How much money to take with for the first month?
Most people seem to get by with between W500,000 and W700,000 (R3,500 to R5,000) for the first month before they get their first pay check. At public schools you should also get a W300,000 settlement allowance to buy some basic goods. Most schools promise to refund your flight ticket within the first month, but I wouldn’t rely too much on this. My wife and I together took W1,000,000 for the first month, but we ended up not even using half of this, since we got a settlement allowance from our schools.
First the good news. You do not have to pay income tax on your overseas earnings in South Africa if you are out of the country for more than 180 days out of a year. Excellent! Just double check with SARS before you leave.
More good news. If you work at a public school or national university in Korea, you do not have to pay income tax for the first two years. This should be included in your contract. Even more excellent! I have heard that some people have had to provide “proof” that they are registered as tax payers in their home country. However, I personally haven’t had to do this.
The bad news. If you work at a hagwon, you will have to pay income tax. BUT, this is usually between 3.3% and 5%, so this is not a disaster (nothing like the 18% you pay in SA).
Everyone working in Korea has to make payments towards a pension fund, including foreign workers. The problem is that only some nationalities can claim this money back, and this does not include South Africans. BUT, there is some good news: South Africans are EXEMPT from making pension fund payments, owing to some obscure reciprocal agreement.
We are the only country that sends English teachers to Korea where this is the case. Sometimes it is very cool to be South African. However, because there are so few of us, most recruiters and school directors don’t know about it. But when they find out that because we don’t pay, they don’t have to match our payments, they will make plans to sort this out. We save them money. Very cool!
Sending cash home
Take a look at Luthien’s detailed comment below.
Using SA Credit Card/Accounts in Korea
You should be able to use SA credit cards in Korea to make purchases and draw cash. The cheapest that I’ve come across so far is Virgin Money, which only charges R8.75 for drawing cash at any ATM worldwide. Most other credit cards charge at least R20 for the same thing. Just keep an eye on any charges the foreign ATM might throw in and for exchange rate costs. And the best part is that any point-of-sale purchases (ie when you swipe the card at a shop) should be free!
How much can you save? Seriously?
Let’s not beat around the bush here. One of the main reasons people come to Korea is to save money, either to fund adventures in exotic countries, build a nice nest egg or, more often, to pay back debt. And with all the regulations and paper work needed to come to Korea, the potential to make decent money is probably the one reason a lot of people come here rather than China or Japan.
The truth is that the salary here for teachers is actually not that high compared to other careers. A newbie with no experience or qualifications will be earning less than a Korean teacher straight out of university. But, with all the perks (free housing, free flights, low tax, no pension fund payments) as well as low medical costs, and generally low living costs, you can save a substantial portion of your income. And most people work extra. I have been offered lots of opportunities to legally make extra money, and I’ve had to turn down most of these because I actually enjoy sleeping and having a social life. My EXTRA income every month, from afternoon classes and other lessons arranged at the school, is MORE than what I was able to get out after deductions from my full-time job back in Cape Town.
How much you save depends largely on where you teach and what your lifestyle is. People living and working in Seoul save less, because Seoul is expensive to live in, and it has a whole bunch of temptations for people with some extra cash. If you like to go drinking every other night, especially at trendy foreigner bars, you are going to see your salary go very quickly. Also, if you want to travel around (like I do), then you will be spending a substantial wad of cash on that. But I personally think it’s worthwhile.
On the other hand, if all you do is work and save money, there is no reason why you can’t send home up to R15,000 a month. But that’s pushing it a little far.
If you live a moderate lifestyle, and perhaps don’t live in Seoul, work some extra classes but still go out and travel a bit, it is not impossible to save over R10,000 a month. But I would rather bet on saving in the region of R8,000 to R10,000 a month, and really enjoying your time here.
Don’t start counting all your money like Scrooge McDuck yet. Remember, there is a lot of work and long hours that come with this salary, and often some mind-numbing bureaucracy. Be prepared for hard work, but there is a great reward at the end of it!