Korean Job Discussion Forums

[marina_ballerina]

When someone leaves my hagwon, they get severance included in their last paycheck, which puts them in a higher tax bracket, so a ton of tax is deducted. Is that how it's supposed to work? It seems wrong.

[Andyc24_uk]

Yes, if your severance all comes together with your final months' wages, then it'll bump your last paycheck up into a much higher tax bracket.

However - there's a simple, way around this. If, like many people, your payday is around the 10th of the month, then ask your employer to pay you with two separate monthly pay slips - one for the previous month (which has a regular wage on it) and one for the month in which you leave (which contains 10 days' pay for the time worked in that month, plus your severance pay).

This way, you get one payslip with tax at the regular rate, and one very slightly higher (as you'll appear to have earned about 1/3 more that month). It's a significant saving over taking it all as one lump sum... and it saves your employer money too as they are supposed to match your tax contribution, so if you explain it to them clearly there should be no reason why they won't agree to it.

It's 'creative accounting', but legal as you technically DID earn those sums in those calendar months...

[OculisOrbis]

Employers dont match your tax...They match your health and pension deductions --- which are fixed percentages and dont change.