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Spongebob Squarepants
Joined: 19 Oct 2007
Location: You wanna see my caring face?, ROK
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 Posted: Wed Oct 31, 2007 11:44 pm Post subject: Put off by housing allowance tax |
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Let me start out by saying that I realize that my housing allowance (the amount will remain unspecified) is generous by all accounts, and we all know that the Korean employees at schools we work at don't receive anything like it (or provided housing for E-2ers), but it isn't classified as income per se and should therefore be exempt from tax.
During contract negotiations with Mr. director, It was made quite clear that a housing allowance was not income (as in salary/taxable income), that only my salary would be taxed, and that anything else above that was tax exempt. Alas, I recently found out that it is - like any other sum of money I receive from the school - subject to tax, and what is more, the gross sum of salary + housing allowance is the amount from which my tax and health insurance are calculated (according to the school accountant). Needless to say this puts me in a much higher tax bracket than I would normally be in.
Has anyone had a similar experience? It was my assumption that housing was a benefit, and as such would not be taxed every month. I know we're not talking about a lot of money but it's the principle. |
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yingwenlaoshi
Joined: 12 Feb 2007
Location: ... location, location!
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| Posted: Thu Nov 01, 2007 12:02 am Post subject: Re: Put off by housing allowance tax |
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| Spongebob Squarepants wrote: |
Let me start out by saying that I realize that my housing allowance (the amount will remain unspecified) is generous by all accounts, and we all know that the Korean employees at schools we work at don't receive anything like it (or provided housing for E-2ers), but it isn't classified as income per se and should therefore be exempt from tax.
During contract negotiations with Mr. director, It was made quite clear that a housing allowance was not income (as in salary/taxable income), that only my salary would be taxed, and that anything else above that was tax exempt. Alas, I recently found out that it is - like any other sum of money I receive from the school - subject to tax, and what is more, the gross sum of salary + housing allowance is the amount from which my tax and health insurance are calculated (according to the school accountant). Needless to say this puts me in a much higher tax bracket than I would normally be in.
Has anyone had a similar experience? It was my assumption that housing was a benefit, and as such would not be taxed every month. I know we're not talking about a lot of money but it's the principle. |
Well it does count as income, so it should be taxed accordingly along with your other deductions such as pension and medical. BUT I remember something about housing allowances only being taxed on amounts above 300,000 Won or something. Hmm. Or something like 1/6 of your housing allowance being taxable on amounts no more than 300,000. Amounts above that would be 100% taxable income.
Maybe you could find that somewhere. Happy hunting! |
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ttompatz
Joined: 05 Sep 2005
Location: Kwangju, South Korea
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| Posted: Thu Nov 01, 2007 1:48 am Post subject: Re: Put off by housing allowance tax |
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| Spongebob Squarepants wrote: |
Let me start out by saying that I realize that my housing allowance (the amount will remain unspecified) is generous by all accounts, and we all know that the Korean employees at schools we work at don't receive anything like it (or provided housing for E-2ers), but it isn't classified as income per se and should therefore be exempt from tax.
During contract negotiations with Mr. director, It was made quite clear that a housing allowance was not income (as in salary/taxable income), that only my salary would be taxed, and that anything else above that was tax exempt. Alas, I recently found out that it is - like any other sum of money I receive from the school - subject to tax, and what is more, the gross sum of salary + housing allowance is the amount from which my tax and health insurance are calculated (according to the school accountant). Needless to say this puts me in a much higher tax bracket than I would normally be in.
Has anyone had a similar experience? It was my assumption that housing was a benefit, and as such would not be taxed every month. I know we're not talking about a lot of money but it's the principle. |
Housing is NOT a taxable benefit under current tax laws but any MONEY you get IS TAXABLE and that includes your housing allowance.
You are in the higher bracket and the loss is yours to bear. I hope that next year you can negotiate a high enough increase to cover your tax losses.
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yingwenlaoshi
Joined: 12 Feb 2007
Location: ... location, location!
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| Posted: Thu Nov 01, 2007 1:59 am Post subject: Re: Put off by housing allowance tax |
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| ttompatz wrote: |
| Spongebob Squarepants wrote: |
Let me start out by saying that I realize that my housing allowance (the amount will remain unspecified) is generous by all accounts, and we all know that the Korean employees at schools we work at don't receive anything like it (or provided housing for E-2ers), but it isn't classified as income per se and should therefore be exempt from tax.
During contract negotiations with Mr. director, It was made quite clear that a housing allowance was not income (as in salary/taxable income), that only my salary would be taxed, and that anything else above that was tax exempt. Alas, I recently found out that it is - like any other sum of money I receive from the school - subject to tax, and what is more, the gross sum of salary + housing allowance is the amount from which my tax and health insurance are calculated (according to the school accountant). Needless to say this puts me in a much higher tax bracket than I would normally be in.
Has anyone had a similar experience? It was my assumption that housing was a benefit, and as such would not be taxed every month. I know we're not talking about a lot of money but it's the principle. |
Housing is NOT a taxable benefit under current tax laws but any MONEY you get IS TAXABLE and that includes your housing allowance.
You are in the higher bracket and the loss is yours to bear. I hope that next year you can negotiate a high enough increase to cover your tax losses.
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But...
It's a taxable benefit. I think the taxing procedure is different. I think. I don't think it's a definite "It counts as your total income" thing. I remember reading that somewhere. I think it's seperate.
I think, I think... |
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