WARNING: This post is going to include a lot of math, but DON’T BE SCARED! I know what you are thinking, “I am not a math person… HELP!”
The following are math people:
As you noticed, I am not in this group, nor is your former classmate who got A’s in every math class without breaking a sweat. The difference is that we are simply not afraid of numbers and neither should you. Release that fear! Okay done? Let’s continue.
Two questions that I’ve been asked a few times are:
How much money can you really make teaching in Korea?
How much of that can I realistically save?
And the answers:
It depends and… it depends. You didn’t expect a simple answer did you? That’s because it’s not a simple question. I may save 20k and another teacher could save nothing depending on our different lifestyles, salaries, spending habits, and guity (read: expensive) pleasures. This post will ONLY tackle Question #1 (Q2 coming soon)
First off, this is the wrong question altogether. What you should be asking is: How much would I need to make in the US to have the same lifestyle as the salary I might be offered in Korea? The reason for the question change is that you cant simply say “it’s cheaper.” Some things are cheaper and some things aren’t. The benefits also come into play, and you cant ignore the difference in tax rates (3.3% compared to 10% in the US). Assuming you have a job, you probably want to know whether or not it will be worth your while to move to Korea to teach English.
[I will round down to keep it conservative and simple.]
You will make between 2.0 million (rock bottom) and 3.5 million (absolute best) Korean Won. By the average exchange rate of the last 3 months (1,082 won/ USD but let’s call it 1,100), that is $1800-$3150. Before you salivate, most of the higher end ones are rare, are much longer hours, require special degrees, or require experience teaching (in Korea or in your country).
The average complete newbie with zero experience should expect about 2.2 million starting (with full benefits!)
I’ll be conservative and go with this, which was my salary my first year here.
– So, 2000 USD a month
The Korean tax rate is 3.3 percent up to around 2.8 million won a month. Your take home cash is $1930/month.
Every job is required to pay you “severance” after completing a contract. I would say 95% of jobs offer it with 5% being shady. Severance equates to 1 month pay at the end of your contract.
– Add $2000/12(months) = 160 per month (tax-free, plus interest)
Korean law requires that you be allowed to put 4.5% of your paycheck into the National Pension Service, which your boss is required to match. That is a 100% instant return, plus interest of about 3% a year (no-brainer, do it!). Some shady jobs will give you some elaborate reason why they can’t provide pension. Simply don’t work for them. The perk is too good to pass up.
– 4.5% of 2000 USD is 90 dollars (Tax-free plus interest. In addition, you are saving another 90/month in an account you can’t touch, which accumulates to about $1000 a year.)
Normally, you don’t have to pay for your flight to and from Korea. A round-trip ticket is provided. Very few jobs abroad provide airfare, but that is the beauty of supply and demand.
Normally, this is split 50-50 between you and the boss. This amounts to about 45 USD from your paycheck, but visits to the hospital cost about $4. As an American, I cannot stress the feeling of being able to go to any hospital for any health issue, without having to wonder if I can afford this. Even when I had health care in America, it was EXTREMELY expensive and required at least $50 for a visit. Health care would cover a whole family too, much like in the US, if you happen to come with dependants. I have felt the benefits of this first hand when I contracted pink eye two years ago. I went to the doctor about 4 times, got medicine another 3 times, and it cost me about $35 total for all of the visits and medicine combined. I don’t even want to think about what this would have cost me in the US
– Hard to put a price tag on this, but I would value this at around 100 USD / month savings given the plans available in the US, and the further cost of actual doctor visits. You are also allowed to visit any doctor or specialist and are not tied to a single physician for your convenience.
One of the biggest perks, accommodation is almost always provided by the job. This studio or one room apartment valued at around $500 a month.
– Add 500/month (but really, in LA, this would be impossible to have my own place).
