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  • JessS94
  • Explorer

    • 8

    • February 09, 2017, 04:02:38 am
Re: Tax Time question
« Reply #40 on: February 06, 2020, 10:57:00 am »
I don't think so -- I don't think it has anything to do with that. However, if you have a CD at a bank account in Korea with at least 30 million KRW or more in it, then the bank will tax it once the CD reaches its maturity date.

Sorry if this is stupid but what is a CD at a bank?
Hm, that's strange. My tax is double, sometimes more than double, of all my friends who are on the same salary, and the only difference is that I don't send money home. Everything I spent last year was on my card because I knew that was better than using cash for tax deductions, but I've come out with a much higher tax sum than my friends, even after deductions


Re: Tax Time question
« Reply #41 on: February 06, 2020, 11:17:14 am »
Does anybody know if you get taxed more for having more money saved in your general korean bank account? For example, if you haven't sent money home and you have been keeping it in korea - can they tax you more just because of that?

No - you're not taxed on your savings. Only your income.


  • Mezoti97
  • The Legend

    • 2702

    • April 14, 2011, 03:02:50 pm
    • South Korea
Re: Tax Time question
« Reply #42 on: February 06, 2020, 12:35:30 pm »
Sorry if this is stupid but what is a CD at a bank?
Hm, that's strange. My tax is double, sometimes more than double, of all my friends who are on the same salary, and the only difference is that I don't send money home. Everything I spent last year was on my card because I knew that was better than using cash for tax deductions, but I've come out with a much higher tax sum than my friends, even after deductions

CD = Certificate of Deposit (https://en.wikipedia.org/wiki/Certificate_of_deposit)
It's basically an investment savings account where you put a certain amount of money away for a certain time period and you receive a higher interest rate than you would in a normal/regular savings account. Generally, the more money you put in the CD and the longer the period you keep the money in the CD, the better the interest rate. In Korea, banks only charge tax on your CD account(s) if you have at least 30 million KRW or more total in it/them (so less than that, you don't get taxed on it).

Regarding your tax being higher than your friends who have the same salary, do you print out your tax deduction documents from the tax web site and submit them to get the tax deductions applied? I think if you don't submit those printouts, then the tax deductions won't get applied, even if you do use your debit card when you make purchases (that is my understanding of how it works, at least).


  • Datasapien
  • Super Waygook

    • 473

    • February 04, 2012, 09:36:25 pm
    • Chungcheongbuk-do
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Re: Tax Time question
« Reply #43 on: February 06, 2020, 12:38:02 pm »
Hm, that's strange. My tax is double, sometimes more than double, of all my friends who are on the same salary, and the only difference is that I don't send money home. Everything I spent last year was on my card because I knew that was better than using cash for tax deductions, but I've come out with a much higher tax sum than my friends, even after deductions

Maybe you haven't been paying as much tax each month as they have? I've heard (don't quote me on this) that school finance officers often estimate your tax for the year in advance and then take it out of your pay each month. They then compare their estimate with the real value and either give a refund if you paid too much over the year or deduct from your Feb pay if you haven't paid enough.
"A noble spirit embiggens the smallest man." - Jebediah Springfield.


  • JessS94
  • Explorer

    • 8

    • February 09, 2017, 04:02:38 am
Re: Tax Time question
« Reply #44 on: February 06, 2020, 01:39:22 pm »
Maybe you haven't been paying as much tax each month as they have? I've heard (don't quote me on this) that school finance officers often estimate your tax for the year in advance and then take it out of your pay each month. They then compare their estimate with the real value and either give a refund if you paid too much over the year or deduct from your Feb pay if you haven't paid enough.
That's what I originally thought, but I've actually been paying more than them every month (like 15,000 won and their school hasn't taken anything throughout the year). I'm really stumped.


