who tells them otherwise and won't check because how dare we question the expert.
In depth experience in Korea will reveal that most hogwan owners don't do their own taxes, but rely on one of those accountants who insists the correct rate is 3.3% or they've heard it from other hogwan owners or the hogwan association or a friend or relative all of whom are experts, so they believe it.
*****
In another earlier case from my experience, I had a hogwan boss who had no clue about any rules regarding foreign teachers. I had to explain and research everything. I wrote my own contract, took care of all the Immigration and Visa run arrangements, and provided my own payroll summary each month, since I refused to work or be paid without one.
This wonjangnim was an English teacher - but with little business experience - and knew nothing about the correct tax rates. So nothing was withheld at all from my pay for taxes. It took my boss 11 months to finally contact the tax office and get the correct withholding. Finally after a year, the correct amount from the tax office - less that 1.5% for the year - was withheld.
*****
Most people in the world are completely ignorant about almost everything. They're lucky to know how to do a single thing well enough to earn a living at it. For everything else in life they rely upon others, and if they don't talk out of their arses, they can get by.
It's funny how some posters assume that hogwan owners are the exception - superhuman, omniscient con-artists who trick and cheat the ignorant foreigners. These posters pretend to have experience and be wiser than the others. However, their "facts" are nonsense and delusions. Hopefully these posters actually know something about at least one thing so that they can earn a living over the long term.
Yes, there are crooked bosses who have experience and have specialized in cheating. This is the one thing they know how to do well. These are a small percentage of the total.
Fortunately, crooks eventually get caught, crooked business eventually fail, bad hogwans go out of business, bad pennies go out of circulation, and other fake coinage will be exposed.
Unfortunately, dumb people will always rule the world. Most are not bad people, not crooks, they even have good intentions, but they comprise a 98% majority and although they have no clue (beyond the one thing they do to earn a living) about how anything in the world works, they will always rule. |
No. Everyone isn't as ignorant as you assume. Some people do have lots of experience doing many things and are quite capable at making a living doing more than one thing.
For the most part you just came out with false accusations against me, some in a round about way.
I will just leave it at this; obviously you must be surrounded by a lot of dumb arsheshes because the people I commonly deal with a far more intelligent and knowledgable than the people whom you've described. |
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wooden nickels
Joined: 23 May 2010
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| Posted: Fri Aug 30, 2013 4:03 pm Post subject: |
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Yes. ontheway is a recruiter who has defended the idea of hiring people as Independent Contractors, though he knows it is a deceiving move on many. Now he comes on here claiming innocence about the 3.3% tax and that most hakwon owners who are screwing you over are nothing but innocent victims of the system themselves.
Bull Malarchy |
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curlyhoward
Joined: 03 Dec 2008
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| Posted: Fri Aug 30, 2013 4:53 pm Post subject: |
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Remember, the recruiter is attempting to sell you a contract. That's how he makes his money. That rust bucket klonker of a contract that his grandmother drove to church only on Sundays when it wasn't raining contract. |
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I-am-me
Joined: 21 Feb 2006
Location: Hermit Kingdom
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| Posted: Tue Sep 03, 2013 6:32 am Post subject: |
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| I've never met an independent contractor. Is there such a thing? Or are those here on tourists visas or student visas? |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Tue Sep 03, 2013 7:20 am Post subject: |
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| wooden nickels wrote: |
Yes. ontheway is a recruiter who has defended the idea of hiring people as Independent Contractors, though he knows it is a deceiving move on many. Now he comes on here claiming innocence about the 3.3% tax and that most hakwon owners who are screwing you over are nothing but innocent victims of the system themselves.
Bull Malarchy |
Since you can't even comprehend simple English in written form, I doubt that you know anyone with any intelligence.
I have always stated that the IC status is legal, because it is. No one has ever been able to show any evidence to the contrary - because there is none.
OTOH, I have always written that E2 teachers in nearly all cases should watch out for and refuse IC contracts. There may be a few who benefit from such contracts, but most will lose. Furthermore, since it's legal to be an IC on an E2, they cannot expect the government to bail them out if they take an IC job - so they should just say no.