– Broadband that is faster than anything you thought possible for $20/month (savings 40/month)
– Basic Cable TV $8/month (I don’t watch TV, so I won’t consider this, but you could save a lot)
– Banking is still free (and if you bank with Citi, wiring money Citi to Citi USA is also free!)
– Eating out Korean food is about 3-7 USD, tax included
– Korea is strictly a non-tipping country (personally, I save a ton with this)
– Cell phones start at 30 USD a month with UNLIMITED 3G data, or 2GB of 4G. I just got a prepaid plan here and was outraged by how terrible the options are! Another option is to ONLY get data at 10 USD/ month for 10GB of 4G service with a mobile wifi signal. Given how you could do pretty much everything with the right apps, this options deserves serious consideration.
Now for the hard math (don’t flinch).
I will adjust the salary to reflect the taxes you would have paid living in the US (you will be tax exempt in the US), then add all of the perks.
2000 x 12(months) x 1.2(+20%) = 28800 (I assumed a 23% tax rate)
(23%-3% Korean tax = 20% roughly)
100 x 12=1,200 (health) [not assuming you even go once]
500 x 12=6,000 (rent)
160 x 12=1,920 (severance)
90 x 12=1,080 (pension)
40 x 12=480 (internet)
40 x 12=480 (cell phone)
So you would need to make 40,000 a year in the US to compare with the rock bottom lowest of the low starting job as an English Teacher in Korea. But wait, there is more! Remember I said, “It depends?” One thing people never consider is their spending habits when calculating salaries, and this is another HUGE mistake.
Personally, I like to eat out, A LOT! Not only do I have little time to cook, but I am also a bit lazy, and am not exactly a chef. Eating out in Korea has saved me THOUSANDS of dollars. Meals can go for as cheap as $3 and as much as $8 for a Korean meal. Foreign food comes at a premium, but generally, I leave that for special occasions. Korean food happens to be fantastic and quite varied, so I am happy to eat it many times a week. I would estimate that an average person saves around ~ $3000 a year in eating out. (for me, around $6,000).
Another huge way I save is on transportation. Gas is about $8 a gallon in Seoul. However, few teachers own a car because there is very little need for one. In fact, I would say that unless you have kids, owning a car is a major luxury that is completely unnecessary. The subway costs 1 USD, cabs start at 3 USD, long range trains are efficient and cheap (cross country for $30), and motorcycles are extremely efficient. I owned a motorcycle in Seoul and saved another few THOUSAND in transportation alone. Mind you, I didn’t have a guzzler in the US. I drove a Kawasaki Ninja 250 which gave me about 55-60 mpg. You would probably save more than me. Average savings ~$1000 if you spend about $30/week on gas and only $10/week on public transportation.
Finally, going out. Drinking is very cheap in Korea (again, no tipping and assuming you st). You can have a fun night out at a club (some are free) with 20-40 dollars (with food). Parking alone in Downtown LA costs me 10-15 and I can spend 100 easy without even trying. That’s a savings of at least 60 USD every time I go out. Let’s say I go out every 3 weekends, thats about another grand a year.
All in all, I would say the average person would have to make 45,000 USD to have a similar lifestyle of a starting position in Korea being very conservative with my numbers. Realistically, I predict in the neighborhood of 50-60K. And I am not even considering the intangibles of paid time off, an incredible cultural experience, and the proximity to some of the most incredible places on earth.
After a year or two in Korea, you get raises, find better jobs, and while I won’t get into details, I did make closer to the high end of the range I provided above and saved 55,000 USD in three years (paid off 42k in debt, full post on that later). I would have to make around 80-90,000 to match that in the US. This is the reason so many people never leave. As for me though, like I said in my previous post, living below your means gives you the freedom from money and frankly, I can’t do the long hours forever.
I hope this cleared things up about how much you can make in Korea, roughly an equivalent of 45K-90K for a similar lifestyle in the Republic of Korea.
(Pt.2 will answer the second question so stay tuned)
Any questions? Leave them in the comments!