Annual Leave Calculation in Korea: Hire-Date vs. Fiscal-Year Methods Explained

Why Is Annual Leave So Confusing?

Annual leave (연차유급휴가) is a statutory paid leave entitlement under Article 60 of the Labor Standards Act (근로기준법 제60조). Because companies calculate it differently, many workers are unsure exactly how many days they have. There are two main methods — the hire-date basis and the fiscal-year basis (January 1) — and whichever method a company uses, it must not be less favorable to the worker than the statutory minimum.

Note for foreign workers: Your employment contract may specify terms, but they cannot fall below the statutory minimums described below.

1. Workers with Less Than 1 Year of Service: 1 Day for Each Month of Perfect Attendance

Workers who have not yet completed one year of service earn 1 day of paid leave for each full month of perfect attendance (Article 60, Paragraph 2 of the Labor Standards Act / 근로기준법 제60조 제2항). Up to 11 days can be accrued over the first 11 months.

Example: Hired March 1, 2026 → 1 day accrues on April 1, another on May 1, and so on.

These monthly leave days are separate from the 15-day entitlement that arises on the day after the first year of work is completed for workers who attended at least 80% of the year — using them does not reduce the 15 days, and the up-to-11 monthly days and the 15 days accrue separately (Article 60(1)–(2) of the Labor Standards Act / 근로기준법 제60조 제1항·제2항). The former Article 60(3) of the Labor Standards Act (근로기준법 제60조 제3항), which allowed such deduction, was deleted by the amendment of 28 November 2017, in force from 29 May 2018, so workers who reach their first anniversary after that date receive the full 15 days without deduction.

2. At Least 80% Attendance for the Year: 15 Base Days + Long-Service Addition

A worker who has maintained an attendance rate of 80% or more over one year is entitled to 15 days of annual leave. For the purpose of calculating the attendance rate, absences due to occupational injury or illness, maternity leave (출산전후휴가), and parental leave (육아휴직) are all counted as days worked (Article 60, Paragraph 6 of the Labor Standards Act / 근로기준법 제60조 제6항).

Long-Service Addition (가산 연차)

For workers with 3 or more years of continuous service, 1 additional day is added for every 2 years beyond the first year (Article 60, Paragraph 4 of the Labor Standards Act / 근로기준법 제60조 제4항). The maximum entitlement is 25 days.

Figures for one year or more apply where the worker attended at least 80% of the year (Article 60(1) and (4) of the Labor Standards Act, 근로기준법 제60조 제1항 · 제4항).

3. Key Points When Using the Fiscal-Year Basis

Many companies grant annual leave on a January 1 – December 31 fiscal-year basis for administrative convenience. Under this method, leave for the year of hire is calculated pro rata from the hire date to December 31.

Example: Hired July 1, 2026 → Leave granted for 2026 = 15 days × (6 months ÷ 12 months) = 7.5 days → rounded up or down per company policy.

However, this method must not be less favorable to the worker than the hire-date basis. Under Article 60 of the Labor Standards Act (근로기준법 제60조) the hire-date basis is the default, and fiscal-year administration is an established practice adopted for convenience. Where it is used, established practice is that the entitlement is recalculated on a hire-date basis at the time of resignation, with any shortfall paid out — and the practice cannot be applied to the worker's disadvantage.

4. Expiry of Annual Leave and Leave Allowance

Unused annual leave expires within 1 year of the date it accrued. However, monthly leave earned during the first year expires if it is not used by the end of the first year of service (Article 60(7) of the Labor Standards Act / 근로기준법 제60조 제7항). However, if the employer has not taken the required leave-encouragement measures (사용 촉진 조치, e.g., written notice), the employer must pay an annual leave allowance (연차수당) for any unused days (Article 61 of the Labor Standards Act / 근로기준법 제61조). The allowance is calculated on the basis of the ordinary wage or the average wage as set by the rules of employment or similar (Article 60(5) of the Labor Standards Act / 근로기준법 제60조 제5항).

Calculate Your Leave Instantly with Workbear

Enter your hire date and length of service to automatically find out your remaining annual leave days and expiry date — use the Workbear Annual Leave Calculator. It supports both the fiscal-year and hire-date methods and also shows your estimated unused annual leave allowance.

This article is for informational purposes only and does not constitute legal advice. For specific cases, consult a certified labor attorney (노무사) or lawyer.