Deductions from Salary (Income Tax, Pension, Health Insurance)

From your salary you are ging to get the deductions of Income Tax, Pension, Health Insurance and others. Check out how much you are going to get deductions from your salary from this article.

1. Income Tax

Current rate is 3% to 5% of your salary depending on how much you make each month.

Public school teachers are exempt from paying income taxes during their first 2 years of employment. In order to request the Income Tax Exemption teachers must submit a ‘Residency Certificate’ that was issued by the appropriate government office from their country of citizenship. Canadians and Irish are not eligible for the income tax exemption.

To apply for Income Tax Exemption, you should visit a regional taxation office with the following documents;

A Certificate of Residency (issued by a regional taxation office in your country)

A copy of your Contract

An Application Form (available at regional taxation offices)

For more details, visit the National Tax Service (NTS).

and download 'Easy Guide for Foreigner’s Year-end Tax Settlement' located at Home > Resources > Publication

For USA Citizen's Proof of Residence, visit IRS and find  'Form 8802' and Instructions.

2. National Pension Scheme

Current rate is 9% (4.5% will be deducted from teachers salary and another 4.5% will be paid by employer).

Although Korean schools are required to pay into the Korean National Pension scheme, many employers fail to do so because there is no government office in place to monitor or enforce the rule. Schools that don't offer the pension plan tend to offer higher salaries to compensate for the difference. Additionally, just because a specific school doesn't pay into the scheme does not mean the school itself is not credible or financially stable.

Due to Social Security Treaty of America (effective, April 2001), Canada (effective, May 1999), American and Canadian citizens can get their pension upon returning home. You can ask for a refund from the National Pension Corporation. If you don't ask for such a refund, it will be added to your pension period.

For more details, visit the National Pension Corporation (NPC).

3. National Health Insurance

Current rate is 4.48% (2.24% will be deducted from teachers salary and another 2.24% will be paid by employer).

The insurance will cover most of basic medical and dental necessities and the medical coverage won’t start until you receive your Alien Registration Card, which usually takes 2-4 weeks after your arrival. It is advised that all teachers buy travel insurance with medical coverage for 30-45 days following arrival in Korea in case.

For more details, visit the National Health Insurance Corporation (NHIC).

4. Housing Deposit

Generally between 400,000KRW to 900,000KRW depending on schools policy (usually deducted from first three months salaries but may be negotiable). This deposit is to cover any unpaid monthly service, utility, telephone charges and etc. at the completion of contract and employer agrees that payment of remaining amounts of the deposit will be made to employee at the end of contract period after all outstanding monthly service, utility, and telephone charges have been paid.

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