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Taxed Housing Allowance & Base Salary Severance
« on: March 27, 2017, 02:02:59 pm »
Hi everyone.

I've changed from one public school to another public school recently and have just realised in my first pay stub that my new school is taxing my housing allowance unlike my old school.

I showed them pay stubs from my old school and they explained that my old school was in the wrong.

I asked that since I'm now being taxed, whether my severance at the end of my contract would therefore be the base salary plus the housing allowance. They told me it would just be my base salary and they aren't willing to provide any further explanation as to why.

Is there a legal requirement that if the housing allowance is taxed it should therefore be paid as severance or are they allowed to refuse?



  • Schellib39
  • Expert Waygook

    • 773

    • March 10, 2011, 03:08:04 pm
    • South Korea
Re: Taxed Housing Allowance & Base Salary Severance
« Reply #1 on: March 27, 2017, 02:53:19 pm »
I'm also in the same situation. Housing allowance is taxed as income, yet the housing allowance will not be included in my severance. I have been given both answers (yes, housing should be included in severance and no, it shouldn't be included). Will be interested to what others on here say.


Re: Taxed Housing Allowance & Base Salary Severance
« Reply #2 on: March 27, 2017, 03:17:29 pm »
Ulsan MOE sent an email last year stating that housing would be included in severance. So maybe each MOE can choose how to handle it???


Re: Taxed Housing Allowance & Base Salary Severance
« Reply #3 on: March 27, 2017, 03:33:46 pm »
I was told by my school that mine will be included but don't quote me on that. I've previously been told that it wouldn't.


  • Pecan
  • The Legend

    • 3769

    • December 27, 2010, 09:14:44 am
    • Seoul
Re: Taxed Housing Allowance & Base Salary Severance
« Reply #4 on: March 27, 2017, 03:38:58 pm »
Taxed and included in severance.

Ages ago, it would appear as two deposits, when it wasn't taxed.  Now that it is lumped and taxed, it is one deposit.


Re: Taxed Housing Allowance & Base Salary Severance
« Reply #5 on: March 27, 2017, 03:47:14 pm »
Housing allowance is taxed and your old school was mistaken. Technically, you could be "audited" for this or the tax office may ask for an adjustment if anyone realizes and bothers to care.

As for the severance, the housing allowance isn't included according to the labor board (you can call their hotline to confirm) but some schools may be confused due to how additional payments which are not considered part of the base pay may be labeled or considered as by the individual doing the accounting. As such, they may include it when making severance calculation when they shouldn't.

You can find some answers for others asking these questions at: https://www.moel.go.kr/english/sai/saiQna.jsp?mid=1
but it seems like the board is down right now. The hotline is also useful for clarification.


Re: Taxed Housing Allowance & Base Salary Severance
« Reply #6 on: March 28, 2017, 07:20:03 am »
Housing allowance is taxed and your old school was mistaken. Technically, you could be "audited" for this or the tax office may ask for an adjustment if anyone realizes and bothers to care.

As for the severance, the housing allowance isn't included according to the labor board (you can call their hotline to confirm) but some schools may be confused due to how additional payments which are not considered part of the base pay may be labeled or considered as by the individual doing the accounting. As such, they may include it when making severance calculation when they shouldn't.

You can find some answers for others asking these questions at: https://www.moel.go.kr/english/sai/saiQna.jsp?mid=1
but it seems like the board is down right now. The hotline is also useful for clarification.

Actually, the labor law contradicts that.

Article 2: Section 5 and 6

5. The term "wages" in this Act means wages, salaries and any other money and valuable goods an employer pays to a worker for his/her work, regardless of how such payments are termed.

6. The term "average wages" in this Act means the amount calculated by dividing the total of wages paid to the relevant worker during three calendar months prior to the date on which the event necessitating such calculation occurred by the total number of calendar days during those three calendar months...

It should also be noted that the Labor Board actually has nothing to do with this.
Article 34 (Retirement Benefit System)
With regard to the system of retirement benefits paid by employers to retiring workers, conditions prescribed by the Employee Retirement Benefits Security Act shall apply.

If you read the Employee Retirement Benefit Security Act
Article 2 Section 3

3: "Wages" refer to wages prescribed in Article 2 of the Labor Standard Act


Therefor, yes you are supposed to get severance based off of your standard pay plus housing. The problem is, do you have the time and the means to fight for it? 
« Last Edit: March 28, 2017, 07:32:05 am by Seoul cruiser »


  • snorske
  • Adventurer

    • 69

    • March 05, 2012, 01:49:36 pm
    • Busan
Re: Taxed Housing Allowance & Base Salary Severance
« Reply #7 on: April 05, 2017, 02:25:38 pm »
Can confirm housing is not included in severance pay.  Per the labor help line, a company must pay housing allowance to 100% of employees for it to be included in severance pay.  So if even 1 employee doesn't receive it, then nobody does.
« Last Edit: April 05, 2017, 02:35:09 pm by snorske »


  • Pecan
  • The Legend

    • 3769

    • December 27, 2010, 09:14:44 am
    • Seoul
Re: Taxed Housing Allowance & Base Salary Severance
« Reply #8 on: April 05, 2017, 03:16:08 pm »
Can confirm housing is not included in severance pay.  Per the labor help line, a company must pay housing allowance to 100% of employees for it to be included in severance pay.  So if even 1 employee doesn't receive it, then nobody does.
Sorry, but I wouldn't have the "labor help line" be the end of one's pursuit.


