Saturday, May 23, 2009

Tax on Severance Pay for Teachers in South Korea

Here's the question:

Do you happen to know if taxes are supposed to be withheld from severance pay. For example, if my salary is 2.2M, should the severance be 2.2M or 2.2M minus taxes?

Thanks!

Nathan

All income earned is taxable and since your severance pay is part of your annual salary, it will be taxed as well. I know that job advertisements often make a point to seperate severance pay from the monthly salary by using words like "bonus" or "extra", but when it comes down to it, it's just part of your income and you must pay taxes on it. I'm sure there are some hagwon owners out there that try to skirt the tax law and pay under the table for one reason or the other, but in most places, you will be taxed.

On a side note, Nathan included his photoblog address in the email and I think it's worth mentioning. Check it out: Wandering, learning, sharing...

If anybody has any questions, just send me an email at asktheexpat@yahoo.com or leave a comment.

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