from raising the minimum wage to expanding tax breaks, 2026 brings a slew of helpful changes for workers and families. here's a roundup of the new economic policies that could help you save money if you know what to expect.
this is what 2026 will look like! A roundup of savory economic policies
the minimum wage is going up, along with national pension and health insurance premiums, and you can save on transportation with the K-Pass.
more tax breaks for raising children, including tax-free childcare allowance and expanded credit card deductions.
there are good policies for saving money, such as RIAs and youth future savings accounts that reduce the transfer tax on overseas stocks.
from the minimum wage to National Insurance contributions, the start of 2026 brings a host of economic policies that affect our lives. Here's a quick rundown of what's changing and the key things you need to know.
workplace policy changes in 2026
minimum wage increases, unemployment benefits cap increases
in 2026, the minimum wage will be $1,320per hour, an increase of 2.9% from the previous year. A 40-hour workweek will result in a monthly salary (including weekly vacation pay) of about $2 ,216,880, an increase of about $100,000 from the previous year. The daily unemployment benefit cap will also increase from $66,000 to $68,100.
will the increase in various insurance premiums reduce the amount of realized benefits?
meanwhile, social insurance contribution rates for national pension and health insurance will increase in 2026, which could reduce the amountof money you receive per month. The national pension contribution rate will increase from 9% to 9.5% of your salary, which means you will pay about KRW 7,700 more per month based on an average income of KRW 3.09 million, and the health insurance contribution rate will increase from 7.09% to 7.19%, which means more money will be taken out of your paycheck. if you don't have a big salary increase, these premium increases could actually reduce your take-home pay.
k-Pass for transportation costs
the newly introduced K-Pass "Everyone's Card" allows you to save on public transportation costs. It is a flat-rate card that allows you to pay up to62,000 won per month for buses and subways in the Seoul metropolitan area and 100,000 won per month for public transportation including GTX. If you are a frequent public transportation user, you can save a lot on transportation costs with the Everyone's Card.
increased maternity leave pay and expanded child allowance
starting this year, the maximum monthly maternity leave salary will increase from KRW 2.1 million to KRW 2.2 million. The spousal maternity leave salary will also increase from KRW 1.676 million to KRW 1 .684million. The child allowance, which provides KRW 100,000 per month for children, has also been expanded from under8 years old to under 9 years old.
piloting the 4.5-day workweek
some public institutions and companies are piloting a 4.5-day workweek. IBK will offer an early retirement system of 1 hour on Wednesdays and Fridays, and NH Bank will offer a shortened workweek of 1 hour on Fridays.
expanding benefits for families with children
tax-free childcare allowance
the tax-free limit for childcare allowancespaid by employers will be expanded in 2026. Previously, up to 200,000 won per child per month was tax-free regardless of the number of children, but now up to 200,000 won per child per monthwill be tax-free.
increased credit card deduction limit
the credit card deduction limit for workers with children has been increased. Those with a total salary of 70 million won or less can deduct 500,000 won per child (250,000 won for those earning more), and up to two children can receive additional benefits.
expanded deduction for arts and crafts school fees
from 2026, the tax deduction (15%) for arts and crafts school expenses, which was only applicable to preschoolers, will be expanded to elementary school grades 1 and 2 (under the age of 9). Taekwondo, art, piano, and other arts and crafts school expenses are now eligible for the deduction, making it easier for parents to pay for their children's education.
parental Work Time Adjustment System
starting this year, the parenting time adjustment system (also known as the "10:00 a.m. parenting period") will be implemented. Employees of small and medium-sized companies with children under the age of 12 will be allowed to work one hour later (10:00 a.m.). The system will be available without a reduction in wages, and the government will provide companies with 300,000 won per month per employee. It is expected to be a realistic support measure to ease the burden of childcare for working parents.
tax incentives for savers
separate taxation of dividend income to ease tax burden
for those who invest inhigh-dividend stocks, the tax burden has been eased. Previously, financial income such as interest and dividends exceeding KRW 20 million per year was taxed at a maximum rate of 45% when combined with other income, but now dividend income from high-dividend listed stocksis separated from other income and taxedat a maximum rate of 30%. The 30% tax rate instead of 45% reduces the tax burden on high-dividend investors.
helping young people save for their future with the launch of the Youth Future Savings Account
in June 2026, the Youth Future SavingsAccount will be launched as a new youth policy financial product, succeeding the Youth Leapfrog Account in 2023. Young adults aged 19-34 can save up to KRW 500,000 per month for three years and save up to KRW 20 million or more with thegovernment's contribution. The enrollment period has been shortened, but the contribution limit has been maintained, and it is expected to be a supportive measure to help young adults save money.
introducing RIA accounts for overseas stock investors
rIA accountsfor investors in overseas stocks will be introduced in 2026. If you sell overseas stocks and invest the funds in domestic stocks through an RIA account for at least one year, you can get a 50-100% reduction in capital gains tax onoverseas stocks.
the bottom line
knowing about the 2026 tax changes ahead of time will help you take advantage of all the benefits, and I hope you're able to take advantage of them this year.
what are your favorite policy changes for 2026? share your thoughts in the comments! 🎉 ðŸ˜'
FAQs
Q. how much will the minimum wage increase to in 2026?
A. It will be 1,320 won per hour, a 2.9% increase from 2025 (1,30 won).
Q. What is the K-Pass "Everyone's Card" program?
A. It is a flat-rate card that reimburses the excess amount of public transportation expenses over a certain amount (62,000 won for general, 100,000 won for GTX).
Q. who can enroll in the Youth Future Savings Plan?
A. Young adults between the ages of 19 and 34 can save up to 500,000 won per month for three years and save up to 20 million won with government support.