₩500,000 in tax. Arrgh!

[Peekay1982]

Just had a phone call from one of my co-teachers telling me that I'll have ₩500,000 in income tax deducted from my next pay cheque. I pay tax every month, I said. Apparently "that's not income tax. This is income tax". I rang my EPIK advisor and she said "some schools take the minimum every month and then get you to pay the rest at the end of the tax year".

This is my fourth contract and in the past I remember having between ₩100,000 and ₩150,000 deducted at this time of year - never this much. It just seems ludicrous. I get paid the same amount every single month; they know exactly how much; why not just take the right amount at the time?

I'm lucky in that I don't have any debts as such, I just save every month, but it's extremely frustrating to take such a big hit.

[madison79]

Just had a phone call from one of my co-teachers telling me that I'll have ₩500,000 in income tax deducted from my next pay cheque. I pay tax every month, I said. Apparently "that's not income tax. This is income tax". I rang my EPIK advisor and she said "some schools take the minimum every month and then get you to pay the rest at the end of the tax year".

This is my fourth contract and in the past I remember having between ₩100,000 and ₩150,000 deducted at this time of year - never this much. It just seems ludicrous. I get paid the same amount every single month; they know exactly how much; why not just take the right amount at the time?

I'm lucky in that I don't have any debts as such, I just save every month, but it's extremely frustrating to take such a big hit.

This happened on Jeju Island last year.  I got hit for 1 million at the end of the year since someone made an error. 
On the bright side this means that you are having less money taken out monthly.  I doubt they are trying to mess you over.  All works out in the end but yeah it does suck for that 1 month.
GL

[sejongthefabulous]

They updated the tax laws this year: you now pay tax on whatever your rent subsidy is. It used to be only if you opted for the extra cash you payed tax on it. Now even the rent your school pays on your behalf is charged as personal income. This is probably why you are taxed more at the end of the year now.
edit: this is my school accountant's belief anyway and it is wrong, so looks like I will be getting money back.

[Jozigirl]

One of the other NETs at my school had 1,700,000 won deducted from his February salary last year as his "tax adjustment".  Another foreign (Chinese) teacher at my school only received 600,000won of her salary in that month too for the same reason.  I'm not expecting a salary at the end of February as a result....

[Peekay1982]

Yeah, I don't think they're trying to con me. I just thought it was typically terrible organisation. But paying tax on the rent subsidy?!? That must be where the extra deduction is coming from. Outrageous. Good to see they're hitting us public sector fat cats where it hurts.

₩1,700,000 in tax? Jesus. I suppose I'm lucky that they're not ringing me to say "there is a problem, you will not receive a salary this month, you must also pay us ₩350,000..."

[jimmyeatworldwar]

if it makes you feel better, the income tax here is much much lower than other comparable countries..

[gookway]

if it makes you feel better, the income tax here is much much lower than other comparable countries..

Definitely in the past, but not now.  Korea's taxes are changing and increasing every year along with living expenses.  Factor in the exchange rate and you're practically talking the same as any other 1st world country.  We want industralization and modernization, well you got it now.  You've also got the taxes too.  Can't have the cake and eat it too. 

[Peekay1982]

if it makes you feel better, the income tax here is much much lower than other comparable countries..

Yeah, I don't even want to think about the taxes back in the UK. Nearly a third of my wages were spirited away every month before they got anywhere near me...

[Amandada6262000]

Even after reading through the extensive threads on the tax system/what is expected, I am still completely confused and anxious about it. Not that I expected anyone to spell it out for me, but it was so unclear, before coming here, what kind of taxes we have to pay! The wording on everything is designed to trip up common people like me. I'm sorry that you got hit with this... it really sucks! I guess I should prepare for a boring month of March.... eesh

[Incredagogue]

Definitely worried about this too. My school admin is about one step up from crayons and post-it notes when it comes to record keeping.

[americaussie]

If you spend more than 25% of your income on "stuff" (i.e., utils are not included) then go get a year end bank statement from your bank (it's for spending on your card), and if you have your cash receipts, and get an adjustment in march if you will still be here.   If you have any high medical expenses for some reason, get  a statement for those too.  Contacts and glasses are part of medical expenses, but I don't know about dental.  I wish someone had told me this when I first got here.  I keep getting screwed with taxes every year.  I don't' know about the 25% rule, and we changed to spreading our expenses over both of our cards, which means that mine are not enough.  Grrrrrr. 

