Tax and Labor Rights (4/4)
Overview on Taxes and Insurances
Income Tax Like any other country, taxes are generated if you have a source of income in Korea. Taxation may however differ depending on mutual government agreements. Taxation eligibility Country Public school Academies United States Exemption for 2 years Taxed Canada Taxed Taxed United Kingdom Exemption for 2 years Taxed Ireland Taxed Taxed Australia Exemption for 2 years Taxed New Zealand Exemption for 2 years Taxed South Africa Exemption for 2 years Taxed The 4 major insurances. National Health Insurance: In Korea, employers must provide health and medical insurance. Health and medical insurance may cover medical, dental, or accidental coverage or a combination of the three. If health and medical insurance are covered, the employer may pay for all of it or the employer may pay half. Be sure to ask the employer if the insurance covers international hospitals as well as local hospitals. This is a mandatory subscription. Employment Insurance: It is a national insurance system implemented for protecting workers’ rights and interests. National Pension Scheme: This insurance is created to prepare for the time one is not able to work. (pension after retirement). It is also determined by mutual government agreements. Several countries require employers to pay into a pension, or retirement plan. In most cases, the employer pays half and the teacher pays the other half. Depending on a teacher’s citizenship and the agreement with the teacher’s home country, the pension can be claimed at the completion of the 1-year contract. Industrial Accident Insurance: Compensates the employees for any occupational accident. This insurance option that provides both employees and their employers a certain level of financial protection in case of an injury incurred on the job. 4 major insurances Insurance Employee Employer National pension 4.5% 4.5% National Health insurance 3.545% 3.545% Employment insurance 0.9% 0.9% Industrial accident insurance N/A Matched by employer Eligibility on national pension Country Membership Subscription Refundable Payment United States Yes Lump-sum return/ can be added to US pension system. Canada Yes Lump-sum return/ can be added to the Canadian pension system United Kingdom Yes Lump-sum return (taxed) Ireland Yes Non-refundable/can be added to the Irish pension system Australia Yes Lump-sum return/ can be added to the Australian pension system New Zealand Yes Non-refundable South Africa No N/A Monthly Contribution = Monthly Average Wage X Contribution Rate (7.09%) You can pay online (113,050 KRW; only in Korean, but relatively painless). Pension The National Pension System is a state-run social security system to help citizens prepare for situations in which they can no longer earn a living due to old age, unexpected disabilities or even death. After the mandatory premiums are paid, pension is provided as a source of income when the individual reaches a certain age, acquires a disability, or in the event of his/her death (provided to the bereaved family in this case). In the case of employee, premiums are calculated based upon monthly income. An amount equivalent to 9% of the monthly base income is to be paid as the monthly premium while the employer and the subscriber each take responsibility for paying half (4.5%) of the total amount. Individually insured foreigners (self-employed, etc.) must pay 9% of their reported monthly income. An eligible foreigner is paid a Lump-sum Refund plus its interest, for the period corresponding to his/her insured period in the same way a Korean national receives Lump-sum Refund benefit. By Social Security Agreement (22 countries): Canada, USA, Germany, Hungary, France, Australia, Czech Republic, Ireland, Belgium, Poland, Slovakia, Bulgaria, Romania, Austria, Denmark, India, Spain, Turkey, Sweden, Brazil, Finland, Quebec How to claim your pension back when you leave Korea Claim before departure (receipt at Incheon Airport) Airport Payment Service Eligibility: A person eligible for a Lump-sum refund for the reason of returning to the home country and is scheduled to depart through Incheon Airport within a month How to apply: Visit the nearest branch office and apply for a lump-sum refund, at which point, a request should be made for the refund to be paid at the airport. A Lump-sum Refund is paid to foreigners when their departure from Korea has been confirmed. • Application by mail (After departing from Korea) - Required documents: application (The application needs to be notarized by a notary public and then apostilled or attested by the local Korean consulate.), passport (copy), bankbook (copy) How to monitor your taxes (National Tax Service websites): https://hometax.go.kr/websquare/websquare.html?w2xPath=/ui/pp/index_pp.xml&menuCd=index3 https://www.nts.go.kr/english/main.do https://www.jobkorea.co.kr/service/user/tool/incomepaycalc
