Overtime, night and holiday pay earned by workers in factories, driving, shop sales, care and similar jobs is tax-free in Korea up to a set amount. Item (deo) of Article 12(3) of the Income Tax Act leaves who and how much to the Presidential Decree, and Decree Article 17 sets two thresholds and a cap — for a worker (day workers included) whose monthly base pay is ₩2.6 million or less and whose total pay in the previous tax period was ₩37 million or less, overtime, night and holiday pay is exempt up to ₩2.4 million a year. Mine workers and day workers are exempt on the whole amount. Enter the month’s base pay, last year’s total pay, this month’s overtime pay and what has already been exempted this year, and the calculator splits this month’s overtime pay into the exempt and taxable parts.
1. Two thresholds — monthly base pay of ₩2.6 million or less and prior-year total pay of ₩37 million or less (day workers included), in a job listed in Decree Art. 17(1) (factory and mine production work, fishing-boat crew, driving and transport, service, sales and elementary work specified by ministerial rule).
2. A cap of ₩2.4 million a year — of the pay received on top of ordinary wages for overtime, night or holiday work under the Labor Standards Act, up to ₩2.4 million a year (Art. 17(2) item 1). For mine workers and day workers, the whole of that pay.
3. Our example — monthly base pay of ₩2.4 million, prior-year total pay of ₩30 million, ₩300,000 of overtime pay this month, and ₩2.2 million already exempted in earlier months: ₩200,000 is exempt this month and ₩100,000 is taxable.
Calculator
Results update as you type. Amounts in won. Monthly base pay excludes irregular pay such as bonuses, reimbursement-type pay, welfare-type pay, and the extra pay for overtime, night and holiday work (Art. 17(1)). Testing the ₩2.6 million threshold against that month’s base pay is our reading. Seafarers’ production allowances (Art. 17(2) item 2) are not calculated. If you had no employment income last year, we assume you enter 0 (our reading).
The law — as written
| Provision | What it says | Points to note (our reading) |
|---|---|---|
| Act Art. 12(3)(deo) | Pay received for overtime, night or holiday work prescribed by Presidential Decree by workers in production and related jobs prescribed by Presidential Decree with regard to pay level, job type and so on | Both who and how much are left to the Decree |
| Decree Art. 17(1), main text | A worker (including day workers) whose monthly base pay is ₩2,600,000 or less and whose total salary under Act Art. 20(2) for the previous tax period is ₩37,000,000 or less, and who falls under any of the following items | Both thresholds and the job must all fit |
| Decree Art. 17(1), second sentence | Monthly base pay is the total of salary, wages, allowances and similar pay received monthly by grade (excluding irregular pay such as bonuses, reimbursement-type pay under Art. 12 and welfare-type pay under Art. 17-4), less pay received on top of ordinary wages for overtime, night or holiday work and production allowances under the Seafarers Act | Reimbursement-type items such as the meal and car allowances come out of base pay |
| Decree Art. 17(1) items 1–3 | 1. People working in a factory or mine who are production and related workers under the Korean Standard Classification of Occupations, as specified by ministerial rule / 2. People employed by someone engaged in fishing, as specified by ministerial rule / 3. Driving and transport workers; care, beauty, leisure and tourism, accommodation, cooking and food service workers; shop sales; goods rental; telecom sales; and elementary workers in transport, cleaning, security, housekeeping, food, sales and similar, as specified by ministerial rule | Rule Art. 9(1) points to “the jobs listed in Schedule 2” |
| Decree Art. 17(2) item 1 | Of the pay received on top of ordinary wages for overtime, night or holiday work under the Labor Standards Act, up to ₩2,400,000 a year (for mine workers and day workers, the whole of that pay) | ₩2.4 million is a yearly total — the calculator takes the earlier months’ total and works out what is left |
| Decree Art. 17(2) item 2 | Of production allowances received under the Seafarers Act by workers in paragraph (1) item 2 (for rate-based pay, the part above the fixed monthly pay), up to ₩2,400,000 a year | Fishing crew production allowances — outside the calculator |
Rule Article 9(2) defines the people in Decree paragraph (1) item 2 as seafarers serving on fishing vessels, not including the master under Article 2(3) of the Seafarers Act. The calculator does not decide whether your job is in Schedule 2, so pick the “job” box after checking the classification your employer uses for withholding.
Rule Article 9(1) defines the people in Decree Art. 17(1) items 1 and 3 alike as workers in the jobs listed in Schedule 2. Schedule 2 (amended 20 March 2026) reads as below (our translation) — the numbers in brackets are Korean Standard Classification of Occupations codes, and the schedule’s note says they follow Statistics Korea Notice No. 2024-328 (1 July 2024): two-digit codes are sub-major groups, three-digit minor groups and four-digit unit groups.
| No. | Major group | Jobs listed (code) |
|---|---|---|
| 1 | Service workers | Care workers and carers (422) · care workers for older and disabled people (423) · beauty service workers (431) · tourism service workers (4421) · accommodation service workers (4422) · cooking and food service workers (45) |
| 2 | Sales workers | Shop sales and goods rental workers (52) · telecom sales workers (531) |
| 3 | Craft and related trades workers | Food processing trades (71) · textile, clothing and leather trades (72) · wood, furniture, musical instrument and signboard trades (73) · metal forming trades (74) · transport and machinery trades (75) · electrical and electronic trades (76) · ICT and broadcasting equipment trades (77) · construction and mining trades (78) · other trades (79) |
| 4 | Plant and machine operators and assemblers | Food processing machine operators (81) · textile and footwear machine operators (82) · chemical machine operators (83) · metal and non-metal machine operators (84) · machinery manufacturing operators and assemblers (85) · electrical and electronic operators and assemblers (86) · driving and transport machine operators (87) · water, sewage and recycling machine operators (88) · wood, printing and other machine operators (89) |
| 5 | Elementary workers | Construction and mining labourers (91) · transport labourers (92) · manufacturing labourers (93) · cleaning and building-care labourers (94) · housekeeping, food and sales labourers (95) · farming, fishing and other service labourers (99) |
Schedule 2 has no row for managers, professionals or clerical workers. Item 1 also requires the person to be “working in a factory or mine”, so for the same machine-operator job the workplace matters too (our reading). Which code your job falls under is settled by the job descriptions in the Korean Standard Classification of Occupations, which this article does not reproduce.
