Divide monthly pay by 174 hours and a minimum wage breach looks lawful
A breach is judged by dividing monthly pay by the contracted hours including paid weekly holiday hours, which is 209 for a 40-hour week. Divide by 174 instead and the rate is inflated by about 20%, so a breach reads as lawful.
Conditions used in the video
- Monthly pay (gross)
- ₩2M
- Weekly hours
- 40
- Holiday hours
- 8
- Contracted monthly hours
- 209
- Minimum wage for 2026
- ₩10,320
Results
- Dividing by 209
- ₩9,569
- Dividing by 174
- ₩11,494
- 209 hours = (40 + 8 holiday) × 4.345
- 208.57 → 209
- 174 hours = 40 × 4.345 (holiday excluded)
- 173.8 → 174
- The minimum that applies
- ₩10,320
- Pay it should be
- ₩2,156,880
- Short each month
- ₩156,880
At a glance
Gross pay of ₩2M a month on a 40-hour week.
- 209 hours (the legal test)₩9,569
(40 + 8 holiday) × 4.345 = 209 · below the minimum
- 174 hours (holiday excluded)₩11,494
40 × 4.345 = 174 · the 8 holiday hours are gone · reads as lawful
Why it works this way
On a monthly salary the hourly rate is not visible. To test the minimum wage the pay has to be divided by hours, and the verdict turns on which hours.
Take gross pay of ₩2M a month for a 40-hour week.
최저임금법 시행령 제5조제1항제2호·제3호.
- Art. 5(1)2 · one week40 contracted hours + 8 paid holiday hours = 48
- Art. 5(1)3 · one month48 × average weeks in a year ÷ 12
- So48 × 52.14 ÷ 12 = 208.57 → 209 hours
🔴 The Decree fixes the method, not the number. Neither 52.14 nor 209 appears in it. Reading "average weeks in a year" as 365 ÷ 7 gives 52.14 weeks (4.345 a month). The 209 figure is what the Ministry itself uses in the minimum-wage notice: ₩10,320 × 209 = ₩2,156,880 a month.
Dividing by 209: ₩2M ÷ 209 is ₩9,569. The minimum for 2026 is ₩10,320. That is a breach.
Now count only the hours actually worked, without the holiday hours. 40 hours × 4.345 (the average number of weeks in a month) is 174.
Same pay, same hours.
- ₩2M ÷ 209 hours₩9,569 (below)
- ₩2M ÷ 174 hours₩11,494 (reads as lawful)
- The gapinflated by about 20%
Monthly pay normally already includes the holiday pay. Removing the holiday hours only from the divisor treats it as if it were never paid, which lifts the rate.
So a breach is judged on 209 hours, holiday included. The 174-hour figure is only for comparison, where an employer says holiday pay is paid separately on top of the salary.
What should the pay be on these hours? ₩10,320 × 209 is ₩2,156,880. At ₩2M, that is ₩156,880 short every month.
최저임금법 제6조제3항.
- A term setting pay below the minimumis void
- That part is treated ashaving agreed the minimum wage
- Sothe difference can be claimed
This holds even where the contract was signed. If payment is refused, a complaint can be made to the regional employment and labor office for the workplace.
One caution. Do not divide the amount that reached your account. It is net of social insurance and income tax, so the rate comes out lower than it is and can show a breach where there is none. Use the gross total from the payslip.
Overtime pay mixed in is the same problem in reverse. Overtime, night and holiday premiums do not count towards the minimum wage, so including them lifts the rate above what it really is.
So: to turn monthly pay into an hourly rate, divide by 209 hours including the holiday hours, and use the gross figure with premiums taken out.
The legal basis
Drawn from government announcements and the statutes themselves as primary sources, covering only the relevant part.
최저임금법 시행령 제5조제1항제3호 (converting monthly pay)
In force in force
Pay set on a monthly basis is divided by the monthly "hours forming the basis for applying the minimum wage", that is, the weekly figure (contractual working hours plus the hours treated as paid under Article 55(1) of the Labor Standards Act) multiplied by the average number of weeks in a year and divided by 12.
What this means
🔴 The divisor is the contracted hours, and for a worker entitled to a paid weekly day off those paid hours are included. A 40-hour week gives 209.
근로기준법 제55조제1항 (paid weekly holiday)
In force in force
An employer must guarantee a worker at least one paid day off per week on average.
What this means
This paid day is the 8 hours inside the 209. Under 15 contracted hours a week it does not arise, so the divisor is simply the hours worked.
최저임금법 제6조제1항·제3항 (effect)
In force in force
An employer must pay a worker covered by the minimum wage no less than the minimum wage. A contract setting pay below it is void as to that part, and the void part is treated as having agreed pay equal to the minimum wage.
What this means
Even where signed, that part is void and the minimum is treated as agreed. The difference can be claimed.
2026년 적용 최저임금 (Ministry of Employment and Labor notice)
In force applies from 2026-01-01
₩10,320 an hour, with a monthly equivalent of ₩2,156,880 on a 40-hour week and 209 monthly hours.
What this means
The notice's own monthly figure is calculated on 209 hours, which is itself why dividing by 174 is wrong.
Run it on your own numbers
The calculator opens with these conditions already filled in. Change the figures and your own case comes straight out.
Open the Hourly Rate From Monthly Pay
Frequently asked
Why 209 hours?
최저임금법 시행령 제5조제1항제3호 divides monthly pay by the contracted hours for the month, and for a worker entitled to a paid weekly day off those paid hours are included. A 40-hour week gives (40 + 8) × 365 ÷ 7 ÷ 12 = 208.57 → 209 hours.
Can I divide by 174 instead?
Not for judging a breach. 174 is the hours actually worked without the holiday hours, so the same pay divided by it comes out about 20% higher. Monthly pay normally already includes holiday pay, so the divisor has to include the holiday hours.
Can I use the amount that reached my account?
No. That is net of social insurance and income tax, so dividing it gives a lower rate and can show a breach where there is none. Use the gross total from your payslip.
What if overtime pay is mixed in?
The rate comes out higher than it really is. Overtime, night and holiday premiums do not count towards the minimum wage, so take them out and use base pay plus the fixed allowances paid every month.
What if I work under 15 hours a week?
No holiday hours are added, so the divisor is simply the hours worked. The paid day off under 근로기준법 제55조제1항 arises only at 15 contracted hours a week or more.
What if it is below the minimum?
최저임금법 제6조제3항 makes the term void and treats the minimum as agreed. You can claim the difference even if you signed, and a complaint can be made to the regional employment and labor office for your workplace.
Results are estimates based on the inputs and on the rules as at the stated date. They may differ from a lender's actual assessment, and the rules change often. Take professional advice before any decision that matters.