Korean Job Discussion Forums

[Snowkr]

hi everyone

I have a question regarding income taxes in Korea. If you're making 2.0 million monthly is it normal to have between 50,000 and 70,000 taken out for income tax and 40,000 taken out for health insurance?

I trust my employer completely and I love my school but I feel like I'm paying a lot in taxes. Then again, I'm a bit of a novice and have only been at this for 5 months so perhaps this really is normal!

Any input please?

[Grotto]

Check the post Tax rate under FAQ

income tax on 2 mil is about 30,000 a month

health is 1.8% which is about 36,000 a month

Taxes also dont fluctuate from month to month on a set salary!

[Snowkr]

Thanks!

It appears as if I am paying quite a bit more in income tax.

Do teachers get any of their tax dollars back in this country?

Also, what is this pension plan? I hear mixed things around my city about it like, certain foreigners from certain countries get a refund but others can't...

as an American, can I apply for pension refund? I couldn't find the info (sticky) here!

more help is always appreciated!

[Gord]

[schwa]

Maybe youre right Gord but shh! lets not wake the sleeping bear. Till now I have never heard of any foreign teacher being taxed on "free" benefits.

I assume employers file tax returns on our behalf but it never comes to our notice. In my home country (Canada) tax deductions are based on an estimate of our tax obligations which we straighten out personally at tax time. Wherever youre from, I'm sure you know the routine -- you get extra claims, credits, etc & crunch the numbers to end up with a refund or a balance due.

Some employers here evidently deduct high & pocket the return, because we're transient & dont know to ask. (Some deduct & dont pay in anything at all, but thats a different issue.)

One can, I assume, be proactive & insist on dealing with one's own tax return. Best luck -- tax forms in english-speaking countries are already like a foreign language, imagine in a 2nd language!

Major credits are, however, handed out here for medical expenses & receipted credit card use. If you think you might be high-end in either category, it might be worth roping in a Korean friend to assist.

My pay gets docked at 2% & I dont hear anything about it at year-end. Think I'll tiptoe round that bear.

[jacl]

Free housing isn't taxeable. Housing allowances, however, may be since it's money they give you.

I'm being taxed too much and have brought it up to the owner several times. I'm just going to hit him at tax time by bringing my pay sheets to the tax office. Why create a big fuss now over 40 or so thousand Won a month. It's like money in the bank.

[Grotto]

[ontheway]

Gord's numbers are basically correct and match the NTS. Grotto's numbers do not. The 30% deduction he took at the outset is for foreign workers. E2 Visa holders are generally residents under the tax law, and not eligible for this 30% credit. The withholding tables often quoted by Grotto are not accurate and do not reflect your ACTUAL tax liability. They are estimates only.

Be glad, however, that you are a resident under the tax law. Non residents are legally subject to a mandatory 20% withholding under the tax law for personal service income such as teaching.

Every person's tax liability will depend on his or her personal circumstances. The Korean income tax is Global for residents (most teachers). That means you pay Korean tax on all your earnings from every source worldwide, just like a Korean. Everyone here wants equal treatment with the locals. You got it here. Most teachers, of course, being "unemployable refugees from English speaking monkey land" (This is meant to be a funny aside not to be taken seriously. Some people here have million dollar investment portfolios at home.) have no other income.

The Korean tax rates range from 9% to 36% on your taxable income. There are substantial deductions for low income workers like E2 teachers.

Gord's calculation still shows a net income tax rate in the area of 2.3% for the year. Even that is an estimate. Your actual numbers would include your overtime income, deductions for you actual medical premiums paid, deductions for pension contributions paid, deductions for spouse, children and whatever applies to you. (And, of course, you have to pay tax on your dividends and capital gains from your million dollar investment portfolio, even if it's held off-shore.)

[Gord]

[chronicpride]

Wow! Tough thread for Grots. All that time wasted.

[ontheway]

Grotto posted on another thread that he actually got the 30% credit. A Korean accountant has confirmed that teachers may be eligible for this, even if they were here all year. I'm not sure if it applies to everyone on an E2, but it really lowers the year end income tax liability. Does anyone else have actual experience with this? Did you try it and get it? Did you try it and have your 30% tax credit denied?

[OiGirl]

[some waygug-in]

So what? What has US tax law got to do with Korea?

[Grotto]

The way I look at is is Korea is full of people who dont know their jobs, the laws or how things are supposed to be done.

Use it for your advantage if, when and where you can.

Dont let the naysayers on this board tell you "that this is the proper way things are done" as they often have no clue.

[OiGirl]

If I have to declare my "free" Korean housing on my US taxes, I just find it surprising that it is not declared on Korean taxes.