Taxation of income tax for foreign ESL teachers

It'll be helpful to someone teach English on E-2 visa
Also it must be useful to somebody going to be a ESL teacher in Korea
It explains how to pay tax
I scrapted it from the Korean National Tax Service blog :-)


Q: I am currently working as an ESL teacher in a language institute (hakwon) in Korea. My employer deducts 5% from my monthly salary for tax purposes. Is such taxation correct?


Taxation of income tax for foreign ESL teachers differs based on their employment status. Employment status is determined by the specific conditions of the contract between you and your employer, and it is broken into two types: employee and independent contractor (“free-lancer”).


1) If you are a resident, you are taxed as follows:


- If you are an independent contractor (free-lancer), the payer must withhold taxes every month at a rate of 3.3% (0.3% resident surtax included). In this case, you are responsible for filing global income tax return in the month of May of the following year, and any amount of tax withheld will be credited to you as prepaid tax. You may be able to claim a tax refund on your global tax return if the prepaid tax amount is greater than your final tax liabilities.


- If you are an employee, your employer must withhold the monthly income tax calculated by using the Simplified Tax Withholding Table. Your income tax liability for the year is settled and finalized in February of the following year through the year-end tax settlement completed by your employer.

2) If you are a non-resident, you are taxed as follows:




- If you are an employee, you are taxed following the same method applied to resident employees.



- If you provide lecture or teaching services without an employment agreement, the withholding rate shall be 22% (2% resident tax included).

- However, income from independent personal services and dependent personal services (wages and salaries) may not be taxable in Korea when it meets certain non-taxation requirements, such as the 183 day-term test provided under tax treaties.
※ Please refer to the Income Tax Calculation Chart for Resident ESL Teachers

Click the photo to see big size


- Article 122 of Personal Income Tax Law [Calculation of Tax Base and Tax Amount in Case of Global Taxation on Non-resident]
- Article 137 of Personal Income Tax Law [Year-end Tax Settlement of a Tax Amount on Wage and Salary