Overtime Pay Is a 50% Premium on Your Regular Wage -- How to Calculate It, and Why Businesses Under 5 Employees Are Exempt
Everyone knows overtime pay means "50% more than your regular hourly wage." Few people, though, ever check whether the amount printed on this month's payslip actually matches that formula. The figure depends on how your base hourly wage is defined and how many employees your workplace has -- and if you don't know that difference, you can be underpaid without ever noticing.
Labor Standards Act Article 56 -- Overtime, Night, and Holiday Work Each Carry a Different Premium
Article 56 of the Labor Standards Act treats three types of work separately. Overtime work -- hours beyond the fixed schedule -- must be paid at 50% or more above the regular wage. Night work, defined as hours between 10 p.m. and 6 a.m., also carries at least a 50% premium. Holiday work is split by length: the first 8 hours get a 50% premium, and anything beyond 8 hours jumps to a 100% premium. If overtime hours also fall inside the night-work window, the two premiums stack, adding a full 100% on top of the regular wage.
Running the Numbers -- If Your Hourly Wage Is ₩12,000
Say a worker's regular hourly wage is ₩12,000 and they work one hour beyond their scheduled hours. For that single hour, they should receive the base ₩12,000 plus a 50% premium, or ₩18,000. If that hour also falls after 10 p.m., the overtime premium and the night premium both apply, pushing the rate up to double the regular wage, or ₩24,000. If a payslip lumps overtime pay into a single unexplained line, it's worth working backward from the hourly rate to check whether the number actually adds up.
The Baseline Is 'Regular Wage' -- and Bonuses Aren't Always Included
The wage used as the baseline for these premiums is the regular wage: pay that is fixed, uniform, and paid on a regular basis. Base salary and fixed job allowances that come every month are included, but performance-based bonuses or conditional allowances are often excluded for lacking that fixed, guaranteed quality. Despite sharing the word wage, this is calculated on a different basis than the average wage used to calculate severance pay, so confusing the two concepts will throw off your math.
Workplaces Under 5 Employees Have No Premium Obligation at All
Under Article 11 of the Labor Standards Act, workplaces with fewer than 5 regular employees are not subject to the overtime, night, and holiday premium provisions. That means if you work one extra hour at a business with fewer than 5 employees, paying only the regular wage for the time worked -- with no premium at all -- is not a violation of the law. This is exactly where the excuse that a small company can't help it comes from. Put the other way around, the moment a business reaches 5 regular employees, the same company suddenly owes premium pay it didn't owe before.
Overtime Has a Cap Too -- 12 Hours a Week, and Only With Mutual Agreement
Paying the premium doesn't give an employer unlimited license to demand overtime. Article 53 of the Labor Standards Act allows working hours to be extended by up to 12 hours per week, but only when both parties agree. Ordering overtime unilaterally, without agreement, or exceeding this 12-hour cap is a violation of the working-hours rules -- regardless of whether the premium was paid. If overtime instructions are frequent at your workplace, it's worth checking whether there's actually a signed agreement or an internal policy covering consent to overtime.
Even Under a Comprehensive Wage System, the Calculation Still Has to Hold Up
Some companies use a comprehensive wage system that folds overtime pay into the base salary in advance. That structure isn't illegal by itself, but whether the folded-in overtime pay actually matches the amount the Labor Standards Act formula would produce is still something you can check. Payslips are supposed to break out the hours and amounts for overtime, night, and holiday work separately. When that breakdown is missing or lumped into one number, workers have no real way to verify how much premium they actually received.
Even During Probation, the Same Premium Rates Apply
The 90% minimum-wage reduction allowed during probation applies to the base wage itself -- it is not a clause that lowers the overtime premium rate. If a lower hourly wage was set because of probation, you simply apply the 50% (or 100%) premium on top of that lower hourly wage. The claim that overtime pay gets cut too just because you're on probation has no legal basis.
Putting It in Order
① Check this month's payslip to see whether overtime, night, and holiday hours and amounts are broken out by category. ② Multiply your regular hourly wage by 50% (overtime/night) or 100% (holiday work beyond 8 hours) to verify the math yourself. ③ Check whether other statutory allowances in the same family, like weekly holiday pay, are also missing. ④ Confirm whether your workplace has 5 or more regular employees -- under 5, there is no premium obligation at all. ⑤ If the math doesn't add up, contact the Ministry of Employment and Labor's online labor portal or call 1350 to check the facts first.
This article is general guidance based on Articles 11, 53, and 56 of the Labor Standards Act. For your specific workplace's regular-wage calculation and any exact underpayment amount, confirm with the labor inspector at your regional employment and labor office or a certified labor attorney.
All content is fact-checked under our editorial standards.