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What is the 9 % Korea pension tax?
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Author Message
Kai
Posted: Wed Sep 19, 2007 10:15 AM
Joined:
Mon Sep 24, 2007
I am really interested in the positions found on your job post.
http://www.spokenskills.com/index.cfm?type=5&content=jobdetails&jobID=2304

However, I would like to have some clarifications on the 9% pension tax.
Could you please explain what this means. Also, will the working visa be sponsored?

Thank you for your time,

Kai-Mae
Sebastian
Posted: Mon Sep 24, 2007 10:20 AM

Joined:
Sun May 13, 2007
Basically what it means is that if you are a national from the US or Canada you can receive a refund of the pension taxes you (deducted from your salary) and your employer have paid. Total 9%.

Below is an explanation:

The pension fund is a payment implemented by the government to protect the employee in case of a tragedy or retirement, which are the only cases the money is refunded to the employee. Companies are required to contribute an amount equal to 9% of employee salaries to the national pension fund. This fund is comprised of 4.5% borne by the employer, and another 4.5% payment borne by the employee, deducted from monthly pay. Employee contributions to the national pension program are not tax deductible. This national pension contribution is capped at a monthly salary of 3,600,000 won.
Thus, the maximum monthly pension contribution to be paid by an employee is 162,000 won.

Refund

Under the National Pension Act, a lump-sum refund may only be paid to non-Korean nationals if they are nationals of countries with social security systems that pay corresponding contribution refunds to Korean nationals or if provided for by an agreement. All foreigners are eligible for a lump sum refund of Premiums paid, if they are from countries that have 'totalization agreements' with Korea, and if the foreigner leaves Korea or meet other eligibility requirements. The United States and Canada have negotiated totalization agreements with Korea. The U.K. has negotiated a contribution only agreement.
This means that a foreigner from the U.K. who is employed in Korea may benefit from the elimination of dual coverage, but will not get a lump sum refund.

Hope this helps,

Sebastian
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