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After heavy taxes, most don't feel they are sufficient
By Yoon Ja-young
A 100 million won ($88,000) annual salary is what most salaried workers dream of. It's a huge sum compared to the average of Korean workers who earned 33.87 million won in 2016, according to data from the Korea Economic Research Institute. The median salary was 26.23 million won.
The number of those who earn 100 million won varies between 400,000 and 800,000, depending on the data. The institute estimates the figure at 430,000, or 2.8 percent of all Koreans who work in salaried positions. Annual salaries defined in the data include fixed income and overtime pay, plus incentives and bonuses. It is based on the labor ministry's analysis of 15.4 million workers.
Data from the National Tax Service, meanwhile, shows 596,000 workers earned over 100 million won in 2015. They make up 3.44 percent of the 17.33 million who filed tax returns. The tax agency started filing data on high-salaried workers in 2007. Back then, only 101,036 workers, or 0.76 percent of the total, earned over 100 million won. The number has grown nearly six-fold in the last eight years.
A recent analysis on income data from health insurance showed that there were 770,000 people who earned over 100 million won last year. They include professionals such as doctors and lawyers, and government officials and teachers, as well as business employees.
Except for professional jobs, the best way to attain a 100 million won salary is to work for a conglomerate. According to the Korea Exchange, the country's bourse operator, 13 of the companies listed on the main KOSPI stock market paid over 100 million won on average to their employees.
They include subsidiaries of top conglomerates such as Samsung Electronics and SK Telecom. Most financial holding companies also offer over 100 million won in annual salary, and oil refineries are also known for offering well-paying jobs.
Heavy taxes
Then what is life like when you earn 100 million won? Hong, one of the conglomerate workers, sees many such workers earning more than 100 million won a year, but they are far from being affluent.
"The key point is that the 100 million won is pre-tax. After deducting taxes, one just makes ends meet. There is no money left for savings."
According to Korea Taxpayers' Association, an NGO for taxpayers, a worker making 100 million won gets about 19 percent of his or her income deducted for taxes and social insurance payments. After paying 10.99 million won as earned income tax, 2.34 million won as national pension, 3.26 million won as health insurance, and 650,000 won as employment insurance, their real annual income falls to 80.6 million won. It means they get 6.71 million won each month in their bank account.
Kim, a housewife in Bundang, Gyeonggi Province, says it eventually depends on whether one has wealthy parents or not.
"Those who have affluent parents who helped them buy an apartment early on may have money to spare. However, not much is left if you have to pay mortgages and send your kids to hagwon," she said.
"I know it is not a small sum, but it doesn't feel like big money, either."
There may be an explanation for this paradox, where successful salaried workers don't think they are earning enough money. Korea Taxpayers' Association President Kim Sun-taek points out that Koreans have to pay for themselves for everything, including housing, retirement, children's education, and medical expenses, on top of subsidizing their parents.
In a report on Korea's middle class, the Hyundai Research Institute also pointed out that it's not income but the excessive burdens in spending that are the reasons why Koreans feel they are poorer than they actually are. It suggested that the government should seek ways to lessen their burden in housing and private education.
According to government data, households with over 7 million won monthly income spent on average 443,000 won per month on private education last year. Among these households in the highest income bracket, 81.9 percent had children who received private educations, while the ratio stood at only 30 percent among the lowest income bracket households. The data has been released since 2007, but it has been facing criticism each time that it doesn't reflect reality in which middle class households spend well above 1 million won a month on their children's education.
Even so, the 100 million won workers would not deny that they are a handful of the blessed. According to the tax agency, nearly half of the workers in Korea were exempt from taxes due to their low income. There were 1,904 salaried workers who made over 1 billion won last year, but they amount to only 0.01 percent of all the workers.
