Never Sign a Korean Job Contract Without Checking This Overtime Clause

Congratulations on getting the offer! The HR manager sends over the contract in Korean, you skim it, sign it, and start your new job in Korea.

But, three months later you're staying past 9pm on overtime most days, and your paycheck still stays the same.

Before you sign your next Korean job contract, make sure to check for this clause.

포괄임금제 vs. 비포괄임금제

In Korea, the standard workweek is 40 hours. Anything past that is usually considered overtime for most corporate roles, and by law overtime, night work and holiday work are paid at least 1.5x your normal hourly rate.

But a lot of Korean companies use something called 포괄임금제 (comprehensive wage system). It means your overtime is "already included" in your salary. Work 40 hours or 52 hours, you still get paid the same amount. This is where the term 공짜야근, "free overtime," comes from.

What you want instead is to aim for 비포괄임금제 (non-comprehensive wage system). Your base salary covers your 40 hours, and every hour of overtime is tracked and paid on top of your existing salary.

How to spot it in your contract

Look for these clauses inside the Korean job contract:

Comprehensive wage system

포괄임금 or 포괄산정
제수당 포함 (all allowances included)
연장, 야간, 휴일근로수당 포함 (overtime, night and holiday pay included)
고정연장근로수당 or 고정OT (fixed overtime pay), with no mention of what happens when you go over
A single annual salary number with no breakdown at all

Exclusive wage system:

비포괄임금제 written out clearly
연장근로 시 근로기준법에 따라 별도 지급 (overtime paid separately according to the Labor Standards Act)
A clear split between base pay (기본급) and each allowance

Just wanted to state that not all comprehensive wage system is bad.

For example, 고정 OT, fixed overtime is when companies pay a set number of overtime hours every month whether you work them or not. That's fine, as long as hours above that amount are paid separately.

What changed in 2026

On April 8, 2026, the Ministry of Employment and Labor released a guideline to stop the abuse of 포괄임금제, and started applying it to workplace inspections on April 9. Under the guideline:

A flat salary that doesn't separate base pay from allowances isn't accepted.
If your fixed overtime pay is less than what you'd get for the hours you actually worked, the company has to pay you the difference.
That unpaid difference counts as unpaid wages (임금체불), which companies can get penalized for.

The inspections are already finding problems. When the Ministry inspected 101 suspected workplaces, it found unpaid "free overtime" at 82 of them.

What hasn't happened yet as of writing this in October 2026: a law that fully bans 포괄임금제. Several bills are in the National Assembly, and in October 2026 the labor minister said he wants one passed in the second half of this year. Until it passes, the guideline and the existing Labor Standards Act are what protect you.

Yes, this applies to YOU too

Korea's Labor Standards Act covers you no matter your nationality or visa, so your overtime is protected the same way a Korean coworker's is.

And your employer is required to give you an itemized pay stub (임금명세서) that shows your overtime hours and how your pay was calculated. If you're not getting one, that should already be a problem on its own.

Already signed and working? Here's what to do

Don't panic. Signing a 포괄임금제 contract doesn't mean you gave up your right to be paid for the hours you work.

Track your hours. Keep your own record of when you start and finish every day. Screenshots of your clock-in system, emails and messages sent late all help. If the company intra has a separate system for tracking, make sure to export the data.
Check your pay stub. Compare the overtime you were paid with the overtime you actually worked.
Ask HR in writing. Ask how overtime above the fixed amount is calculated and paid.
Know your backup. If the company won't fix it, you can file a complaint with the Ministry of Employment and Labor (📞call 1350). Unpaid wage claims can go back up to 3 years.

Asking about it before you sign

If the contract is unclear to you, you can simply say:

EN: "Could you let me know if this role is 포괄임금제 or 비포괄임금제, and how overtime is calculated?"

KOR: “혹시 연장근로수당은 어떻게 산정되는지 여쭤봐도 될까요?”

Next steps

Global companies and good Korean companies in Korea are usually the easiest place to start, since some of them already use 비포괄임금제 or pay overtime separately.

To check them out, I put together a list of global companies hiring in Korea, and you can learn how to use it here.

And also to find good Korean companies, read this article here.

And if you want more personalized 1:1 help regarding your job applications in Korea, tell me more about your situation here.

This article is for general information, not legal advice. For your specific contract, check with the Ministry of Employment and Labor (1350) or a certified labor attorney (노무사).