Annual Leave Pay: When Unused Leave Turns Into Money

As of September 24, 2026. This post covers only when paid annual leave turns into money. If the company's rules give more leave than the statutory minimum, those rules may take precedence.

Who it applies to

Workers covered by the annual leave provisions of the Labor Standards Act. Those scheduled to work less than 15 hours a week on average over four weeks are not covered.

Days accrued:

• 80% or more attendance over one year: 15 days.
• Under one year of continuous employment, or less than 80% attendance over a year: 1 day per month worked.
• After three years of continuous employment: 1 additional day for every two years beyond the first year. The ceiling including the additional days is 25 days.

The right to use leave lasts one year from the day it accrued. After that year the claim expires, and unused days must still be compensated at the ordinary wage unless the employer made a lawful request to use them.

The formula

Annual leave pay = unused annual leave days × one day of ordinary wage

One day of ordinary wage is the ordinary hourly wage × scheduled daily working hours. At 40 hours a week and 8 hours a day, that is ordinary hourly wage × 8. The 2026 comparison hourly rate for a worker on the minimum wage is 10,320 won, so with nothing else counted as part of the ordinary wage, one day is 82,560 won.

If the employer made a request to use leave (Article 61 of the Labor Standards Act) at the time and in writing as the law requires, and the worker still did not take it, the employer does not have to pay for the unused portion. A spoken "you should take a holiday" does not qualify.

Example

With one day of ordinary wage at 82,560 won and 5 expired leave days with no request to use them, the payment is 412,800 won. The same 5 days with a lawful request mean the payment is 0 won.

Sources

Articles 60 and 61 of the Labor Standards Act. The 2026 hourly minimum wage of 10,320 won is from Ministry of Employment and Labor Notice No. 2025-47.