Banking, Money and Taxes in South Korea
The banking system in South Korea is as advanced as in most Western countries, but is also relatively simple and user-friendly. Most of the well known banks have service representatives who speak some English, and an increasing number of banks are offering Internet banking in English. Some of the better known banks in South Korea include Citibank, Korea Exchange Bank, Woori Bank, Kookmin Bank and Shinhan Bank.
To open a bank account in South Korea you will need a copy of your working visa, your alien registration card and your passport. Although your alien registration card has your address printed on it, it is also helpful to bring in a copy of your address written in both Korean and English.
Once you have filled in the necessary forms, the bank will issue you with a bank card. It is important to note that this is an ATM card, not a debit card. Should you require debit card facilities, or a card that works overseas, you will need to ask you bank for one specifically. The same applies for registering for Internet banking – it is simplest to ask the bank staff to assist in setting up your Internet banking on computers provided within the bank branch.
South Korea has an income tax rate of up to 35 percent of your monthly income. In addition to income tax, individuals are also charged a residents’ tax which amounts to 10 percent of the income tax amount. The tax system works on a sliding scale of between 10 and 35 percent as indicated by the following table:
Some expats are exempt from a portion of or all of their taxes for the first two years of their stay in South Korea. These include English teachers working in state schools, and qualified foreign engineers. Foreigners are also expected, to pay 4.5 percent of their salary into the National Pension Scheme. By law, employers must match this contribution. Expats can claim some of their taxes back at the end of each tax year and they can claim all of their pension payments back at the end of their stay in South Korea.
Some expats can opt to pay taxes either in their home country or in South Korea. This depends on your resident status and agreements between the South Korean government and that of your home country. For the most up to date information around the issue, it is best to check with the relevant tax office in your home country.
To open a bank account in South Korea you will need a copy of your working visa, your alien registration card and your passport. Although your alien registration card has your address printed on it, it is also helpful to bring in a copy of your address written in both Korean and English. Once you have filled in the necessary forms, the bank will issue you with a bank card. It is important to note that this is an ATM card, not a debit card. Should you require debit card facilities, or a card that works overseas, you will need to ask you bank for one specifically. The same applies for registering for Internet banking – it is simplest to ask the bank staff to assist in setting up your Internet banking on computers provided within the bank branch.
Taxes
South Korea has an income tax rate of up to 35 percent of your monthly income. In addition to income tax, individuals are also charged a residents’ tax which amounts to 10 percent of the income tax amount. The tax system works on a sliding scale of between 10 and 35 percent as indicated by the following table:
| Tax base (KRW) | Tax rates | |||
| Over | But not over | 2009 | 2010/11 | 2012+ |
| 0 | 12,000,000 | 6% | 6% | 6% |
| 12,000,001 | 46,000,000 | 16% | 15% | 15% |
| 46,000,001 | 88,000,000 | 25% | 24% | 24% |
| over 88,000,000 | 35% | 35% | 35% | |
Some expats are exempt from a portion of or all of their taxes for the first two years of their stay in South Korea. These include English teachers working in state schools, and qualified foreign engineers. Foreigners are also expected, to pay 4.5 percent of their salary into the National Pension Scheme. By law, employers must match this contribution. Expats can claim some of their taxes back at the end of each tax year and they can claim all of their pension payments back at the end of their stay in South Korea.
Some expats can opt to pay taxes either in their home country or in South Korea. This depends on your resident status and agreements between the South Korean government and that of your home country. For the most up to date information around the issue, it is best to check with the relevant tax office in your home country.
