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  • lshaugh
  • Adventurer

    • 37

    • December 18, 2013, 12:56:51 am
    • Canada
Sketchy taxation issue
« on: March 13, 2017, 01:14:30 pm »
So, I've been working at a hagwon since the beginning of January. I arrived without a working visa and only obtained one after a visa run to Japan in February. From then on, it took a couple of weeks for me to get an ARC card and then a bank account. As such, my hagwon was paying me in cash (under the table) and not reporting my salary to the government. Therefore, I was not paying income tax for the first couple of months I was here.

I received my pay on Friday for the February pay period. As this was the first legitimate pay period that they could report, they reported my cumulative salary for the three pay periods I have been here for the one month. They then taxed me on that gross pay (6.3 million KRW). This ended up being over 600,000 KRW in income tax alone (as there is a graduated income tax system in Korea - the more you make, the higher rate of tax you pay). Had I been taxed on my actual salary (2.35 million KRW), this income tax would have been only 54,000.

So to sum up, I am being taxed at a rate for a salary that I do not earn, in order for the hagwon to cover their asses for paying me under the table for 2 months. Basically, I have been taxed  roughly 450,000 KRW more than I should have been.

I have brought this up with my director and she just follows the company line and says that it's the only way they could make everything appear legal.

I'm basically taking a 450,000 KRW hit for my hagwon trying to cover their asses, right? What should I do?
« Last Edit: March 13, 2017, 01:19:07 pm by lshaugh »


  • OnNut81
  • Expert Waygook

    • 847

    • April 01, 2011, 03:01:41 pm
    • Anyang
Re: Sketchy taxation issue
« Reply #1 on: March 13, 2017, 01:24:33 pm »
What can you do?  If they're not willing to work it out with you on their own, there is no legal route you can take?  Well, at least none that wouldn't involve you being burned as well. Once you went along with that amount of time under the table it's too late.  Visa runs are usually done asap and it's definitely usually done before your first pay day.  How the hell did it go three pay periods?


  • Grimne_Lothos
  • Expert Waygook

    • 846

    • December 28, 2011, 12:56:27 pm
    • Buyeo, south korea
Re: Sketchy taxation issue
« Reply #2 on: March 13, 2017, 01:50:20 pm »
1.
you aren't being taxed at a higher rate....you are being withheld at a higher rate.   At the end of the year, when you file your taxes, the correct rate will be applied to you salary for the year and you may be eligible for a tax refund.   Are there some Western countries where the basics of how taxes work are not taught in high school?

2.
You are an illegal worker and visa violator.  He has more leverage over you than you have over him.


  • lshaugh
  • Adventurer

    • 37

    • December 18, 2013, 12:56:51 am
    • Canada
Re: Sketchy taxation issue
« Reply #3 on: March 13, 2017, 01:57:22 pm »
1.
you aren't being taxed at a higher rate....you are being withheld at a higher rate.   At the end of the year, when you file your taxes, the correct rate will be applied to you salary for the year and you may be eligible for a tax refund.   Are there some Western countries where the basics of how taxes work are not taught in high school?

2.
You are an illegal worker and visa violator.  He has more leverage over you than you have over him.

That is not the case, I will not be eligible for a tax refund at the end of the year according to my employer. Also, no need for a comment like this: "Are there some Western countries where the basics of how taxes work are not taught in high school?" I understand how taxation works, and this is not a legitimate way of taxation.  I am being taxed on a monthly salary I do not make in order for my school to get away with hiring me illegally essentially. S


  • kriztee
  • Expert Waygook

    • 764

    • December 18, 2015, 01:33:06 am
Re: Sketchy taxation issue
« Reply #4 on: March 13, 2017, 01:58:45 pm »
1.
you aren't being taxed at a higher rate....you are being withheld at a higher rate.   At the end of the year, when you file your taxes, the correct rate will be applied to you salary for the year and you may be eligible for a tax refund.

Yeah back in Canada it worked like that. At the end of the year when you actually do taxes it'll be tallied up for the year and you'll get the difference back. I used to ask my employer in Canada to take out a bit extra every paycheck so I'd most likely get money back rather than have to pay extra in the end. You'll get it back but you'll just have to wait.


  • Grimne_Lothos
  • Expert Waygook

    • 846

    • December 28, 2011, 12:56:27 pm
    • Buyeo, south korea
Re: Sketchy taxation issue
« Reply #5 on: March 13, 2017, 02:17:55 pm »
you aren't being taxed, you are being withheld (with the possible exception of various welfare taxes).  You can apply for a refund in Korea but understandably your employer won't want to bother with doing it for you.   You will want to hire someone to do your taxes.


  • donuts81
  • Hero of Waygookistan

    • 1364

    • October 20, 2010, 10:23:37 am
    • Korea
Re: Sketchy taxation issue
« Reply #6 on: March 13, 2017, 04:30:39 pm »
If it's your first (or second) year you may be tax exempt depending on your country.
"You can't hurt me now, Mr Lee. I've lost all feeling"