Korean Job Discussion Forums

[Mikazo]

Hi all. This is a rather complicated question so please bear with me.

I'm an American citizen. I have relatively recently started work at a hagwon. I am aware of a US-Korean tax treaty which negates any taxes US expat citizens pay for the first two years. Now, my director has told me that according to law you can no longer get just the insurance or pension, you have to get both if you enroll. Everyone is recommending to get the pension if I can, however the cost of the medical may significantly offset any benefits to the pension. I have my own overseas insurance and don't really need the medical. I don't believe the director is going to cheat me out of this, but she wants me to think about it as she isn't sure if I can get the medical money back later. My question is, can I get the medical insurance money back at the end of my contract given that I'm a US citizen and that is essentially a Korean tax, or does it work differently? Furthermore if it turns out I have a choice, is it worth it to enroll in any of it if there is no tax exemption?

I know tax issues have been raised and re-raised here over and over, so forgive me if this question seems redundant. It also seems like most everyone I talk to who knows anything is from Canada and doesn't understand US-Korean tax treaties.

Thanks in advance for any info.

[ttompatz]

the 2 year tax exemption ONLY applies if you are working at a public school or publicly funded university.

You do NOT get the 2 year tax break if you work at a hagwan.

Taxes are in the range of 1.7-1.8% for "employees" and 3.3% if they labeled you as a subcontractor (illegal but often done).

Pension is 4.5% of your salary and is matched by your employer giving you a refund when you return home of 9% of your gross salary. It is required by law for all "employees".

NHIC medical insurance is 2.83% of your salary (again matched by your employer) and is required by law.

.

[ontheway]

You will have to pay your income taxes, you are not exempt.

You are legally required to enroll in both the National Health Insurance and the National Pension. Your share of the health ins is far less than your employer's share of the pension. Since the pension is refundable, you get all of it back when you leave, you will come out ahead by signing up. The health insurance in not refundable. Hopefully you'll never get sick or injured, but if you do, you'll be glad you're covered.

You should sign up for health and pension. You might get away with not doing it, but you'll have insurance and more money in the end.