Korean Job Discussion Forums

[Emark]

I just got a request from my school to fill out a bunch of tax forms. Been in Korea as early as 2004 and have never been asked to do this.

Now I'm a little worried too reading about back penalties and such.

Oh well. Fill out the 6 pages of invasive personal financial information and then wait & see.

[fustiancorduroy]

I've gotten an income earnings report and filed my taxes every year I've worked in Korea. What have you guys been doing?

[No_hite_pls]

[Stan Rogers]

[Worlder]

Yeah, it happened to me a year ago. I suddenly got a tax bill in the thousands, citing some 17% rule. I was also under the impression that the 3.3% covered it, and was handled by the employer. Apparently not.

[Rockhard]

[FriendlyDaegu]

[Worlder]

No, I asked for that paper, multiple times. They said, "Sure. No problem." But I'd already changed agencies, and paid the tax bill, so after a month of asking I just gave up. I'm pretty sure they did pay the 3.3%, I think the tax form mentioned it somewhere, but I'm just disappointed that the information about having to pay additional tax was not freely given.

[FriendlyDaegu]

The lesson here is that anyone who is paying a withholding of 3.3% is not an employee and MUST file their own taxes. If you don't, the NTS will calculate your taxes for you (without deductions, it sounds like) and come after you for the remainder. Hagwons should be making this known to their IC workers.

From the latest tax guide, the tax rate with no deductions/credits is W720,000 + 15% of the amount over 12M, for most salaries.

Real employees do not have to file; the employer must do it for them. The employer will give the refund with the March pay. If they have been doing the withholding properly, there will be a refund, and you should already know how much it will be.

If your employer is not asking for your deduction information in January, something is wrong. If they don't provide you with the 'Receipt for Wage & Salary Income Tax Withholding' by the end of February, something is very wrong, and you have only a couple weeks to get it sorted. The deadline for employers to file is March 10.

Honestly, Korea's tax system is much simpler than anywhere else I've been. Go to the NTS website, on the Resources/Publications page, and search for 'foreigners'. Download their Foreigners' Easy Guide for TY2013 to learn about all the deductions and credits you should be getting. Check your employer's calculations against the guide to make sure everything is on the up and up.

[Rockhard]

The part that tripped me up was being a sponsored foreign worker and being self-employed contractor at the same time. It just never occurred to me that you could be sponsored by a single employer, work there full time, and be outlawed from working anywhere else, yet still be considered self-employed and independent by the tax code.

The fact that independent contractor status STILL exists for those on E2 is really quite embarrassing for the Korean government. It's just so amateurish.

So yeah, I learned a lesson. Not the lesson that I should be responsible for my tax obligations. No, no. I learned that you can't trust the Korean government to even follow its only laws. I learned that you should always expect the worst from people. I learned that you should assume, fancy title or not, that people are as intelligent as flea larvae and treat the accordingly or you'll wind up with a nice big fine.

[FriendlyDaegu]

IMO, 99% of the blame should go to the hagwons who continue to classify workers as ICs despite the fact that the workers fall under the guidelines of regular employees (regular payment of wages, work on a schedule under boss's direction, follow company rules, etc.). They do this to reduce their share of benefit costs. If the owners were taken to task on this they would lose.

I agree with you, someone like MOEL should put out a directive that sponsored workers should all be regular employees. That would clear things up.

Until then, teachers who sign IC contracts should be aware of the downsides and should be compensated for the benefits they're losing.

[Rockhard]

I agree with what you are saying, but I would like to note that the institution to blame here is not MOEL, which has no authority, but the NTS. I fought with the NTS with this matter when it happened to me, providing all the proof I was indeed an employee, and they simply didn't want to hear it. They are not interested in enforcing their own laws. They've allowed Korean businesses to interpret the law as they see fit. And while the labour board has shown some sympathy towards foreigners, the tax service could not care less.

I would also like to say that IC status does work for SOME people, just not those on E2. As someone with F5 and who works short contracts, I am a REAL independent contractor and the status works for me.

[World Traveler]