Korean Job Discussion Forums

[joe_doufu]

My hagwon is deducting 5% from my pay as taxes, but a poster on my previous thread said no, it should only be 3%. Of what authority can I inquire to find the correct answer? I want to get some "evidence" to show my boss, but I don't want to "rat them out" and get them raided by the fuzz. I think if I can show them that I know the correct tax rate, we can avoid such unpleasantries.

[ulsanchris]

the tax rate in Ulsan is 3.3%
3% is for the federal government while the .3% is for the city government.
you can call your local tax office to find out. Most likely your boss isn't paying your taxes.

[waterbaby]

I had the same thing happen to me - only my boss was taking 7% while my contract just said based on the Korean tax rate. He spat it and refused but after a strike and more threatened walk outs I ended up with close to a million in back pay

Here's a link to the tax site - you should be able to find the rates in there somewhere - and it's from an authoritive source.

http://www.nts.go.kr/eng/default.html

[Gord]

In the event the incorrect tax is being deducted, a refund or an amount owing will result. Having the incorrect amount deducted only matters in cases where you feel that the school is not forwarding the deductions which is a separate issue.

[waterbaby]

[pegpig]

[JacktheCat]

Getting a printout of your tax withholdings from the tax office is also real easy to get (from your local tax office, locations on that website waterbaby threw up) and is very good leverage to use against your hackwon boss.

When I left my last, very last, hackwon job, my wonjongnim was making noises about deducting this and that from my last month's pay check. I just produced the tax print out which showed she had never payed my taxes for that year despite taking them out of my paycheck. That shut her up real quick, and I got my final paycheck and release letter no problems.

When in Korea, do as the Koreans do.

[ontheway]

Thanks to Waterbaby!

I checked the website. It's actually a little complicated:

If you are a "resident" of Korea, marginal tax rates appear to range from 9 to 36 % of your net income after a myriad of exemptions and deductions. This applies to your Global income. So, any income you earn outside of Korea would also be taxable after a variety of exemptions and deductions.

For non-residents the tax rate is 20%. You must be in Korea one year or more to be a resident and your taxes are based on a calendar year. What are the deductions for non-residents, I'm not sure. It looks too time consuming for me for a "fun" visit. Since many teachers are here for part of a year, and certainly part of a calendar year, this could apply.

If you are a foreign worker with resident status, with a typical hagwon income, it appears from the automatic tax calculator on the website that your net tax rate might be only about 1% and you are exempt from filing a return if you don't owe any tax beyond the amount withheld by your employer. (Of course that would preclude any possible refund.) They have an example on the website of a university teacher earning 60 million won, with a family and other additional deductions, with a net tax rate over 10%, however.

Like everywhere else in the world, this isn't easy or simple. Has anyone actually filed a tax return in Korea or talked to a real tax accountant or tax lawyer? (Now I remember why I gave up being an accountant!)

[ontheway]

Here's another website for the tax question:

http://www.efl-law.com/tax.html

plus the first one:

http://www.nts.go.kr/eng/default.html

The efl law site seems to clear up the residency question for most teachers. They claim that if you are under a one year contract then you are a resident for tax purposes even if your one year straddles two calendar years. It still appears that you should file a return for each of the two years.

The global income problem would still apply. Your earnings outside Korea are taxable in Korea if you are a resident. If you are a non resident then you pay a higher rate on your Korean earnings only.

How many teachers really file a return? How many hagwons really pay in the tax? Do the owners and managers really know what the law is? Even some (at least one) Korean accountants here don't know. Is there anyone out there who has filed a return, brave enough to reveal some actual numbers from experience?

[bellum99]

My wife files for us every year. She always finds many deductions like (credit card bills, car insurance, healthcare, church donations, etc....)

I have always gotten money back..one year it was over a million won.