  • JessS94
  • Explorer

    • 8

    • February 09, 2017, 04:02:38 am
Re: Tax Time question
« Reply #45 on: February 06, 2020, 01:43:06 pm »
CD = Certificate of Deposit (https://en.wikipedia.org/wiki/Certificate_of_deposit)
It's basically an investment savings account where you put a certain amount of money away for a certain time period and you receive a higher interest rate than you would in a normal/regular savings account. Generally, the more money you put in the CD and the longer the period you keep the money in the CD, the better the interest rate. In Korea, banks only charge tax on your CD account(s) if you have at least 30 million KRW or more total in it/them (so less than that, you don't get taxed on it).

Regarding your tax being higher than your friends who have the same salary, do you print out your tax deduction documents from the tax web site and submit them to get the tax deductions applied? I think if you don't submit those printouts, then the tax deductions won't get applied, even if you do use your debit card when you make purchases (that is my understanding of how it works, at least).

Ah ok, thanks, I don't have one of those accounts.
And yeah I went onto the home tax website and did the PDF file and then printed it and gave it to my admin office with another signed document. I asked my co-teacher if the deductions had been done and were included in the final amount that I was signing for, and she said yes...


Re: Tax Time question
« Reply #46 on: February 06, 2020, 01:44:15 pm »
That's what I originally thought, but I've actually been paying more than them every month (like 15,000 won and their school hasn't taken anything throughout the year). I'm really stumped.

Without wanting to sound prying and rude, how much are we talking here?  As in the amount you've paid?  Last year's payment for me was about 1.4 million and that was without paying anything each month. 


  • JessS94
  • Explorer

    • 8

    • February 09, 2017, 04:02:38 am
Re: Tax Time question
« Reply #47 on: February 06, 2020, 01:52:11 pm »
Without wanting to sound prying and rude, how much are we talking here?  As in the amount you've paid?  Last year's payment for me was about 1.4 million and that was without paying anything each month. 

600k which is double the amount of friends on the same salary. Do you know if banks consider transferring money internationally as 'spending'. Obviously if I was transferring home then i would have a much higher spending on my card and maybe lower tax?


Re: Tax Time question
« Reply #48 on: February 06, 2020, 02:07:33 pm »
600k which is double the amount of friends on the same salary. Do you know if banks consider transferring money internationally as 'spending'. Obviously if I was transferring home then i would have a much higher spending on my card and maybe lower tax?

If you were paying tax each month, and then you have to pay 600 000 won on top of that, that seems okay numbers-wise.  Your transferring money home is not included in your tax readjustment as it's not done on your 'card'.  It's done straight from your account.  This is why things like paying rent in Korea that comes out of your Korean account would have to be proven so it is tax deductible.  But as you're transferring out of the country, it's not in their interest to make it tax deductible.  It's a foreign payment and they want you to spend you money here.  Like Datasapien said, schools guessimate how much tax you get taken each month.  A three hundred thousand difference with your friends could be for a few reasons but comparing your Hometax PDF things would be one way to see if there is a glaring difference in medical, credit card use, check card use, pension payment, health payment, supplementary health insurance payments etc.


  • JessS94
  • Explorer

    • 8

    • February 09, 2017, 04:02:38 am
Re: Tax Time question
« Reply #49 on: February 06, 2020, 02:37:46 pm »
If you were paying tax each month, and then you have to pay 600 000 won on top of that, that seems okay numbers-wise.  Your transferring money home is not included in your tax readjustment as it's not done on your 'card'.  It's done straight from your account.  This is why things like paying rent in Korea that comes out of your Korean account would have to be proven so it is tax deductible.  But as you're transferring out of the country, it's not in their interest to make it tax deductible.  It's a foreign payment and they want you to spend you money here.  Like Datasapien said, schools guessimate how much tax you get taken each month.  A three hundred thousand difference with your friends could be for a few reasons but comparing your Hometax PDF things would be one way to see if there is a glaring difference in medical, credit card use, check card use, pension payment, health payment, supplementary health insurance payments etc.

