Taxes And Deductions

Income Tax
Income tax deductions are made in accordance with Korean law, and taken from foreign employees' monthly salary. This works out to be approximately 3.3%, depending on the rate of pay. Citizens of the United States of America, the United Kingdom, Ireland, Australia, New Zealand and South Africa may apply for Income Tax Exemption for their first 2 years in Korea. Canadian citizens are required to pay 2% of their salary as income tax, in accordance with Korean law.
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 website: http://www.nts.go.kr/eng/index.asp USA Citizen's Proof of Residence: http://www.irs.gov (form 8802 + instructions)
 
National Pension
Korea's National Pension serves the economic needs Korea's aging population. It is similar to Social Security, and involves a monthly tax payment. All workers in Korea pay 9% of their salary to Korea's National Pension, with employers covering 50% of this cost.

When leaving Korea, Canadian and American workers are entitled to receive both their and their employer's contributions to Korea's National Pension Scheme, due to an agreement between Korea and Canada and the USA. Visit the National Pension Service website for more details.
 
National Health Insurance
With national health insurance in Korea, 50% of premiums are paid by employers and 50% by employees. Approximately 2.24% of foreign workers' salary is deducted monthly for premiums, which contributes half of the required 4.48%. Employer pay the remaining 2.24%.During medical clinic and hospital visits, patients pay 30% of the cost of treatment, with the rest covered by the National Health Insurance Corporation.
 
Monthly Deductions
The following table shows the monthly salary deductions for workers in Korea. The exact figures for each deduction are subject to change.
1. Income Tax: approximately 3.3% of your salary.
2. National Pension: approximately 4.5% of your salary (you contribute half of the required 9%, and your employer the other 4.5%).
3. National Health Insurance: approximately 2.24% of your salary (you contribute half of the required 4.48%, and your employer the other 2.24%).

 
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