Late Payment Interest
Late Payment Interest - Monthly wages, severance pay, and DB-type retirement pensions
1. Delay in payment of monthly wages
1) Where the regular wage payment date is on or before October 22, 2025
From the day following the regular wage payment date until payment : 6% per annum (Article 54 of the Commercial Act)
Where the employee prevails in litigation, from the day following service of the complaint until payment : 12% per annum
(Article 3 of the Act on Special Cases Concerning Expedition, etc. of Legal Proceedings)
2) Where the regular wage payment date is on or after October 23, 2025
From the day following the regular wage payment date until payment : 20% per annum (Article 37(1)2 of the Labor Standards Act)
→ No criminal penalty applies to non-payment of late payment interest; however, the obligation to pay such interest exists under civil law.
2. Delay in payment of severance pay or a DB-type retirement pension
(where payment is delayed beyond 14 days from the retirement date)
1) For the period up to October 22, 2025 : 6% per annum (Article 54 of the Commercial Act)
2) For the period on or after October 23, 2025 : 20% per annum (Article 37(1)1 of the Labor Standards Act)
→ No criminal penalty applies to non-payment of late payment interest; however, the obligation to pay such interest exists under civil law.
3. Delay in payment of a DC-type retirement pension
1) From the day following the contribution due date until 14 days from the date the cause for payment of retirement benefits arises :
10% per annum (Article 20(3) of the Employee Retirement Benefit Security Act; Article 11(1) of its Enforcement Decree)
2) From the day following the above 14-day period until the final payment date : 20% per annum
(Article 20(3) of the same Act; Article 11(2) of its Enforcement Decree)
→ Failure to pay late payment interest or the principal contribution is subject to criminal punishment
(up to three years’ imprisonment or a fine of up to KRW 30 million), and may be addressed through a complaint to the Ministry of E. and L.
(Article 20(5) and Article 44(2) of the Employee Retirement Benefit Security Act).
Other Provisions
Where payment of wages or contributions is delayed due to force majeure, natural disasters, or other reasons prescribed
by Presidential Decree, the above provisions shall not apply during the continuation of such reasons
(Article 37(3) of the Labor Standards Act; Article 20(4) of the Employee Retirement Benefit Security Act, etc.).
1. Delay in payment of monthly wages
1) Where the regular wage payment date is on or before October 22, 2025
From the day following the regular wage payment date until payment : 6% per annum (Article 54 of the Commercial Act)
Where the employee prevails in litigation, from the day following service of the complaint until payment : 12% per annum
(Article 3 of the Act on Special Cases Concerning Expedition, etc. of Legal Proceedings)
2) Where the regular wage payment date is on or after October 23, 2025
From the day following the regular wage payment date until payment : 20% per annum (Article 37(1)2 of the Labor Standards Act)
→ No criminal penalty applies to non-payment of late payment interest; however, the obligation to pay such interest exists under civil law.
2. Delay in payment of severance pay or a DB-type retirement pension
(where payment is delayed beyond 14 days from the retirement date)
1) For the period up to October 22, 2025 : 6% per annum (Article 54 of the Commercial Act)
2) For the period on or after October 23, 2025 : 20% per annum (Article 37(1)1 of the Labor Standards Act)
→ No criminal penalty applies to non-payment of late payment interest; however, the obligation to pay such interest exists under civil law.
3. Delay in payment of a DC-type retirement pension
1) From the day following the contribution due date until 14 days from the date the cause for payment of retirement benefits arises :
10% per annum (Article 20(3) of the Employee Retirement Benefit Security Act; Article 11(1) of its Enforcement Decree)
2) From the day following the above 14-day period until the final payment date : 20% per annum
(Article 20(3) of the same Act; Article 11(2) of its Enforcement Decree)
→ Failure to pay late payment interest or the principal contribution is subject to criminal punishment
(up to three years’ imprisonment or a fine of up to KRW 30 million), and may be addressed through a complaint to the Ministry of E. and L.
(Article 20(5) and Article 44(2) of the Employee Retirement Benefit Security Act).
Other Provisions
Where payment of wages or contributions is delayed due to force majeure, natural disasters, or other reasons prescribed
by Presidential Decree, the above provisions shall not apply during the continuation of such reasons
(Article 37(3) of the Labor Standards Act; Article 20(4) of the Employee Retirement Benefit Security Act, etc.).