I have just been informed that the tax office has recently told all schools to include bonus payments, settlement allowances and airplane fees in their tax calculations from now on.
This means that as well as paying tax on our earnings (no problem with that of course) we will also be paying tax on money we dont earn. eg. the round trip airplane tickets that we are reimbursed for at the start and end of our contracts.
On tax forms in the US we are also asked to account for housing allowances, travel expenses, and other items, but in the case of airfare reimbursement for foreign teachers in South Korea it is of course teachers' own money being fronted at the beginning and end of contracts and isn't "earned" income. Poster eunny continues:
I just got notification from my school that they want to start taxing housing stipends, flight reimbursements, settlement allowances, and overtime pay. This is strange to me because I currently pay 5% of salary to the health insurance organization. I called the health insurance organization and they told me that this tax has always been in effect. There policy has always been that salary is inclusive of housing stipends, flight reimbursements, settlement allowances, and overtime pay. Supposedly, this had not been enforced for some time. They want to start enforcing it again. So, all those people that came before us were not taxed in this way. Another problem that I have is making retroactive payments.
. . .
According to my co-teacher, every foreign teacher in Gyeonggi province will be notified sooner or later. I have tried to talk to the gepik coordinator Dain Bae but she is honestly useless [...]
. . .
My chief complaint with this whole taxation law is that I have to make retroactive payments. I have told my school that I am willing abide by the new taxation law as long as I don't have to make any retroactive payments. However, my school isn't willing to negotiate. I want to dispute this matter through the proper channels but don't know where to go about doing this.
The issue of retroactive payments and other costly amendments was first discussed on the forums and this site in October 2009 regarding vacation time when schools started retroactively fining teachers who took time greater than contractually allowed. As poster Gillian wrote on Dave's ESL Cafe at the time from Naju:
This actually happened to me and the othe foreign teacher at my school. Our pay for the month of September was reduced by the amount of time we had spent "Out of Korea beyond our 2 weeks" for summer vacation AND they went back to last WINTER vacation and did the same! All of this was deducted in one lump sum from September's pay.
Apparently the school received the memo stating this change in enforcement policy, but my "Co-teacher" neglected to read the dang thing, so the other foreign teacher and I went our merry way none-the-wiser.