I know the actual amount is fine, and people here pay way higher and I would be paying much much more back home, but I'm just confused about the big discrepancies between me and my friends. We all have the same job in public schools so our pension, health insurance etc payments are all the same, and our spending is similar, which is another reason it just doesn't add up why mine would be double theirs.  Thanks for your help though!


Re: Tax Time question
« Reply #50 on: February 06, 2020, 03:23:13 pm »
I agree with Ronnie Omelettes. I think the differences are most likely your deductions. If your friends have had any surgeries (maybe Lasik), medicine, cash receipts, etc they can deduct all of that from their taxes. So while your spending habits, salary, pension, etc. can all be the same, your individual deductions will vary. For example, women making under 30 million a year can get a extra tax deduction that others can't.


  • Mezoti97
  • The Legend

    • 2702

    • April 14, 2011, 03:02:50 pm
    • South Korea
Re: Tax Time question
« Reply #51 on: February 06, 2020, 03:41:24 pm »
For example, women making under 30 million a year can get a extra tax deduction that others can't.

Really? I wasn't aware of that before.


  • JessS94
  • Explorer

    • 8

    • February 09, 2017, 04:02:38 am
Re: Tax Time question
« Reply #52 on: February 07, 2020, 09:15:46 am »
I agree with Ronnie Omelettes. I think the differences are most likely your deductions. If your friends have had any surgeries (maybe Lasik), medicine, cash receipts, etc they can deduct all of that from their taxes. So while your spending habits, salary, pension, etc. can all be the same, your individual deductions will vary. For example, women making under 30 million a year can get a extra tax deduction that others can't.

We are both women making under 30 million, so that one is the same. I did find one thing different, something called 조세조약 which my friend has an amount next to but mine is blank. Google translate just said tax treaty, but not sure what that really means.


Re: Tax Time question
« Reply #53 on: February 07, 2020, 09:28:47 am »
We are both women making under 30 million, so that one is the same. I did find one thing different, something called 조세조약 which my friend has an amount next to but mine is blank. Google translate just said tax treaty, but not sure what that really means.

Depending what country you are from, then your country may have a tax treaty with Korea. This means that for a certain amount of time individuals are exempt from paying Korean Taxes. For Americans, we have a tax treaty with Korea that states that Americans are exempt from paying Korean taxes for the first two years of employment. However, in order to qualify for this tax exemption then you need to submit a Residency Certificate to your school from the American government that states that you are tax exempt. Your school will then file it with the Korean Tax Office, and you won't be required to pay taxes for two years of employment. It's important to note, that the two years of employment are your actual working term, not the actual year. So if you came in August 2018, then in September 2020 you would be required to start paying Korean taxes.

So if your friend filed a Residency Certificate with their school, then it explains why their taxes are much lower as they are only required to pay Korean taxes after two years of employment.


Re: Tax Time question
« Reply #54 on: February 07, 2020, 09:36:19 am »
Depending what country you are from, then your country may have a tax treaty with Korea. This means that for a certain amount of time individuals are exempt from paying Korean Taxes. For Americans, we have a tax treaty with Korea that states that Americans are exempt from paying Korean taxes for the first two years of employment.
Same applies to South Africans. I applied for my residency certificate before I left for Korea in 2016, but it failed to materialise (typical of the South African government, really). So I've been paying taxes for the last 4 years. I wonder if I'd be able to claim that money back at some point, assuming I can get my hands on the damned certificate? Can anyone comment?


  • JessS94
  • Explorer

    • 8

    • February 09, 2017, 04:02:38 am
Re: Tax Time question
« Reply #55 on: February 07, 2020, 09:53:23 am »
Depending what country you are from, then your country may have a tax treaty with Korea. This means that for a certain amount of time individuals are exempt from paying Korean Taxes. For Americans, we have a tax treaty with Korea that states that Americans are exempt from paying Korean taxes for the first two years of employment. However, in order to qualify for this tax exemption then you need to submit a Residency Certificate to your school from the American government that states that you are tax exempt. Your school will then file it with the Korean Tax Office, and you won't be required to pay taxes for two years of employment. It's important to note, that the two years of employment are your actual working term, not the actual year. So if you came in August 2018, then in September 2020 you would be required to start paying Korean taxes.

