Korean Job Discussion Forums

[polonius]

I have been working for my hagwon for 4 years now, and will be staying on for a few more years. I walked into work today, and my school accountant informed me that I owe money for the past years as far as tax is concerned. I have every faith that the 3.3% was withdraw from my monthly salary was passed onto the Korean taxman. Now they are saying that I owe more than the 3.3% tax. When I asked a fellow Korean manager, he informed me that the 3.3% is just the withholding tax, and that every May, all workers are supposed to submit a tax form stating their income, and what else they owe.

So my question is, what are the tax rates, above and beyond the 3.3% tax. They say that normally foreign teachers only come here for a year, and therefore the taxman doesn't bother with them. However, as I am on year 4, and continuing on for at least 2 or 3 more years, I don't want to pi$$ off the taxman.

Here I was thinking that 3.3% tax was very decent, but now I hear that I may have to pay another 3%. Not that this is the end of the world, but to ask for 4 years in arrears is certainly going to cost me a bootload of cash.

I tried searching through the Korean Tax website, and although it is in English, it's still Greek to me. Has anyone who has been at an organization for numurous years encountered this? What was the outcome?

Cheers in advance to those that can help my plight.

And if anyone can help me save from paying oodles and zoodles of won, I will take you out for a night of beers.

[ttompatz]

[Grotto]

Toms got it right. Find out whether or not your boss has been paying those taxes (also you are paying twice as much as you should...its not 3.35 .....its 1.5%)

You may either have to pay your back taxes or confront your boss....although you most likely wont want to continue on after the confrontation

[corroonb]

Apparently no one knows about the mysterious tax sytem of the mysterious land of Korea .

Why do so many contracts have rates like 5% or 3.3% ? How many directors are committing tax fraud? I was in the frankly insane postion of asking a prospective employer if I could pay taxes after being told I didn't have to.

Some recruiters really need to learn a little bit about their country before bringing lots of foreigners in to be exploited or involved in criminal activity. Half the contracts I've been offered have been obviously illegal if half of what I read on here is true.

Thank goodness for the good folks at daves or we would all be screwed.

[poet13]

Employers DO konw what the tax rate should be. But, considering that the tax rates where WE come from are significantly higher, it seems like a steal/deal when they quote 3.3 or 5%. It's only later on that discover that we've been ripped off, and few people bother to make a stink about it.

I have a theory that's why some employers won't hire teachers in-country. Those teachers are too wise. Experience has nothing to do with it. When I get back to Korea, the second thing I'm going to do is go sort out the S. African lady my old boss hired and let her know what's what. It may be petty, but she burned me for almost 3 million won in a year...

[polonius]

Well, I received a letter from the taxman after his phone call. It would appear that the 3.3% is simply a witholding tax. And further taxes need to be paid. My school did indeed pay the 3.3% to the Tax bureau, but there are further taxes due. I have the statement in which is says that 900,000 won was paid in tax. They then determined that part of my salary was tax free (something like 53% of my salary) and then on the rest I owed 18%. So after having paid 900,000 I will have to pay an additional amount. I was also informed that I would soon be receiving another amount owing for the year of 2005.

I have also called the tax office and spoken to them, and they said that this is indeed correct. So just for those of you that have been around for awhile, you may be swimming up the same stream I am.

[Grotto]

[polonius]

The year in question I averaged around 2.8/month. I have read many an article from the tax bureau, http://www.nts.go.kr/eng/default.html and it appears that we are subject to the same rules as E2 workers as any Korean is. I really wish there were a loophole for me to find. But everywhere I turn I come up with the same response. I have called my regional tax office. My company has paid the 3.3% they said they did, and yet, I am still finding myself owing money. Is there anyone who has worked at 1 place for 3 years ish. As my wife, who has worked in Korea, for the same company, but different branches, and therefore, different business numbers, hasn't received this nasty letter. However, co-workers, who have worked at the branch for multiple years, find themselves in the same situation as me. I know that my company has paid the 3.3%withholding tax. I have documentation from the tax bureau regarding this. All that is in question is if they can tax me more.

[IwalkAlone]

I'm afraid your boss and the tax office are in the right.
Your salary is much higher than most here. 2.8M has a tax liability of around 1.65M over a year, and 900,000 has already been paid so you must now meet the difference.

[Grotto]

tax on 2.8 is about 4.1% so you probably do owe a bit more!