Korean Job Discussion Forums

AwesomeA · Joined: 21 Dec 2006 Location: Yeosu

The company that I am at registered me as an independent contractor with the Tax office. What advantage do they have?

I have a signed contract, therefore thought my taxes were being paid as an employee. Don't I have any say? I am not a business. My taxes should be far lower.

Did I misunderstand my contract where it say for herein "DGJJK YUUI" will be referred to as employee? What's going on here?

wylies99 · Joined: 13 May 2006 Location: I'm one cool cat!

They will refuse to pay your pension and health insurance.

Norith · Joined: 02 Nov 2007

You do not have a say. However, it is possible that you could get someone at the tax office to call your boss and tell him that you should be taxed monthly on the simplified withholding rate. Not sure if they'd respond the first time, but if you called a few times and talked with the right person, they may well do.

Also, just because you are being taxed at 3.3% doesn't mean that your boss won't pay pension or medical. I was being taxed at 3.3%, and I have my medical book. I haven't called the pension office to have them check my deposits yet, but I intend to. To get my boss to change my tax from 3.3%, all I had to do is ask and remind him that E-2's can't be independent contractors...

mtnhiker · Joined: 18 Jan 2008

Please see teh "yep your hogwan can get out of paying your pension" thread. This will help with a lot of your questions, since a lot of us are in the same position.

We need to have a mass meeting and just raid the tax/labour/pension offices. We are supposed to be protected, unfortunately, we have to be active about it.

Zaria32 · Joined: 04 Dec 2007

An E-2 visa holder is by definition an emeployee, not an independant contractor.

Some at labor or the tax office don't know this, but you have to insist. If they do NOT pay health and pension, go to the Labor Board. If that doesn't work (and many who work at regional Labor Board offices don't know what they're talking about) call th headquarters of the Labor Board. They have an English line, and you can get the number on here.

AwesomeA · Joined: 21 Dec 2006 Location: Yeosu

I am on an F2. The company gives me money for medical and pension because they said they didn't have a plan set up. Hmm... My big beef is being in a different tax bracket and the fact they never told me I would be working as a freelancer when I signed my contract. What benefit does a freelancer have under a contract anyways?

mtnhiker · Joined: 18 Jan 2008

from what i understand, for us there are none. by being a contractor you would be able to work different jobs. but if you're on an E2 then you're just paying higher taxes.

Question: if you are a contractor you are supposed to pay your own taxes correct? If taxes are being taken off paycheck is there any possibility that the school is paying them to the government ?

Flash Ipanema · Joined: 29 Sep 2006 Location: Seoul

On a somewhat related note, my school says I'm being paid the "business tax" and not the "income tax". They've paid me my share of both pension and medical, but I pay the bills myself. Now they're saying if they file my taxes I'll end up owing 700k instead of getting it refunded. Then they came back and said if I make more than 24 mil I can't get a refund.

What's the deal with this business/income tax? They're calling the tax office tomorrow but I keep hearing that they're not reliable or consistent with their answers.

mtnhiker · Joined: 18 Jan 2008

First, are you on hourly wages? I believe that if you are or are a worker that has flexibility with schedule and location of employment, then you can be registered as self-employed. If you are on a monthly salary adn working full time then you are not self employed.
If you are self-employed then you are taxed at a much higher rate. One thing though, to be self-employed you have to agree to it, ie. it should be in your contract adn you should have received a registration number.

If you're not self-employed then you should not be making the contributions and taxed at this rate adn there are steps you can take to have this problem fixed.

tob55 · Joined: 29 Apr 2007

AwesomeA,

You have a viable option to negotiate with. I am not telling you what to do, but use your F2 as a bargaining chip. You legally have the right to walk away and find other employment if they are going to try and jack you around. My current employer is trying to do the same with me by offering me a 6 month contract instead of a full year contract so they can get out of paying any benefits to me. It is causing me to re-think my plan on staying for another year, simply because they claim ignorance on something they know they are screwing me over with. If I walk as an F2-1 I don't have any fear of finding other suitable employment since several schools are currently asking me to come and work for them, offering more money than what I currently earn.

Flash Ipanema · Joined: 29 Sep 2006 Location: Seoul

tob55 · Joined: 29 Apr 2007

Flash Ipanema,

I read through your post a few times before it hit me as to what might be happening. It seems that your employer is not being altogether forthright and paying taxes their self. They are having you make your own payments so they do not have to report revenue sources going through their obviously illegal operation. I might be wrong, but it certainly smells of someone who is doing what they can to stay under the radar of the authorities for some reason. They can still be listed as your visa holder, but they are probably claiming low wages as a school which they can do. In fact if they report less than let's say 12,000,000 KRW every 6 months, they have no tax obligation. If they have less than 48,000,000 KRW they pay only a fraction of the tax they would be responsible for over that amount. Depending on your situation, they are most likely hiding tons of money that is going to something else other than the local tax office. Just a hunch, but I would bet the bank on this as a strong possibility of what's going on.

Flash Ipanema · Joined: 29 Sep 2006 Location: Seoul

Well, I'm making my own payments for pension and health insurance, but the school deducts my taxes and supposedly pays them. Luckily I have a month before I leave to figure out what's up. And I'll be asking every day until I get a good answer.

tob55 · Joined: 29 Apr 2007

One caution, never assume that your employer is living by and following the same rule you or any other honest person would. Too many of the private hagwon owners have gotten themselves so far into debt they will never get out. Unfortunately, it is the foreign teachers who come here expecting honesty that get worked over. I wish the best for you, but don't count on getting everything worked out satisfactorily, especially if you only have a short time remaining on your contract.

mtnhiker · Joined: 18 Jan 2008

Flash Ipanema

Stop asking them and get down to the pension office ASAP. Bring your arc, pay stubs, contract and any other documents you might have. Going to the pension is the first step. The SCHOOL registers you as self-employed. Go to teh pension office in Jamsil, again refer to the "hagwon can get out of paying your pension" thread because there's a lot of info there.

If you are declared to be an employee there, then it will be easier for taxes, then go to the tax office and tell them what is going on. PLEASE do this. You are being taxed at a higher rate and are losing out on pension contributions.