So if your friend filed a Residency Certificate with their school, then it explains why their taxes are much lower as they are only required to pay Korean taxes after two years of employment.

Yes, same situation for me. I'm British and exempt from taxes for the first 2 years. We both didn't pay and both handed the certificate to our schools.


  • oglop
  • The Legend

    • 2983

    • August 25, 2011, 07:24:54 pm
    • Seoul
Re: Tax Time question
« Reply #56 on: February 17, 2020, 03:59:33 pm »
i just got a random deposit in my bank from my school. the note just says my school name, but it's not my wages. could this be the tax adjustment? i hope so because it means i got a rebate and don't have to pay anything extra

no school until march so i can't ask the accountant until then. but i have no idea what else it could be. the rebate should come directly from your school, correct?


Re: Tax Time question
« Reply #57 on: February 18, 2020, 09:21:36 am »
So if you came in August 2018, then in September 2020 you would be required to start paying Korean taxes.

This was a question I had for my school who could not answer it. Just to confirm: the Residency Certificate covers 2 years from contract start to finish and does not follow tax years? For example, I arrived in February 2018 and am leaving February 2020. If it goes by contract start to finish, I won't have to pay taxes for January and February, correct? BUT if it went by tax year, I would. My school was very confused and the person who files our taxes is new. I just don't want to leave and owe money.


Re: Tax Time question
« Reply #58 on: February 18, 2020, 09:42:25 am »
This was a question I had for my school who could not answer it. Just to confirm: the Residency Certificate covers 2 years from contract start to finish and does not follow tax years? For example, I arrived in February 2018 and am leaving February 2020. If it goes by contract start to finish, I won't have to pay taxes for January and February, correct? BUT if it went by tax year, I would. My school was very confused and the person who files our taxes is new. I just don't want to leave and owe money.

Yes, it covers 2 years from contract start to finish, not tax years. When your school accountant does taxes, in the tax form they can enter your tax exemption dates which follows your work contract. My first year my school simply didn't file any taxes for me because I was tax exempt. After my second year, my school started to file taxes for me starting from my 3rd contract. On my income tax receipt, there is a section at the top that reports that I was tax exempt from January to August, so from September forward I had to pay taxes.

In the case of February contracts, I think the norm is for schools not to file taxes at all for the first two years, because the calendar tax year has already passed. So if you came in Feb 2018 and are leaving in Feb 2020, then you wouldn't owe taxes. However, if you continued to work then your school would need to start submitting your monthly taxes in March 2020. Then in Jan/February 2021 you would be responsible for taxes from March-December 2020. In your tax receipt you would find that you would be tax exempt for January and February of 2020.


Re: Tax Time question
« Reply #59 on: February 18, 2020, 09:59:40 am »
Yes, it covers 2 years from contract start to finish, not tax years. When your school accountant does taxes, in the tax form they can enter your tax exemption dates which follows your work contract. My first year my school simply didn't file any taxes for me because I was tax exempt. After my second year, my school started to file taxes for me starting from my 3rd contract. On my income tax receipt, there is a section at the top that reports that I was tax exempt from January to August, so from September forward I had to pay taxes.

In the case of February contracts, I think the norm is for schools not to file taxes at all for the first two years, because the calendar tax year has already passed. So if you came in Feb 2018 and are leaving in Feb 2020, then you wouldn't owe taxes. However, if you continued to work then your school would need to start submitting your monthly taxes in March 2020. Then in Jan/February 2021 you would be responsible for taxes from March-December 2020. In your tax receipt you would find that you would be tax exempt for January and February of 2020.

Thanks for the information. Are things like severance, housing deposit, and contract completion bonus normally taxed? Schools have a month (until March) to pay these, so I'm wondering if then they would be taxed.