Since you can't comprehend what you read, there is no need to listen to anything you post. Whatever observation you make will be inaccurately reported and without any logical reasoning. |
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12ax7
Joined: 07 Nov 2009
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| Posted: Tue Sep 03, 2013 7:42 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. |
Over 10 years ago is when people were only starting to get the hang of the internet here in Korea and the government was supplying very little information online or services over the phone. Today, any business owner who is competent (and I'm not suggesting they all are) would know how to find the right info. |
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wooden nickels
Joined: 23 May 2010
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| Posted: Tue Sep 03, 2013 8:21 am Post subject: |
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| ontheway wrote: |
| wooden nickels wrote: |
Yes. ontheway is a recruiter who has defended the idea of hiring people as Independent Contractors, though he knows it is a deceiving move on many. Now he comes on here claiming innocence about the 3.3% tax and that most hakwon owners who are screwing you over are nothing but innocent victims of the system themselves.
Bull Malarchy |
Since you can't even comprehend simple English in written form, I doubt that you know anyone with any intelligence.
I have always stated that the IC status is legal, because it is. No one has ever been able to show any evidence to the contrary - because there is none.
OTOH, I have always written that E2 teachers in nearly all cases should watch out for and refuse IC contracts. There may be a few who benefit from such contracts, but most will lose. Furthermore, since it's legal to be an IC on an E2, they cannot expect the government to bail them out if they take an IC job - so they should just say no.
Since you can't comprehend what you read, there is no need to listen to anything you post. Whatever observation you make will be inaccurately reported and without any logical reasoning. |
no need to listen to anything you post
Audio Files?  |
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TheUrbanMyth
Joined: 28 Jan 2003
Location: Retired
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| Posted: Wed Sep 04, 2013 6:23 pm Post subject: |
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More info from the tax office:
| Quote: |
If you teach English as an independent contractor and are not under any
employment agreement with the income payer("hakwon"), then the compensation
you receive for teaching is classified as “business income.” In this case, hakwon is
required to withhold an amount equivalent to 3.3%(resident tax included) of your
monthly pay from you each month, and you must make a final declaration of
your income tax in May of the following year.
If you have an employment contract with the hakwon, then your compensation is
categorized under “Wage and salary income,” for which your employer (hakwon)
is subject to the liability of monthly withholding at an amount based on the
Simplified Tax Table. As of November 2012, the amount subject to income tax
(residence surtax included) withholding on ￦2,000,000 in salary (1 Deductible
persons including taxpayer) is ￦19,330. You may check this through NTS
English website (www.nts.go.kr/eng→Help Desk→Quick Viewer Service→My
withholding Income Tax Calculator)
Please keep in mind premiums for National Pension and Social Insurance are
also deducted from your monthly salary. Please refer to case 7 regarding
National Pension and Social Insurance Premium Deduction. |
Well well well...look at that.
Apparently if you are an independent contractor you are NOT under "any" employment agreement with the hakwon.
And if you do have an employment agreement with the hakwon you ARE an employee.
http://www.nts.go.kr/eng/resources/resour_21.asp?minfoKey=MINF7420080211223143
(you will have to download the "Tax Guide for Foreign Taxpayers" file as PDF and can find the quote above on page 55). |
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hogwonguy1979
Joined: 22 Dec 2003
Location: the racoon den
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| Posted: Wed Sep 04, 2013 6:57 pm Post subject: |
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| TheUrbanMyth wrote: |
More info from the tax office:
| Quote: |
If you teach English as an independent contractor and are not under any
employment agreement with the income payer("hakwon"), then the compensation
you receive for teaching is classified as “business income.” In this case, hakwon is
required to withhold an amount equivalent to 3.3%(resident tax included) of your
monthly pay from you each month, and you must make a final declaration of
your income tax in May of the following year.
