Pearson & Partners Korea Blog

Korea’s minimum wage for 2027 is settled. From 1 January 2027 the legal floor is KRW 10,700 per hour, and every employer operating in Korea has one quarter left to make payroll match it.

For foreign-invested companies the work is rarely the headline number. It is the contracts, the allowance structure, and the downstream items that move when base pay moves. This post sets out the confirmed 2027 figures and the checklist worth running before December payroll closes.

The confirmed Korea minimum wage 2027 figures

The Minimum Wage Commission decided the rate at its plenary session on 14 July 2026, and the Ministry of Employment and Labor formally announced it on 5 August 2026: KRW 10,700 per hour, an increase of KRW 380 or 3.7 percent from the 2026 rate of KRW 10,320, with a published monthly equivalent of KRW 2,236,300 based on a 40-hour scheduled workweek and 209 hours per month.

Measure	2026	2027
Hourly	KRW 10,320	KRW 10,700
Daily (8 hours)	KRW 82,560	KRW 85,600
Monthly (209 hours)	KRW 2,156,880	KRW 2,236,300
Change	—	+3.7%

Three points decide whether your payroll is compliant.

The 209-hour figure is not a typo. A 40-hour week works out to roughly 174 hours a month. Korean law adds paid weekly holiday allowance (주휴수당) on top, which brings the statutory monthly divisor to 209. If your payroll system computes monthly minimum pay from 174 hours, it will show a compliant salary that is in fact below the floor.

There is one rate, for everyone. The minimum wage applies equally to all workplaces regardless of the type of business, and no separate minimum wage applies to workers paid on a contract-work basis. There is no foreign-worker rate, no startup rate, and no regional variation. Nationality and visa status are irrelevant to the calculation.

The rate applies from 1 January, not from the announcement. Through 31 December 2026 the applicable floor remains KRW 10,320. The change bites on the first payroll run of 2027, which for most companies means the January cycle processed in late January or early February.

What counts toward the minimum wage in 2027

This is where most compliance errors sit. Comparing base salary alone against KRW 2,236,300 gives the wrong answer in both directions.

Following the phased reform that completed in 2024, regularly paid bonuses and welfare allowances such as meal and transport allowances now count toward the minimum wage in full, provided they are paid monthly on a fixed, regular basis. A KRW 200,000 monthly meal allowance is part of the calculation.

What does not count: overtime and night-shift premiums, holiday work premiums, irregular or discretionary bonuses, and allowances tied to performance rather than paid as a fixed monthly item. A bonus paid quarterly or annually does not count toward any single month’s floor.

The practical test for each employee is to strip out premiums and irregular payments, keep fixed monthly cash items, divide by that employee’s contracted monthly hours including weekly holiday hours, and compare the result against KRW 10,700.

One narrow exception exists. Workers in their first three months under a contract of one year or longer may be paid at 90 percent of the minimum wage, though this does not apply to roles classified as simple labor. Most professional and office positions at foreign-invested companies fall outside the carve-out in practice, and it is worth confirming rather than assuming.

The items that move when base pay moves

The minimum wage increase rarely stops at the employees sitting on the floor. Four downstream effects are worth modelling before you set the 2027 budget.

• Severance accrual. Statutory severance is calculated on average wage over the final three months of employment. Raising base pay raises the severance liability for every affected employee, and the provision on your balance sheet should reflect it.
• Four major insurances. National Pension, National Health Insurance, Employment Insurance and Industrial Accident Compensation Insurance are all assessed on remuneration. Higher base pay raises the employer contribution alongside the employee’s.
• Overtime rates. Overtime is paid at 150 percent of the ordinary hourly wage. An increase in the base rate compounds through every overtime hour worked in the year.
• Wage compression. If a junior employee moves up to the new floor while the employee one grade above does not, the differential narrows and the internal wage table stops making sense. Companies that adjust only the affected employees in January frequently find themselves running a second, unbudgeted adjustment in March.

For the broader picture of how these obligations fit together across a Korean entity, our Korea payroll and employment compliance insights cover the surrounding requirements in more detail.

What to do before December payroll closes

October. Run a below-minimum list. Export every employee with their fixed monthly cash items and contracted hours, calculate the effective hourly rate under the 2027 rules, and flag anyone who lands under KRW 10,700. Include part-time staff, fixed-term contractors on employment contracts, and anyone hired mid-year on an older salary band.

November. Decide the adjustment approach and model the full cost including the four downstream items above. If the wage table needs restructuring rather than patching, this is the month to do it, because January is too late to negotiate.

December. Issue amended employment contracts. A contract specifying an hourly or monthly figure below the 2027 floor becomes unlawful on 1 January regardless of what you actually pay, so the paper needs to match. Update the payroll system’s rate table and confirm the 209-hour divisor is configured correctly before the first 2027 run.

The penalties are not nominal. Paying below the minimum wage carries imprisonment of up to three years or a fine of up to KRW 20 million under the Minimum Wage Act, and employers are separately required to post the applicable rate where employees can see it.

The Ministry of Employment and Labor publishes the official notice and supporting materials, and the announcement is summarised on Korea.net. For inbound investors, Invest KOREA maintains general guidance on Korean employment obligations alongside its investment resources.

If you are hiring in Korea without an entity

Companies testing the Korean market through an Employer of Record arrangement are not exempt from any of this. The EOR provider is the legal employer and carries the compliance obligation, but the cost passes through to you. Ask your provider now for the 2027 cost per head rather than discovering it on the January invoice, and confirm that allowance structures in your employment agreements have been reviewed against the new floor.

The same question applies in reverse to companies planning to convert from an EOR to their own entity during 2027. The wage table you inherit should be built on 2027 figures from the start rather than migrated from a 2026 structure and corrected afterwards.

---

Work with Pearson & Partners Korea

We support foreign companies across the full lifecycle of a Korean operation: company incorporation, Employer of Record and payroll, tax and accounting, visa advisory, and market entry strategy.

• Contact: pearsonkorea.com/contactus
• Phone: 02 6952 7579
• Office: 서울특별시 강남구 영동대로 511, WTC 트레이드타워 30층 (06164)

If the 2027 wage change is prompting a wider look at how your Korean entity is structured, our team can walk through the options as part of Korea company registration and incorporation.

Frequently asked questions

---

This article reflects the Ministry of Employment and Labor notice of 5 August 2026 and the Minimum Wage Act as in force at the date of publication. It is general information, not legal or tax advice. Confirm your position with a licensed Korean labor attorney or certified labor consultant before amending contracts.