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.
Language barriers may make it harder for expats to set up their account or get their internet banking up and running. There are some banks, like KEB Hanna, that are more expat-friendly than others. However, it is best to ask a friend or employer to assist with setting up one's banking needs in South Korea.
Currency in South Korea
The official currency of South Korea is the Won, which is abbreviated to KRW or ₩. Foreign currency can be exchanged at banks, airports, and some hotels or tourist spots, and most major international currencies are accepted. Expats will have a more difficult time exchanging won for other currencies outside of South Korea.
Notes: 1,000 KRW, 5,000 KRW, 10, 000 KRW and 50,000 KRW
Coins: 10 KRW, 50 KRW, 100 KRW and 500 KRW
Banking in South Korea
Some of the better-known banks in South Korea include KEB Hanna, Woori Bank, Kookmin Bank (KB) and Shinhan Bank. International banks such as Citibank, HSBC and Bank of America also operate in the country.
Banking hours in South Korea are generally from 9am to 4pm during the week. Very few bank branches are open on weekends.
Opening a bank account
To open a bank account in South Korea expats will need a copy of their working visa, Alien Registration Card (ARC) and their passport. Although the ARC has the cardholder’s address printed on it, it's also helpful for applicants to bring in a copy of their address written in both Korean and English, for the bank to capture it properly.
Once the necessary forms have been filled in, the bank will issue the applicant a bank card. It's important to note that this is an ATM card, not a debit card. Should an expat require debit card facilities, or a card that works overseas, they will need to ask the bank for one specifically. Internet banking also isn't necessarily included. Expats should have banking staff set up all of their banking needs when their account is first created.
Credit cards and ATMs
ATMs are plentiful in cities and are mostly found in convenience stores, hotels, banks, post offices or train stations. Although some are available 24/7 and accept foreign cards, many are only online during the day between 8am or 9am and midnight, and only accept Korean bank cards.
Although Koreans themselves usually pay with debit or credit cards, international credit cards may only be readily accepted in larger hotels and stores - smaller stores and restaurants may have trouble processing a foreign credit card. ATMs affiliated with the main Korean banks usually accept foreign cards.
Taxes in South Korea
South Korea has an income tax rate of up to 42 percent of an individual’s income. In addition to income tax, individuals are also charged a residents’ tax which amounts to around 10 percent of the income tax amount.
Some expats receive partial or complete exemption from paying tax for a specified number of 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 a percentage of their salary into the National Pension Scheme. By law, employers must match this contribution. Some expats, depending on their nationality, 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 also opt to pay taxes either in their home country or in South Korea. This depends on their resident status and whether their country has a double taxation avoidance agreement with the South Korean government.
For the most up-to-date information around the issue, it is best to refer to a tax professional.