What is Annual Paid Leave?
Regardless of employment type, workplaces with 5 or more regular employees must provide paid leave to workers who work 15 or more hours per week, and this must be specified in the employment contract.
Labor Standards Act, Article 60 (Annual Paid Leave)
① The employer shall grant 15 days of paid leave to workers who have attended 80 percent or more of the year. ② The employer shall grant 1 day of paid leave per month of perfect attendance to workers who have worked continuously for less than 1 year or who have attended less than 80 percent of the year. ④ For workers who have worked continuously for 3 years or more, the employer shall grant additional paid leave of 1 day for every 2 years of continuous service beyond the first year, in addition to the leave under Paragraph 1. In this case, the total number of leave days including additional leave shall be limited to 25 days.
Under Article 60 of the Labor Standards Act, employers are required to inform workers of their granted annual paid leave each year.
In flex, members can check their granted or upcoming annual leave at any time through the Leave Overview and Annual Leave Details!
Annual Paid Leave Accrual Criteria
Article 60 of the Labor Standards Act (Annual Paid Leave) stipulates that annual paid leave shall be granted to workers as follows.
① The employer shall grant 15 days of paid leave to workers who have attended 80 percent or more of the year. ② The employer shall grant 1 day of paid leave per month of perfect attendance to workers who have worked continuously for less than 1 year or who have attended less than 80 percent of the year.
To summarize the above, it is as follows!
Length of Service | Paid Leave Days |
Less than 1 year | For each month of perfect attendance, 1 day accrued based on hire date, up to 11 days total |
1 year or more | On the day after the 1st anniversary of the hire date, 15 days of annual leave accrued |
Additional Leave for Long-Term Service
Under Article 60, Paragraph 4 of the Labor Standards Act, the number of annual paid leave days increases as years of service accumulate.
Workers who have served 3 years or more are granted additional paid leave of 1 day for every 2 years.
The maximum total of additional days plus base days is 25 days.
Continuous service period for workers with 80%+ attendance in the previous year | Paid Leave Days |
1 year or more | 15 days |
2 years or more | 15 days |
3 years or more | 16 days |
4 years or more | 16 days |
5 years or more | 17 days |
· · · | · · · |
21 years or more | 25 days |
22 years or more | 25 days |
However, if annual leave is granted based on fiscal year, the timing of additional paid leave may differ from companies that grant annual leave based on hire date.
For example, let's say there is a member named Hong Gildong who joined on March 8, 2022. The leave would be granted as follows.
If you grant annual leave based on fiscal year and wish to grant additional annual leave when the employee reaches their 3rd calendar year, please click the Annual Leave Policy Guide and use the Additional Grant feature.
Year | Paid Leave Days (Hire Date Basis) | Paid Leave Days (Fiscal Year Basis) |
2023 | 15 annual leave days on March 8, 1st anniversary | Prorated annual leave granted on the first fiscal year date after hire |
2024 | 15 annual leave days for 2nd anniversary | 15 annual leave days granted on January 1 fiscal year date |
2025 | 16 annual leave days on March 8, 2025 for 3rd anniversary | 15 annual leave days granted on January 1 fiscal year date |
2026 | 16 annual leave days for 4th anniversary | 16 annual leave days granted on January 1 fiscal year date |
· · · | · · · | · · · |
Annual Paid Leave Grant Policies
There are two base dates for calculating annual paid leave.
Grant Based on Hire Date
When managing annual paid leave days based on hire date, the number of annual paid leave days is granted based on each worker's individual hire date. In this case, the grant and usage periods for paid leave differ for each member!
Grant Based on Fiscal Year
When managing annual paid leave days based on fiscal year, annual paid leave days are typically granted to all workers based on January 1 each year.
In this case, the grant and usage periods for paid leave are the same for all members! However, for workers with less than 1 year of service, even if annual leave is granted based on fiscal year, up to 11 days of annual paid leave are granted based on the hire date.
Leave Accrual Examples by Grant Policy
Let's see how annual paid leave is granted for a member who joined on August 14, 2023.
1. Based on Hire Date
From September 14, 2023 to July 14, 2024, 1 day of paid leave (monthly leave) is granted each month on the hire date anniversary
On August 14, 2024, 15 annual leave days are granted on the 1st anniversary of hire
2. Based on Fiscal Year
From September 14, 2023 to July 14, 2024, 1 day of paid leave (monthly leave) is granted each month on the hire date anniversary.
On the first fiscal year date of January 2024, 6 prorated annual leave days are granted proportional to the period worked.
For mid-year hires, the next fiscal year's paid leave days are accrued proportional to the number of days served in the previous year
(Prorated annual leave calculation formula: 15 days × number of days served in the previous year / 365)Depending on company internal rules or flex settings, 15 annual leave days may be pre-granted on the first fiscal year date.
Hire Date vs. Fiscal Year: What are the Differences Between Leave Grant Policies?
Each grant policy has clear advantages and disadvantages. Since the annual leave grant policy cannot be changed every year, you should carefully consider and decide on a policy that fits your company.
| Hire Date | Fiscal Year |
Advantages | 1. Annual leave can be calculated precisely according to the Labor Standards Act. 2. There is no need to separately calculate the unused annual leave amount upon resignation. | 1. Annual leave is granted uniformly to all members aligned with the fiscal year. 2. When conducting leave usage promotion, it can be done on the same date for all members, enabling settlement and promotion of unused annual leave allowances. |
Disadvantages | Since expiration dates differ for each member's granted annual leave, there are difficulties in managing leave usage promotion. | When a member resigns, annual leave must be recalculated based on hire date for comparison. If the number of leave days calculated based on fiscal year falls short of those calculated based on hire date, settlement through unused annual leave allowance is required for the shortfall. |
Annual Paid Leave Expiration Policy
It is very important that annual paid leave is used and expired as much as it is granted. Under Article 60, Paragraph 7 of the Labor Standards Act, annual paid leave expires if not used within 1 year of being granted.
Leave shall expire if not exercised within 1 year (for workers who have worked continuously for less than 1 year, the period refers to the period until the end of the first year of employment for paid leave under Paragraph 2).
Under the 2020 amended Labor Standards Act, annual paid leave granted to workers with less than 1 year of service expires entirely if not used within 1 year from the hire date, regardless of the individual accrual dates.
The expiration timing of annual paid leave also varies by each member's hire date and grant policy. For example, let's check when annual paid leave expires for a member who joined on August 14, 2023.
For annual paid leave granted to workers with less than 1 year of service
From September 14, 2023 to July 14, 2024, 1 annual paid leave day (monthly leave) is granted each month, and on August 14, 2024, all unused monthly leave expires.
When annual leave is granted based on hire date
The 15 annual paid leave days granted on August 14, 2024 expire on the 2nd anniversary (August 14) if not used by August 13, 2025.
When annual leave is granted based on fiscal year
The 6 prorated annual paid leave days granted on January 1, 2023 expire on the second fiscal year date (January 1, 2024) if not used by December 31, 2024.
If no expiration policy is configured, member annual leave will automatically carry over. If you are conducting leave usage promotion, we recommend using the Smart Leave Usage Promotion feature together with the leave expiration policy.