Korean Job Discussion Forums

[Pablo]

Okay, this is weird. I started teaching at a hagwon mid-January. Have received two paydays. I only read last night that I should check the tax rate. The payslip says 3.3% both times (on a standard salary). Yeah, yeah. Contractor scam, right? Didn't sleep well last night.

BUT

1) This morning I telephoned the national health office. They confirm that I was registered by the school and am currently insured. I forgot to ask them if they have received the first payment.

2) Later this morning I went to the pension office. They confirm that I was registered for pension by the school and am currently in the system. I asked them if the first payment was made yet. They say it isn't due yet, confirming the first day of work.

3) My employer has not deducted anything for health or pension from the first paycheck after registration. He said in passing he didn't have time to check on how much is due yet.

4) To my knowledge my employer has acted in good faith and treated me well until now. He has gone out of his way on several occasions to accomodate me. Our current rapport is very good.

So, I'm wondering about these two questions:

1) Given that the school enrolled me in national health and pension, what might be the reason I have been taxed at 3.3% on the first two payslips? It's not a new school, and there have been at least several native speakers teaching here before me. The boss should know the correct tax rate, right? But this situation doesn't fit a classic "contractor scam" scenerio either, does it? (BTW the contract clearly says "employer" and "employee" multiple times.) I don't get it.

and

2) What is a good way to proceed now?

Thank you for any insight and advice.

Pablo

[hogwonguy1979]

call the tax office to make sure he's paying your income tax it sounds like hes scamming you there

regarding pension and nhic it takes a couple of months to get the payments set up, it will likely happen in your 3rd paycheck, they will take out 3 months pension and nhic. not unusual its happened to me at every univ job i've had here

[TheUrbanMyth]

[schwa]

The school does not tax you, the govt does. The school deducts & remits an estimate of what your income tax will be at the end of the taxation year (the calendar year in Korea). If the school over-deducts, you're due for a refund from the govt tax dept at tax time.

But most foreign teachers blindly leave all that in the hands of their boss. If you're not handling your own tax return (the majority of us) ask to see your official tax statement, which is issued around february. Keep the boss honest.

[ttompatz]

And make sure that you are enrolled as an employee and not as a contractor in the NHIC and NPS.

As an employee the employer pays 1/2 and you pay 1/2.
As a contractor you pay 100% of both.

You will find out when they start taking out the deductions.

It is entirely possible that they are innocent and trying to do things the right way and the 3.3% is what they think should be rather than actually checking with the NTS.

Again, after about 90 days in you can check with the NTS and see what they are doing and you should also be having your deductions made for NHIC and NPS and should know what rate you are paying at.

.

[Pablo]

Thanks, All.

Pablo

[ontheway]

[ontheway]

[ontheway]

As far as your pension and health insurance payments:

Your school cannot make payments until they are billed. Since you have been registered, your school will receive a bill in due course. Bills come monthly and cover the previous month as a single pay period.

Pension and Health Insurance are billed as a flat amount based upon your salary. They are not the exact percentages quoted on Dave's but are base on brackets. The midpoint of each Pension bracket is 9%, but the actual billed amount could be above or below. Health Insurance is similar. You and your boss should each pay half. So, yes, your school has to get the exact amount from each office, then they can deduct this amount.

Pension and Health Insurance are billed in whole month increments, so if your first month was a partial month you will either pay for an entire month or nothing. Otherwise you could be charged for 13 months even though you only worked 12. However, it's also possible for the last month to be zero if it's a partial month. Depends on the situation.

[CentralCali]

OP: You should also check with the pension office to see what salary your employer is declaring to them for you.

[I-am-me]

Look closely at your next paycheck. Registering you as an Independent Contractor is oldest hagwon scam. Aside from pocketing your 3.3% tax money.