How the calculator works — our reading
| Line | Arithmetic | Points to note (our reading) |
|---|---|---|
| Covered worker | listed job · base pay ≤ ₩2.6 million · prior-year total ≤ ₩37 million | “Or less”, so exactly ₩2.6 million or ₩37 million is covered |
| Limit left | max(0, ₩2.4 million − amount already exempted this year) | Regular workers only |
| Exempt this month | regular: min(this month’s pay, limit left) / mine or day: the whole of this month’s pay | 0 if not covered |
| Taxable this month | this month’s pay − exempt this month | Goes into total salary as employment income |
Six cases — our examples
| Case (our example) | Result | Points to note (our reading) |
|---|---|---|
| Base pay ₩2.4 million, prior-year total ₩30 million, overtime ₩300,000, nothing exempted yet | ₩300,000 exempt · nothing taxable | ₩2.1 million of the yearly limit left |
| Same, with ₩2.2 million already exempted | ₩200,000 exempt · ₩100,000 taxable | The limit fills up this month |
| Base pay ₩2.65 million (otherwise the same) | Not covered that month · ₩300,000 taxable | Our reading tests base pay month by month |
| Prior-year total ₩38 million | Not covered · ₩300,000 taxable | The ₩37 million threshold |
| Day worker, ₩2.5 million already exempted, overtime ₩300,000 | The whole ₩300,000 exempt | Mine and day workers: “the whole of that pay” |
| Base pay exactly ₩2.6 million, prior-year total exactly ₩37 million | Covered — ₩300,000 exempt (nothing exempted yet) | Falls within “or less” |
With ₩200,000 of overtime pay every month, 12 months come to exactly the ₩2.4 million limit. At ₩300,000 a month the total reaches ₩2.4 million in the eighth month, and from September the same pay is all taxable (our arithmetic, assuming it starts in January).
Related calculators
- How much the overtime pay is — the 50% premium: overtime and night-work pay calculator.
- Withholding for day workers — daily worker income tax calculator.
- Meals, car and childcare allowances — tax-free allowance calculator.
- Childbirth support — childbirth bonus tax-free checker.
- The conditions item by item — non-taxable pay allowances.
Checklist
- ☐ Whether your employer classes your job as production work or similar for withholding
- ☐ This month’s base pay — excluding bonuses, overtime pay and reimbursement-type pay such as meal allowances
- ☐ Last year’s total pay on your withholding receipt (₩37 million or less?)
- ☐ How much overtime pay has already been exempted this year
- ☐ For mine or day work, whether the whole amount is exempt
Questions that remain
What if I started work this year and had no total pay last year?
The provision says “a worker whose total salary for the previous tax period is ₩37,000,000 or less”. With no total pay in the previous tax period, we treat it as 0 and so ₩37 million or less (our reading — we have not read the NTS rulings). Enter 0 in the calculator.
If base pay goes over ₩2.6 million in one month, am I out for the whole year?
The calculator tests the threshold against that month’s base pay — only that month’s overtime pay is taxed and other months are counted as usual (our reading). The provision just says “monthly base pay of ₩2,600,000 or less” and does not spell out whether it is tested month by month.
I work in an office but get paid for working late — is that covered?
If the job is not one in Decree Art. 17(1), this exemption does not apply — the Schedule 2 table above has no row for clerical workers. Set the “job” box to “not listed” and the whole allowance shows as taxable.
Sources
- Korean Law Information Center — Income Tax Act Art. 12(3)(deo) and Art. 20 — original text (current version, in force 1 July 2026, Act No. 21221; checked 10 November 2026).
- Korean Law Information Center — Enforcement Decree of the Income Tax Act, Art. 17 — original text (current version, in force 1 October 2026, Presidential Decree No. 36737; checked 10 November 2026). Para. (1): base pay ₩2,600,000, total pay ₩37,000,000, definition of base pay, items 1–3; para. (2): ₩2,400,000 a year, the whole amount for mine and day workers, seafarers’ production allowances.
- Korean Law Information Center — Enforcement Rule of the Income Tax Act, Art. 9 — original text (current version, in force 1 July 2026, Ministry of Finance and Economy Ordinance No. 33; checked 10 November 2026). Para. (1): jobs in Schedule 2 for items 1 and 3 alike; para. (2): fishing-vessel crew, not the master. Schedule 2 (amended 20 March 2026) read in the annex viewer on 10 November: 32 listed jobs with their codes.
- Not read. The job descriptions in the Korean Standard Classification of Occupations (Statistics Korea Notice No. 2024-328), Decree Art. 17-4 (welfare-type pay) in full, and NTS rulings on when base pay is tested and on new starters.
- What we added. Testing the threshold month by month, treating no prior-year pay as 0, working out the limit left from earlier months, and the “points to note” column.
Where to check further
- Your payroll team — your job classification, how base pay is worked out, and this year’s exempt total so far.
- NTS Hometax — the tax-free income boxes on your year-end employment income withholding receipt.
Written on 10 November 2026. The provisions are quoted from the original; the readings and arithmetic are ours.
