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Minimum wage system is a system that protects low-wage workers by the state intervening in the wage determination process between labor and management to set a minimum wage level and legally forcing employers to pay wages at or above this level.
1. 2026 minimum wage key indicators
2026 minimum wage has increased 290 won (2.9%) from 2025 (10,030 won) and was decided through labor-management agreement for the first time in 17 years.
- Hourly rate: 10,320 won
- Daily rate (8 hours basis): 82,560 won
- Monthly conversion amount (40 hours/week, 209 hours/month basis): 2,156,880 won
※ Monthly conversion amount includes paid weekly holiday allowance (8 hours/week) according to the Labor Standards Act.
2. Main application principles
- Same application for all industries: There was discussion for differential application by some industries, but finally the same amount is applied to all workplaces without industry distinction.
- Regardless of employment type: Not only regular employees but also temporary workers, daily workers, part-time (part-time jobs), foreign workers and any worker under the Labor Standards Act are equally applied to everyone.
3. Inclusion range and practical checkpoints
- After 2024, according to the minimum wage law revision, most cash benefits are included in minimum wage calculation. When reviewing wage adequacy in the field, you must consider the following items.
- Meal and accommodation allowance (welfare benefits): Cash meal or transportation allowance paid regularly at least once a month is 100% fully included in minimum wage calculation.
- Regular bonus: Regular bonus paid monthly in installments is also 100% fully included in minimum wage calculation.
(Except for bi-monthly, quarterly, or annual payment methods)
- Very short-time workers (less than 15 hours/week): The minimum hourly rate is the same 10,320 won applied, but they are not included in the target for weekly holiday allowance, paid leave (annual leave), and retirement pay, so it is calculated by multiplying the hourly rate with actual working hours.
4. Legal considerations
If a labor contract is signed with a wage lower than the minimum wage amount, the agreement is legally invalid and must pay the minimum wage. If the sum of the basic salary and includable allowances of existing employees is less than 2,156,880 won per month, the labor contract must be re-written to adjust the wage and be careful not to be reported to the Ministry of Employment and Labor.