[Peekay1982]

My co-t was jabbering on about credit cards when she rang me this morning - what exactly counts as tax-deductible? The EPIK lady mentioned dependents (no - although I send my family in the UK a lot of money because some of them are struggling a bit) and medical fees (again, no). I bought this lovely Macbook I'm writing on, can that count? Probably not...

[Jozigirl]

My co-t was jabbering on about credit cards when she rang me this morning - what exactly counts as tax-deductible? The EPIK lady mentioned dependents (no - although I send my family in the UK a lot of money because some of them are struggling a bit) and medical fees (again, no). I bought this lovely Macbook I'm writing on, can that count? Probably not...

I was told that your medical expenses have to exceed 3 million won for the year.  I had high medical expenses but they didn't add up to the amount required so it's not tax deductible.  If you have dependents (IN Korea), like a spouse or children, then you get a tax deduction.  There is a tax card that you can register for (at the tax offices) that helps to add your cash purchases to the deduction.  Credit cards also help.  Basically, anything to which your ARC number is attached, with regard to money spent, counts towards the deduction.  Also, all the Lotte/Happypoint/E-mart point cards apparently count too.

[americaussie]

If you bought the computer in korea, then yes.  I bought mine to, but I still didn't spend all that much, I guess!

[Peekay1982]

If you bought the computer in korea, then yes.  I bought mine to, but I still didn't spend all that much, I guess!

I bought it in Korea (via bank transfer). Worth a try anyway!

[pwhite]

I heard last year taxes were going up on foreigners (rumors of 15%), but it's really not that bad.

Here's what I can deduce from my tax document I received today. Disclaimer: I am no expert.

As far as income goes, I have no idea if housing, bonus renewal, or severance is taxed.
I can see the first 11,010,000 won is not taxed. (poverty line?)

Here are then 5 categories of deductions used by my public school's accountant:

기본공제   The basic exemptions - 본인 - self, 배우자   - spouse,  and 부양가족 dependents
1,500,000 for self. No idea for spouse or dependents

추가공제   Additional deductions - 경로우대 Senior,  자녀양육비   Child Support, 장애인 Disabled, 출산   Childbirth, 입양자 Ipyangja, 부녀자   Women, 다자녀추가   Additional multilateral and women. I have no idea what the last 3 are.

특별공제   Special deductions - 보험료 Premium, 주택자금   Mortgage, 표준공제 Standard deduction, 의료비 Medical, 기부금   Donation, 교육비 Tuition

기타공제 Other deductions - 연금저축   Pension savings, 국민연금보험료 National Pension Insurance, 투자조합출자 Investment Fund, 장기주식형저축   Long-term Equity Savings

The majority of foreign English teachers will only qualify for the "self" deduction. From there, married couples, children, medical expenses, tuition for those attending university in Korea are likely to be common deductions.

My school deducted about half my taxes through the course of the year. Tomorrow they'll take out the rest (350,000). I fell in the 6% bracket - I have no idea what the percentages are for different income brackets. I was able to claim my tuition and saved at least 300,000 won. It's possible I would have fallen in a higher tax bracket.

For those of you thinking of trying to deduct everything, keep in mind that I spent 5,000,000 on my tuition. Spent 5m to save 300k. I've spoken to a lot of university professors who've lived here long term and even with some high medical expenses it never made sense for them to do the tax card accounting because they simply don't spend enough. I'd wager that for all 30-50,000 English teachers in Korea, that the tax card might be worth the effort for those already taking a lot of deductions (child support, health care), but they would be on a super tight budget... not the kind of lifestyle that would keep many here.

I'm happy that my school's accountant files this

[woman-king]

Sometimes, it does pay to be American. 

[tsudopnem]

Sometimes, it does pay to be American. 

That only works for 2 years.

[Jozigirl]

Sometimes, it does pay to be American. 

Several countries qualify for this exemption, which is only for your first two years in Korea anyway.

[sashgi]

Hope this is still of some use, but...if you're worried about the amount of your taxes, this website is full of the info you need, and they have a handy-dandy tax calculator built in here:

http://www.nts.go.kr/eng/help/help_53.asp?top_code=H001&sub_code=HS05&ssub_code=HSE3

You can choose between flat taxes (15%) or progressive tax rates; I recommend choosing whichever is cheaper.  Good luck!