2025 Minimum Wage in Korea: Rate Increase & Allowances Included
    • Date2025/03/21 15:25
    • Read 8
    On July 12, 2024, the Minimum Wage Commission announced that the minimum wage for 2025 has been set at 10,030 KRW per hour.
     
    1. Monthly Calculation of 2025 Minimum Wage
    Based on the 2025 minimum wage and the most common work schedule of 40 hours per week (including paid weekly holidays, totaling 209 hours per month), the minimum monthly wage is 2,096,270 KRW.
    • Monthly Wage = 10,030 KRW × 209 hours = 2,096,270 KRW
     
    2. Monthly Wage by Standard Weekly Working Hours
    The monthly wage, including the paid weekly holiday allowance, varies according to the standard weekly working hours, as shown below:
    Weekly Working Hours
    2025 Minimum Wage Monthly Calculation
    40 hours
    2,096,270 KRW (10,030 KRW × 209 hours)
    30 hours
    1,574,710 KRW (10,030 KRW × 157 hours)
    20 hours
    1,053,150 KRW (10,030 KRW × 105 hours)
     
    3. Employment Contracts Below the Minimum Wage Are Invalid!
    Even if employees agree to receive a monthly wage lower than the minimum wage, this agreement is null and void due to violation of the Minimum Wage Act.
    Therefore, if the minimum wage is raised after the initial employment contract is signed, employers must pay the increased minimum wage according to the law, even if the contract is not rewritten.
    • Penalties for Violating the Minimum Wage Act:
      Employers who fail to comply with the minimum wage may face up to 3 years of imprisonment or a fine of up to 20 million KRW.
     
    4. What Is Included in the Minimum Wage?
    If the wage structure is simple, it is easy to check compliance with the minimum wage. However, if there are many wage components, it is necessary to confirm which items are included in the minimum wage calculation.
     
    Items Included in the Minimum Wage (O)
    • Meal allowances, housing allowances, transportation expenses, and other living or welfare-related payments
    • Bonuses, incentives, performance-based pay, seniority allowances, and attendance allowances paid monthly
    •  
    Items Excluded from the Minimum Wage (X)
    • Overtime, night, and holiday premium pay
    • Unused annual leave allowances
    • Paid holiday allowances
    • Wages paid in non-cash forms (e.g., goods or services)
    From 2024, bonuses, meal allowances, and other welfare-related payments are fully included in the minimum wage calculation. 
     
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