Korean Job Discussion Forums

[tchaplin81]

Hey guys,

My contract is for 6 months, Sept - Feb, and during this time I only have 3.5 months of full-time employment. To caculate how much pension I am to pay, they've calculated my total pay of these 3.5months, and divided it by 6 months. For the 3.5 months I receive pay they are deducting 2 months of pension on each pay day. So since my monthly pay is 3.6mil, they deduct 380,000 for pension, and they did this in Oct, Nov, and will do in Dec.

If you can understand this message, can you tell me if it's legal?

Regards

Todd

[ontheway]

If you are working for 3.5 months but being paid and insured for 6 months, then your employer will be obligated to make insurance and pension payments during 6 months. So, they should collect the money during the time you are working and paid, but report your pay and pension tax payments based on 6 months. That part makes sense.

However, the numbers you gave do not make sense.

If you make 3.6 million per month then you and your employer should EACH pay 162,000 per month for the pension tax.

Your share of 162,000 won x 3.5 months would be 567,000 won. That is the total that your employer should deduct from your pay during the 3.5 months you are working.

The employer should then pay in to the pension administration your share and his share: a total of 1,134,000 won. If the pay and time period numbers you gave are correct, then this is what your employer should pay to the National Pension Scheme. If the employer has to spread the payments evenly over 6 months to match your visa period, that is no problem.

The problem is, however, that you said you are paying 380,000 monthly toward the pension. That means you will pay 1,140,000 yourself towards the pension (assuming, as you indicated, that you will have this deduction taken 3 times, Oct, Nov, Dec).

Your employer appears to be paying nothing towards the pension and is actually pocketing 6,000 won.

Time for a little talk with the accounting department.

[tchaplin81]

Thanks for you help here.

I have some more correct figures.
During my 6 month contract, I will receive 4 payments.
1st = 3.36mil
2nd = 3.12mil
3rd = 3.5mil
4th (being the last in late december) = 3.04mil

Total 13,020,000Won. This is not including the money I earn from teaching at the Language Education Center. I guess they are going under radar for that and a business class, as they pay this separately and don't deduct anything from it. Ha not even tax get's deducted until our last pay day.

So my pension payments, spread over 6 months, should be what exactly?

Note that I am from NZ, and I do not receive this money back

Thanks again,

Todd

[ontheway]

The pension tax (and for you being from NZ it is really just a tax) is 4.5% for you and 4.5% for the employer. You should each pay equally. The actual pension withholding numbers are from a table based on brackets, so that someone's pension tax might not be exactly 4.5%. In your situation, it is best to use 4.5%.

The total earnings you have incicated for your time in Korea is 13,020,000. At 4.5% you should pay a total of 585,900 won pension tax on your earnings. Your employer should pay an equal amount. These things are not exact, if they are trying to use the tables, so I wouldn't quibble over a few thousand won, but it looks like you have already paid too much.

By the way. Do you have health insurance? What are they withholding for income tax? These are also factors in what you should be thinking about doing next.

One other thing. It is possible, though I haven't heard of this, that there are different rules that could apply to someone who's in Korea for such a short time.

All this confusion is why all taxes on income, for everyone, everywhere, should be abolished.

[Corky]

Yeah, nice pay cheque buddy. How many hours a week and what qualifications? Most importantly, do they need someone to replace you when you go home?

oops...just reread that. You're getting paid four times. That makes it pretty normal.

[Young FRANKenstein]