Korean Job Discussion Forums

rok_the-boat · Joined: 24 Jan 2004

I just heard a new tax system is in effect and have been told by my school that it only applies to foreigners. And it is to our benefit! Apparently, the first 30% of your income is not taxed. Can anyone else confirm this?

Something tells me this could be expolited by certain Hagwons ... like, they won't tell their employees and keep that 30%. Watch your pay-checks!

Also, you might want to check 'how' your employer ascertains your tax. My school is pretty good and efficient. I give them copies of my car insurance, child's school fees, and other such stuff - all of which are not to be counted in the calcualtion of your gross salary for tax purposes - meaning, I will get some tax back. I wonder how many Hagwons do that for you?

hellofaniceguy · Joined: 10 Jan 2003 Location: On your computer screen!

It's SO EASY to verify...a new tax law in effect. Just go to the local NTS tax office! And ask them.

diablo3 · Joined: 11 Sep 2004

First we are given alien registration cards, now be given an alien tax system (maybe not termed this way) and so what is next?

Anyway, does this tax law (if it is for real) applicable to all foreigners in and not in the ESL industry?

ulsanchris · Joined: 19 Jun 2003 Location: take a wild guess

Do I understand this right. From now on they will calculate the tax you pay based on a salary scale 30 percent less than your actual salary.

so if you are paid 2,000,000 they will calculate your salary from 1,400,000.

rok_the-boat · Joined: 24 Jan 2004

As I understand it - it is good for us.

If you earn W1,000,000, previously you were taxed, say 10%, on the whole million. A recent pay slip I got verifies this.

Now, the first W300,000, or 30% is tax free and you are only taxed on the remaining W700,000, or 70%.

That means, you pay less tax, and my school said it only applies to foreigners. Koreans pay full whack. At least, that is how I understood it. I was told it appliesto all foreigners - but you never know - it could just be my school (I doubt it). That is why I wondered if anyone else of heard of it.

Zed · Joined: 20 Jan 2003 Location: Shakedown Street

You're paying 10% tax?

diablo3 · Joined: 11 Sep 2004

Actually, it sounds like more tax. Those earning 2 million were taxed at 5%. To be taxed at 10%, you needed to earn a bit more than 2 million.

Correct me if I am wrong

hellofaniceguy · Joined: 10 Jan 2003 Location: On your computer screen!

The uni I was at...no one was taxed. And to this day...no teachers pay tax nor do they pay into the pension. Work full time....pay is over 2.2 and no tax. Go figure. I did not question why the no tax...just accepted.
I do know that many teachers are taxed at 3.3% on a salary of 2.0. But 10%? I think not.
It's easy to find out...just go to the tax office and ask them.
Many teachers are "taxed" for the unemployment insyrance...but why pay? As a foreigner...you can't collect unemployment! So....why pay?

Real Reality · Joined: 10 Jan 2003 Location: Seoul

hellofaniceguy wrote,
"Many teachers are "taxed" for the unemployment insyrance...but why pay? As a foreigner...you can't collect unemployment! So....why pay?"

Well, it is not like you have to leave Korea if you are unemployed. Oh wait. You do have to leave Korea if you are unemployed.

You have to support your Korean co-worker that may become unemployed.

According to the Labor Ministry, a whopping 426,625 new unemployed workers applied for unemployment compensation as of the end of November. The record of 438,465 was set in 1998 when the country was struck by a major financial crisis that led to an International Monetary Fund bailout program. Faced with financial difficulties, many firms at the time conducted massive layoffs as part of restructuring.
Job seekers pessimistic about outlook as economic slump continues
By Lee Sun-young, The Korea Herald (December 24, 2004)
http://www.koreaherald.co.kr/SITE/data/html_dir/2004/12/24/200412240022.asp

Tax Changes for 2005
http://www.eslcafe.com/forums/korea/viewtopic.php?t=31414

rok_the-boat · Joined: 24 Jan 2004

The numbers I used were just examples - someone asked, surprised, if I pay 10% yet did not ask if I only earn a million a month. Those numbers are examples. I thought that was obvious ...

Zed · Joined: 20 Jan 2003 Location: Shakedown Street

rok_the-boat · Joined: 24 Jan 2004

OK OK - the recent payslip verifies the 'overall' idea. Reduced tax.

HamuHamu · Joined: 01 May 2003 Location: Seoul

Is the Resident Tax still calculated as 10% of the total income tax?

(Yes, I know that Res Tax is only about 5,000 won a month...I'm just curious...)

rok_the-boat · Joined: 24 Jan 2004

Resident tax has nothing to do with income tax. Your town just taxes you for your existence. That being said, I am not sure why some are taxed slightly differently to others.

prairieboy · Joined: 14 Sep 2003 Location: The batcave.

Residence tax is still calculated at 10% of your income tax. You can go to the National Tax Services web page and calculate your tax refund under the new rules.

Check it out here: http://211.234.113.70/year_end/jungsan2004/eng/refer_2004jungsan_eng.asp

After finishing the calculation, the page notes your residence tax is 10% of your total payable income tax.

Cheers