  • Pecan
  • The Legend

    • 3769

    • December 27, 2010, 09:14:44 am
    • Seoul
Re: Taxed Housing Allowance & Base Salary Severance
« Reply #9 on: April 05, 2017, 03:16:42 pm »
Can confirm housing is not included in severance pay.  Per the labor help line, a company must pay housing allowance to 100% of employees for it to be included in severance pay.  So if even 1 employee doesn't receive it, then nobody does.
Sorry, but I wouldn't have the "labor help line" be the end of one's pursuit.


  • snorske
  • Adventurer

    • 69

    • March 05, 2012, 01:49:36 pm
    • Busan
Re: Taxed Housing Allowance & Base Salary Severance
« Reply #10 on: April 05, 2017, 05:51:52 pm »
Its also been confirmed by the BMOE and most waygooks that actually look into it.  But good luck proving otherwise


  • Pecan
  • The Legend

    • 3769

    • December 27, 2010, 09:14:44 am
    • Seoul
Re: Taxed Housing Allowance & Base Salary Severance
« Reply #11 on: April 05, 2017, 06:06:19 pm »
Its also been confirmed by the BMOE and most waygooks that actually look into it.  But good luck proving otherwise
I'm not looking to prove anything to anyone here.

Simply telling it how it is.

The first time I cashed out, it was included.

I'm expecting for it to still be included when I cash out in the future.

Rules change, etc., but I won't be going quietly ;)

I don't have any concern for what the BMOE does (they aren't my employer), but where are you getting this "most waygooks" stat?


  • grey
  • Hero of Waygookistan

    • 1518

    • April 08, 2011, 04:47:11 am
    • USA
    more
Re: Taxed Housing Allowance & Base Salary Severance
« Reply #12 on: April 05, 2017, 06:24:44 pm »
I don't believe my housing is being taxed. Should I tell my school to tax it?

If it matters, my teaching time here is three years.
Ko fills half his luggage with instant noodles for his international business travels, a lesson he learned after assuming on his first trip that three packages would suffice for six days. “Man, was I wrong. Since then, I always make sure I pack enough.”
-AP


  • kobayashi
  • Expert Waygook

    • 987

    • August 18, 2016, 11:14:47 am
    • Nibiru
Re: Taxed Housing Allowance & Base Salary Severance
« Reply #13 on: April 06, 2017, 08:22:30 am »
if your housing allowance is paid together with your salary - ie as one payment - and taxed, then it's included in your severance.

if it's paid in a separate payment and not taxed, then it's not included in your severance.


Re: Taxed Housing Allowance & Base Salary Severance
« Reply #14 on: April 06, 2017, 10:26:08 am »
Can confirm housing is not included in severance pay.  Per the labor help line, a company must pay housing allowance to 100% of employees for it to be included in severance pay.  So if even 1 employee doesn't receive it, then nobody does.

The company is paying housing allowance to 100% of their employees. Every foreign teacher gets a housing allowance.



Re: Taxed Housing Allowance & Base Salary Severance
« Reply #15 on: April 06, 2017, 10:30:05 am »
Its also been confirmed by the BMOE and most waygooks that actually look into it.  But good luck proving otherwise

Well if the BMOE who would be responsible for paying it says we don't get it, then that's enough confirmation for me!  :rolleyes: :rolleyes:

I actually had my wife (Korea) call and they said "we don't know."


  • Pecan
  • The Legend

    • 3769

    • December 27, 2010, 09:14:44 am
    • Seoul
Re: Taxed Housing Allowance & Base Salary Severance
« Reply #16 on: April 06, 2017, 11:33:47 am »
A simple printout from your tax office will show what is actually being "reported" each month/annually as income, which is sometimes different from what is actually being deposited into one's account.

Word to the wise, you need to keep an eye on that, because some schools under-report, so they can save on certain payments (I had it happen ages ago, but didn't catch it in time to have it fixed).

Point, check it, fix it, and get your max. severance.


  • Tamryn5
  • Adventurer

    • 54

    • April 02, 2013, 09:11:12 pm
    • South Korea
Re: Taxed Housing Allowance & Base Salary Severance
« Reply #17 on: April 06, 2017, 01:02:56 pm »
This is a really interesting post as i always wondered about housing being included in severance or not :/

And can I just ask for clarification for public school teachers, severance is paid in one lump sum at the end of your contract based on your final salary, times the number of years you have worked? so if you receiving 2.5 million and worked for 3 years your severance is going to be 7.5million. Which is not taxed? This includes all countries - Australia, Canada, South Africa and so forth... ? No country has special exemptions?


  • rowdes
  • Veteran

    • 139

    • June 23, 2010, 02:37:28 pm
    • south korea
Re: Taxed Housing Allowance & Base Salary Severance
« Reply #18 on: April 06, 2017, 01:52:07 pm »
severance is taxed and is taxed a lot. I lost about 3m in tax on a 5 year severance payout.


  • grey
  • Hero of Waygookistan

    • 1518

    • April 08, 2011, 04:47:11 am
    • USA
    more
Re: Taxed Housing Allowance & Base Salary Severance
« Reply #19 on: April 06, 2017, 02:14:57 pm »
if your housing allowance is paid together with your salary - ie as one payment - and taxed, then it's included in your severance.

if it's paid in a separate payment and not taxed, then it's not included in your severance.

I'll recheck my numbers. My housing is included in a single deposit with my salary.
Ko fills half his luggage with instant noodles for his international business travels, a lesson he learned after assuming on his first trip that three packages would suffice for six days. “Man, was I wrong. Since then, I always make sure I pack enough.”
-AP