If you have an employment contract with the hakwon, then your compensation is
categorized under “Wage and salary income,” for which your employer (hakwon)
is subject to the liability of monthly withholding at an amount based on the
Simplified Tax Table. As of November 2012, the amount subject to income tax
(residence surtax included) withholding on ￦2,000,000 in salary (1 Deductible
persons including taxpayer) is ￦19,330. You may check this through NTS
English website (www.nts.go.kr/eng→Help Desk→Quick Viewer Service→My
withholding Income Tax Calculator)
Please keep in mind premiums for National Pension and Social Insurance are
also deducted from your monthly salary. Please refer to case 7 regarding
National Pension and Social Insurance Premium Deduction. |
Well well well...look at that.
Apparently if you are an independent contractor you are NOT under "any" employment agreement with the hakwon.
And if you do have an employment agreement with the hakwon you ARE an employee.
http://www.nts.go.kr/eng/resources/resour_21.asp?minfoKey=MINF7420080211223143
(you will have to download the "Tax Guide for Foreign Taxpayers" file as PDF and can find the quote above on page 55). |
and you just nailed why people on E2s cant be IC's. To get an E2 etc visa you have to be a regular employee of a business, thats immigration rule, by not registering you as an IC they are violating immigration's rule and I bet they would fine the employer if if was higher on their priorities |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Thu Sep 05, 2013 6:29 am Post subject: |
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| hogwonguy1979 wrote: |
| TheUrbanMyth wrote: |
More info from the tax office:
| Quote: |
If you teach English as an independent contractor and are not under any
employment agreement with the income payer("hakwon"), then the compensation
you receive for teaching is classified as “business income.” In this case, hakwon is
required to withhold an amount equivalent to 3.3%(resident tax included) of your
monthly pay from you each month, and you must make a final declaration of
your income tax in May of the following year.
If you have an employment contract with the hakwon, then your compensation is
categorized under “Wage and salary income,” for which your employer (hakwon)
is subject to the liability of monthly withholding at an amount based on the
Simplified Tax Table. As of November 2012, the amount subject to income tax
(residence surtax included) withholding on ￦2,000,000 in salary (1 Deductible
persons including taxpayer) is ￦19,330. You may check this through NTS
English website (www.nts.go.kr/eng→Help Desk→Quick Viewer Service→My
withholding Income Tax Calculator)
Please keep in mind premiums for National Pension and Social Insurance are
also deducted from your monthly salary. Please refer to case 7 regarding
National Pension and Social Insurance Premium Deduction. |
Well well well...look at that.
Apparently if you are an independent contractor you are NOT under "any" employment agreement with the hakwon.
And if you do have an employment agreement with the hakwon you ARE an employee.
http://www.nts.go.kr/eng/resources/resour_21.asp?minfoKey=MINF7420080211223143
(you will have to download the "Tax Guide for Foreign Taxpayers" file as PDF and can find the quote above on page 55). |
and you just nailed why people on E2s cant be IC's. To get an E2 etc visa you have to be a regular employee of a business, thats immigration rule, by not registering you as an IC they are violating immigration's rule and I bet they would fine the employer if if was higher on their priorities |
You need to read the above more carefully.
If you are an IC - an Independent Contractor - then of course you have a contract. As long as that contract is not "an employment agreement" you are an IC and not an employee. So, this only confirms that you can be either an employee or an IC depending on your contract.
As for Immigraion rules, there is no rule that an E2 visa holder have an employee contract. Immigration accepts contracts for employees or ICs for E2s. The rule is that you have a sponsor who will take financial responsibility for you and that you have an income or means of support in Korea. This is satisfied by being either an IC or an employee.
This information just confirms that it's perfectly legal to be an IC as an E2 visa holder. |
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Mike410
Joined: 23 Sep 2011
Location: Canada
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| Posted: Sun Sep 08, 2013 6:31 pm Post subject: |
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So what is the actual tax rate that should be stated on a contract for an employee?
Is it not 6% for up to 12 million won?
I do see a lot of contracts that have the 3.3% income tax... |
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