Korean Job Discussion Forums

icnelly · Joined: 25 Jan 2006 Location: Bucheon

So all of the posts in this forum about variable tax rates and tax documents from the tax office, and the rest got me interested in my school's reason for taking 3.3 % from my paycheck. Another teacher and I went to the tax office and sat down with someone from the investigative department (of course we had a friend who spoke fluent korean). Now HE SAID: 3.3 % is correct for certain nationalities with E-2 visas.

I don't know if he just didn't want us there, or what, but it doesn't make sense because on the webpage http://www.nts.go.kr/eng/default.html it has the little computer thing that figures out how much you should be paying.

WHAT IS GOING ON?

I from America, I've been here 9 months, My boss is taking 3.3 % (66.00 a month) and I need some help because that jerk at the office was not at all helpful. What is the tax document (the one that is a formal tax reciept that your boss should give you) called?

Wrench · Joined: 07 Apr 2005

vox · Joined: 13 Feb 2005 Location: Jeollabukdo

actually the tax rate is 3.3% and if you are working on a contract for a year in Gyeonggi-do province then you are being taxed correctly. You must have done something wrong on the computer window on the nts site.

We went through this last year with 6 foreign teachers in Ilsan, (Canadians, Aussies, and NZers) 2 of which were in Korea for 3 years each. I've never heard of a 1.2 mill cap on taxable income and I've talked to a lot of other teachers about tax rates. Just trying to save you an unnecessary headache. If you do find out different please post otherwise I think you'll find 66,000KRW/mo on 2 million/mo is pretty standard.

Wrench · Joined: 07 Apr 2005

icnelly · Joined: 25 Jan 2006 Location: Bucheon

I called the hotline to ask some questions. They said that it depends on if you are a resident/non resident and what type of work you do and what that work is classified as.

The other teacher I went through all of this stuff with sat down with the director and asked for the tax document (the proper form for a monthly paystub): that piece of paper will have all of the correct information on it. I just have to wait to get it (of course).

denverdeath · Joined: 21 May 2005 Location: Boo-sahn

For Canada anyway, if you are out of the country for 183 days and have no significant primary ties to Canada and minimal secondary ones, you are legally a non-resident for tax purposes. Most people on an E-2 visa in Korea are a resident for the time they are here due to registration with immigration. If you started your contract in December of 2005, you may not be a resident of Korea for the 2005 tax year; however, you are for the 2006 tax year.

IwalkAlone · Joined: 30 Nov 2005 Location: Daegu

denverdeath · Joined: 21 May 2005 Location: Boo-sahn

I think what Wrench was getting at is that a lot of people are taxed too much. Should be 28,950won for 2mil plus about 3,000won for resident tax, not 66,000won. What's that? 1.45%?

jacl · Joined: 31 Oct 2005

Actually, what's calculated on NTS's website is the maximum. Your taxes are less if you pay into pension and/or medical. The actual tax for a resident (and that's what you are on an E-2 Wink

) is 9%. But that's on a very small amount after all dedcutions are made.

denverdeath · Joined: 21 May 2005 Location: Boo-sahn

jacl · Joined: 31 Oct 2005

IwalkAlone · Joined: 30 Nov 2005 Location: Daegu

9% bracket is what most teacher's incomes fall into.

Your entire income is not taxable however.

Don't confuse withholding tax of 1-5% with income tax. Income tax is based on your entire income once the tax year is completed.

jacl · Joined: 31 Oct 2005

denverdeath · Joined: 21 May 2005 Location: Boo-sahn

Okay. A person on another board said that their employer stated that they would be taxed 3% on 2mil. But, when you go to the NTS web-site, the number they give(28,950) for withholding tax is only 1.45%. Actually, what the hell is withholding tax...it's monthly income tax, isn't it? Also, where does the 3% come from that many people talk about? Is that supposed to be a combo of withholding tax, resident tax, worker's compensation, and social welfare...the last two are things this person's boss was trying to say were a necessity once they were registered with the pension program and I'm trying to determine if it's yet another scam or not. The OP here said that the tax man said that 3% is correct. If this worker's compensation(Disabled only Security Insurance?) and social welfare(Other Security Insurance?) can be found on the NTS web-site's quick form, then I'm happy. And, when you fill out the form, do you only sum up your monthly withholding amts, in this case 60,000x12(or whatever months you worked during the tax year), and fill in the amts deducted for pension and health only, or are you supposed to include sth else? By this, I mean sth else other than the additional health expenses, credit card garbage, and the like. I understand the forms and what you guys are posting, I just want to make sure that I understand how to fill out the form the right way, and also know what the true rate is supposed to be on 2mil. Basically, should this person be taxed 1.45% or 3%? If it is in fact 3%, what comprises the other 1.55%?

Actually the OP didn't mention their base salary, so I don't know what the 3.3% is based upon.

denverdeath · Joined: 21 May 2005 Location: Boo-sahn

For example, I just did this person's taxes based on 2mil with 28,950 in taxes monthly, 90,000 in pension monthly, and 44,800 in health monthly, and it tells me that s/he owes a grand total of 7,520won after a correction of 35,492 for resident/inhabitant tax. Therefore, I wonder why her boss tells her that she should be deducted 3% as this results in a fairly high overpayment(like in jacl's case) Again, it's fine as long as the taxes are being done.