Korean Job Discussion Forums

[Real Reality]

The tax rates on individual income range from 9% to 36%.
Income Tax
Tax Rates
1. Income: 10 million Won or less
Tax Rate: 9% of tax base
2. Income: 10 million Won - 40 million Won
Tax Rate: 0.9 million Won + 18% of the amount exceeding 10 million Won
3. Income: 40 million Won ?80 million Won
Tax Rate: 6.3 million Won + 27% of the amount exceeding 40 million Won
4. Income: Over 80 million Won
Tax Rate: 17.1 million Won + 36% of the amount exceeding 80 million Won
A. http://www.nts.go.kr/File/E/4/E/b/taxation2003_ch02_04.htm
B. http://www.nts.go.kr/New_english/guide_year/4TaxRates.htm
Korean Taxation 2003
http://www.nts.go.kr/New_english/taxation2003.htm

First, bonuses are taxable in a same way as ordinary basic salaries.
Accordingly, when you receive a bonus, you will unpleasantly find that your withholding salary tax increases more than the bonus amount. This is because of the progressive income tax structure.
Severance pay is also taxable but the income tax amount would be less than half of ordinary salary tax. It is because half of severance pay is tax- exempted and the remaining half is spread over the number of service years to apply lower tax rates.
Second, regarding taxability of housing allowances, your confusion is quite understandable. But both cases are right, sometimes it is taxable and sometimes not. When the university purchases or rents a residence under its name and provides it to expatriates, the housing benefits are not taxable for those expatriates.
When the university gives expatriates housing allowances, then the allowances are taxable as additional salaries. However, foreign service allowances, including housing allowances, are excludable up to one sixth of total remuneration (salary + bonus + allowances).
http://times.hankooki.com/lpage/biz/200211/kt2002112118561310750.htm

[GirlFromMars]

sorry to sound dumb but when does the tax year fall here? it's been different every country I've worked.

[Tancred]

i'm sorry to sound really dumb but what does all this mean? In layman's terms...for example, i'm getting my severenece pay next month, so how much tax will be taken off of it? Please let me know, if you do...i'd really appreciate it. i should be getting 2 mil. won severence...thanks....[/i][/b]

[Real Reality]

Generally, taxpayers use the calendar year as a tax year; January 1 through December 31.

When is the return for 2002 due?
The regular return period for the income accruing for the tax year concerned begins on May 1 and ends on May 31 next year.

If you are a foreign resident for the entire year, you have to file a final tax return in the same way as a Korean resident.

May not need to file a return if
A resident having only wages and salary income
A resident having only retirement income
A resident having only wages, salary income and retirement income
A person who has a only business income, which subject to tax pursuant to the provisions of income tax law and its presidential decree.
A resident having both wage and salary, and passive income such as interest, dividend or other income which is subject to separate taxation.

http://www.nts.go.kr/New_english/2003taxguide.htm

[GirlFromMars]

thanx RR, since i am starting end July, that works in my favour, at least the first year.

GFM


edit: geez what month is it now anyway

[Real Reality]

Tancred,

Approximately 160,000 Won

However, you may want to read more about the taxes and severance pay.
For more information on severance pay, go to
TAXATION. SEVERANCE PAY
http://efl-law.com/kr.tax.sp.htm

[Tancred]

thanks...

[Real Reality]

Koreans Pay Highest Property Tax in OECD
Koreans pay the highest property tax and second lowest personal income tax among the 30 members of the Organization for Economic Cooperation and Development (OECD), a report said Sunday.

But the ratio of personal income tax to total taxes was 12.8 percent, the second lowest after Slovakia with 10.2 percent. Denmark and New Zealand recorded the highest personal income tax burden with 53.2 percent and 42.3 percent, way above the average of 26.0. As for the ratio of corporate tax to total taxes, Korea ranked fifth at 12.8 percent following Luxemburg (20.5 percent), Norway (18.9), Australia (16.8 ) and Ireland (13.1). The average was 9.3 percent.
Chosun Ilbo (February 13, 2005)
http://english.chosun.com/w21data/html/news/200502/200502130018.html

Check Your Monthly Withholding Tax
http://152.99.73.5/front/service/refer_cal/gani/refer_gani_eng.asp

Income Tax Guide
http://nts.go.kr/menu/users/ntseng/Tax_Guide3.htm

Examples of Income Tax Calculation
http://nts.go.kr/NTS_files/eng/guide/3_Examples%20of%20Income%20Tax%20Calculation.pdf
One example is below.
Adam working for a private English school had Wage and Salary Income during 2004 as follows:
He earned ��3,000,000 every month. (For the sake of convenience, he is assumed to have no bonuses).
His family members are as follows: Adam (age 40), Mary (Adam's wife, age 35), David (Adam's son, age 5), Wilkins (Adam's Father, age 67).
He paid ��500,000 for life insurance premium, ��300,000 for national pension contribution, and ��1,000,000 for education fee for David in Korea.
He chose 30% exemption method under the article 18-2 of the RSTA.

The amount withheld monthly by his withholding agent (the school) is as follows:
Based on the Simplified Tax Withholding Table(2004), the amount withheld matching his situation is ��22,120 (other than Inhabitant tax) every month.
(The above example is from the National Tax Service.)

[Yesterday]

Sounds good to me compared to Australia tax - which is 33.33% on any money you earn......

The Seoul Metropolitan Ministry Of Education tax rate for foreign teachers
is 3.3%