Two Korean pay slips with the same salary can carry different tax depending on the non-taxable line. A 200,000 won monthly meal allowance is the best known, but article 12 of the Income Tax Act and its Decree also exempt a 200,000 won monthly car allowance, 200,000 won a month per child aged 6 or under for childcare, childbirth support in full, and up to 2.4 million won a year of overtime pay for production workers. We read the conditions attached to each as written.
1. Three items of 200,000 won a month. The meal allowance (where no meals are provided), the car allowance (using your own car for work instead of claiming actual travel costs) and the childcare allowance per child aged 6 or under.
2. Childbirth support is exempt in full. It covers payments from the employer within 2 years of the birth, up to twice (Act art. 12(3)(meo)1)).
3. Production workers’ overtime, night and holiday pay is exempt up to 2.4 million won a year. Only for production and similar workers with monthly fixed pay of 2.6 million won or less and total pay of 37 million won or less the year before (Decree art. 17).
At a glance — exempt allowances and conditions
| Item | Limit and conditions | Basis |
|---|---|---|
| Meal allowance | 200,000 won a month or less — only for workers not provided with meals such as a staff canteen | Act art. 12(3)(reo) |
| Car allowance | Up to 200,000 won a month — for a car the employee owns (or leases in their own name), driven by them for work, paid under the company’s rules instead of actual travel costs | Decree art. 12(3) |
| Childcare allowance | Up to 200,000 won a month per child aged 6 or under at the start of the tax year | Act art. 12(3)(meo)2) |
| Childbirth support | In full — within 2 years of birth, up to twice; excludes persons specially related to the employer | Act art. 12(3)(meo)1) |
| Production workers’ overtime | Up to 2.4 million won a year — monthly fixed pay 2.6 million won or less and prior-year total pay 37 million won or less (miners and daily workers: in full) | Act art. 12(3)(deo), Decree art. 17 |
| Unemployment, parental leave and maternity leave benefits | Everything paid under the Employment Insurance Act | Act art. 12(3)(ma) |
Meal allowance — “limited to those not provided with meals”
Act art. 12(3)(reo) Meals or other food provided to workers through a staff canteen or similar, or a meal allowance of 200,000 won a month or less received by a worker (limited to those not provided with meals or other food).
If you get both canteen meals in kind and a cash allowance, the bracketed condition reads the cash allowance out of this item. The meal allowance is also covered in our take-home pay calculator.
Car allowance — all three must fit
- The car — one the employee owns or leases in their own name.
- The driving — the employee drives it personally for the employer’s business.
- The payment — instead of actual travel costs for local trips, an amount under the company’s payment rules, up to 200,000 won a month.
So claiming actual travel costs for each trip and also drawing the allowance does not fit the wording (our reading). A car in a family member’s name is not one the employee “owns or leases in their own name” either.
Production workers’ overtime — two thresholds
Decree article 17(1) defines eligible workers as “workers (including daily workers) with monthly fixed pay of 2.6 million won or less and total pay in the preceding tax year of 37 million won or less”, narrowed to those set by ministerial ordinance among production workers in factories and mines, fishing crews, drivers and transport workers, care, beauty, cooking and food service workers, shop sales staff and elementary service workers, among others. Monthly fixed pay excludes irregular pay such as bonuses, reimbursements, welfare benefits and the extra pay earned for overtime, night and holiday work.
These thresholds have changed through amendments, so other figures still appear in older material. The Decree in force from 1 October 2026 says 2.6 million and 37 million won.
How much it adds up to — our example
| Example | Exempt per month | Over the year |
|---|---|---|
| Meals only | 200,000 won | 2.4 million won |
| Meals + car | 400,000 won | 4.8 million won |
| Meals + childcare (two children 6 or under) | 600,000 won | 7.2 million won |
The amounts and combinations are our example. Exempt amounts drop out of total pay, so the amount taxed falls by the same sum. Whether and how much is paid depends on your employer’s pay rules.
Checklist
- ☐ The non-taxable line on your pay slip — is the meal allowance there?
- ☐ Also eating in a staff canteen? Check the meal allowance condition
- ☐ Using your own car for work? See whether company rules set a car allowance
- ☐ Children aged 6 or under? 200,000 won a month each for childcare
- ☐ Childbirth support: within 2 years of birth, up to twice
Questions that remain
When is “aged 6 or under” measured?
“Aged 6 or under as at the start of the tax year (the day of turning 6 and before).” A child who was 6 or under on 1 January reads as qualifying for that whole year.
Is the National Pension lump-sum refund tax-free?
Article 12(3)(ba) exempts the National Pension refund (only when paid on death) and the death lump sum — see National Pension lump-sum refund.
Young and working at an SME? If you started by the end of 2026, income tax may be cut by 90% for 5 years, up to 2 million won a year (income tax reduction for SME employees).
Sources
- Income Tax Act [in force 1 Jul 2026] [Act No. 21221] — original text (checked 1 October 2026). Article 12(3) items ma (employment insurance benefits), ba (refund on death, death lump sum), reo (meals, 200,000 won), meo (childbirth within 2 years up to twice in full; 200,000 won a month per child 6 or under) and deo (production workers’ overtime).
- Enforcement Decree of the Income Tax Act [in force 1 Oct 2026] [Presidential Decree No. 36737] — original text. Article 12(3) (car allowance, 200,000 won a month) and article 17 (2.6 million, 37 million and 2.4 million won).
- Our own working. 2.4, 4.8 and 7.2 million won are our examples.
Where to check further
- Take-home pay — take-home pay calculator.
- Monthly withholding ratio — choosing 80% or 120% withholding.
Written on 1 October 2026. Articles are from the National Law Information Center; the tables and examples are ours.
