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Porksta
Joined: 05 May 2011
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 Posted: Tue Nov 12, 2013 4:34 am Post subject: Quick Pension Question |
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| I got a yearly raise recently, but my pension contribution has stayed the same while my taxes, and health costs have gone up accordingly. I am contributing over 4.5% though, so I am not complaining just curious. Has there been some change recently with pension or is it still a flat 4.5% regardless of your income? |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Tue Nov 12, 2013 6:16 am Post subject: Re: Quick Pension Question |
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| Porksta wrote: |
| I got a yearly raise recently, but my pension contribution has stayed the same while my taxes, and health costs have gone up accordingly. I am contributing over 4.5% though, so I am not complaining just curious. Has there been some change recently with pension or is it still a flat 4.5% regardless of your income? |
When you come to Korea and start a new job, your National Pension tax will be set at approximately 9% of your monthly gross salary. It is not exactly 9%, it''s based on brackets. Employees and employers should each pay 1/2 of the monthly billed amount.
The Pension office bills this flat rate every month after that - they don't want change. So, there is no adjustment for overtime, or partial months: if you don't earn a full month's pay for any reason, you still pay the flat rate. If you get a raise of less than 30%, they don't want to hear about it and they won't change the billing. However, they do make adjustments after a year or two, based on a variety of factors, if you stay at the same job; although these adjustments are not aimed at returning you to 4.5% employee, or 9% total withholding. These policies mean that after the first year, or after any pay raise or adjustment, the Pension tax rate may no longer bear any relation to the original 4.5%. |
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Porksta
Joined: 05 May 2011
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| Posted: Tue Nov 12, 2013 7:38 pm Post subject: |
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| Okay, thanks! |
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YTMND
Joined: 16 Jan 2012
Location: You're the man now dog!!
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| Posted: Tue Nov 12, 2013 8:54 pm Post subject: |
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| Quote: |
| if you don't earn a full month's pay for any reason, you still pay the flat rate |
I am not sure about that. If you start on the 15th, then you would end on the 15th also. This means you would pay a flat rate for both 1st and 12th month. The 15 extra days in both months would come to a 13th month of pension money.
I think what they do instead is process paperwork after you completed a month, which is why it seems like it takes longer to get the paperwork finished. This way they can start each teacher on day 1. I am not certain they do it this way, just thinking it out. However, I doubt they would ask for 9% for teachers who arrive in the middle of a pay cycle.
Maybe they just treat the 12th month as completed halfway through? |
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FriendlyDaegu
Joined: 26 Aug 2012
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| Posted: Tue Nov 12, 2013 10:42 pm Post subject: |
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| My pension changes (goes up) in July of every year, so it looks like they only reassess once per year. |
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ontheway
Joined: 24 Aug 2005
Location: Somewhere under the rainbow...
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| Posted: Thu Nov 14, 2013 7:27 am Post subject: |
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| YTMND wrote: |
| Quote: |
| if you don't earn a full month's pay for any reason, you still pay the flat rate |
I am not sure about that. If you start on the 15th, then you would end on the 15th also. This means you would pay a flat rate for both 1st and 12th month. The 15 extra days in both months would come to a 13th month of pension money.
I think what they do instead is process paperwork after you completed a month, which is why it seems like it takes longer to get the paperwork finished. This way they can start each teacher on day 1. I am not certain they do it this way, just thinking it out. However, I doubt they would ask for 9% for teachers who arrive in the middle of a pay cycle.
Maybe they just treat the 12th month as completed halfway through? |
Yes, you are correct about there being a problem with beginning and ending months not being full months. I should have spelled this out.
The National Pension office bills for a full, flat-rate payment every calendar month, and does not adjust for raises (under 30%), OT or short hours, except when a new job begins on the 2nd of the month or later.
When your new job begins on any day after the first, your enrollment in National Pension will begin on the first of the next month. After that, every month you will be billed for the full, flat rate amount, including your final month, even if you only work one day. This avoids the problem of 13 full pension payments for a 12 month year. |
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