Review direct labor and plan notice together
This calculator uses Korean construction rules for 2026, with all amounts in KRW.
After winning a construction contract, a small contractor needs to divide work between its own workforce and subcontractors.
Confusing contract value with total labor can overstate cash needs, while treating a notice exception as a labor-duty exemption can leave missing evidence at completion.
The tool separates minimum direct labor, plan and execution differences, and the conditions for notifying a direct-execution plan under the Framework Act on the Construction Industry, Article 28-2, and Decree Article 30-2.
Use one confirmed contract and compare its cost breakdown with payroll records.
Amounts from different sites or separate subcontracts are not pooled to satisfy the obligation.
Use the results to reconsider remaining direct work and prepare evidence for the client; the tool does not determine subcontracting legality.
2026 rate bands: contract value selects, total labor multiplies
The Decree sets a contract-value threshold below KRW 7 billion.
Apply the selected rate to the total labor recorded in the contract cost breakdown under Act Article 28-2(1).
This is not a progressive calculation applying different rates to slices of contract value.
Korean 2026 direct-execution rates applied to total labor by contract value| Contract value (KRW) | Rate on total labor |
|---|
| Below 300,000,000 | 50% |
| 300,000,000 to below 1,000,000,000 | 30% |
| 1,000,000,000 to below 3,000,000,000 | 20% |
| 3,000,000,000 to below 7,000,000,000 | 10% |
Exactly KRW 300 million uses 30%, KRW 1 billion uses 20%, and KRW 3 billion uses 10%.
At KRW 7 billion or more, the result is outside this provision’s value threshold, with no established zero minimum.
Check any separate statutory or client requirements.
Where to find the inputs
Contract and cost breakdown
Use the confirmed value of this contract and its itemized total labor.
Total labor is neither the whole contract value nor money received into a bank account.
If included items or amendment approval remain unresolved, leave the basis unconfirmed and ask the client.
Direct plan and actual payments
Planned labor relates to work you intend to perform directly; actual labor is the cumulative amount supportable as direct execution.
Do not count subcontractor payroll or another site’s wages again.
An entered actual amount remains pending for execution comparisons until its evidence is confirmed.
A blank amount means unconfirmed; an entered zero is a confirmed zero.
Zero total labor requires cost-basis review and does not produce a final minimum.
The form rejects total labor above contract value and planned or actual labor above total labor.
Use whole KRW up to 1 trillion and the contract’s confirmed duration from 1 to 3,650 days.
Interpret minimum, plan shortfall and execution remaining
Three distinct comparisons
- Minimum direct labor = total labor × selected rate, rounded upward to whole KRW.
Upward rounding is the tool’s convention for meeting at least the minimum, not a claimed special statutory rounding rule.
- Plan shortfall = max(0, minimum − planned labor), the additional direct-labor plan needed.
- Verified execution remaining = max(0, minimum − verified actual labor).
The separate plan-to-actual gap is max(0, planned − verified actual).
Do not add plan shortfall and execution remaining: they compare the same minimum with different records.
A share of total labor and attainment of the minimum also use different denominators.
Actual labor at 20% of total labor attains about 66.67% of a 30% minimum.
Review the remaining construction work; do not interpret the difference as a fine or established loss.
Notice omission is a separate condition
Below KRW 40,000,000 AND no more than 30 days
Both conditions must hold for the small-and-short notice exception under Decree Article 30-2(4).
Exactly KRW 40,000,000 fails the value test, while exactly 30 days meets the duration test.
A smaller contract lasting 31 days does not qualify, and unknown duration does not establish this exemption.
Act Article 28-2(2) also provides a notice exception for a registered professional-construction contractor undertaking professional work.
Confirm both the registration category and the nature of the contracted work, rather than relying on the company’s description.
Both notice-omission paths remain separate from the direct-labor minimum.
Keep reviewing direct execution and payment evidence even when notice may be omitted.
The 30-day reference and actual receipt
Plan notice is generally required within 30 days of concluding the construction contract.
The screen counts from the following day and displays contract date + 30 calendar days as a reference before holiday adjustment.
For the example contract dated 2026-11-03, the reference is 2026-12-03.
A negative number of days from review to reference means the calendar reference has passed.
Weekend or public-holiday extensions, amendment starting dates and electronic receipt hours are not determined automatically.
Entering a notice date within the reference does not prove valid receipt.
Under Decree Article 30-2(5), timely notice to a supervisor on a supervised project is treated as notice to the client; confirm the recipient and retain the receipt.
Prepare Rule Article 25-5 Form 22-6, itemized work costs and the planned schedule.
Confirm the scope of substantive exceptions
Decree Article 30-2(3) covers written client approval considered necessary for quality or construction efficiency, and subcontracting the patent/new-technology portion to a contractor able to use that technology.
Convenience or an oral discussion does not establish those conditions.
Review the actual document, work category and affected portion with the client.
Selecting exception review keeps the minimum and shortfalls pending.
The tool does not subtract an arbitrary technology portion from total labor or expand a partial exception to the whole contract.
Notice can also require further review, while an independently confirmed notice-omission condition remains separate.
Pending means evidence must be reviewed first, not that there is no duty.
Step-by-step use
- Confirm the contract value, itemized total labor, contract date and duration.
For an amendment or completion review, use the currently approved cost basis.
- Separate statutory scope, the registered-specialist notice exception and substantive execution exceptions.
Keep unresolved questions unconfirmed.
- Enter direct-labor plans and cumulative actual payments, then confirm evidence if reviewed.
Choose planning, work in progress or completion review as appropriate.
- Enter the review date and optional actual notice date, then calculate.
An input change hides the old result, so submit again after editing.
- Compare the saved TXT with actual records, revise remaining direct work, and complete notice, amendment discussion or evidence preparation.
Keep the review separately from the official plan.
Worked fictional KRW 500 million example
KRW 150,000,000 total labor at 30%
A KRW 500,000,000 contract falls in the KRW 300-million to below-1-billion band.
Total labor of 150,000,000 × 30% gives a minimum of KRW 45,000,000.
Planned direct labor of 40,000,000 has a KRW 5,000,000 plan shortfall.
Verified actual labor of 30,000,000 leaves KRW 15,000,000 against the minimum and a KRW 10,000,000 gap against the plan.
The planned share of total labor is about 26.67%, while the actual share is 20%.
Attainment of the minimum is about 88.89% planned and 66.67% actual.
Do not add the plan shortfall and execution remaining to claim KRW 20,000,000 of additional cost.
During construction, first compare remaining directly performed work and the payment schedule.
Use during award, amendments and completion
Allocate direct and subcontracted work
After award, the plan shortfall helps review work to perform directly.
During construction, compare cumulative actual payments with the remaining direct-work schedule.
Nominal direct work or false payroll does not establish proper direct execution.
Review amendments and evidence
Recalculate with confirmed amended contract value and total labor.
Confirm the notice starting point and amendment method with the client.
Even a zero completion shortfall leaves actual work and evidence to be checked.
Rule Article 25-6 identifies payroll, material delivery, equipment use, social-insurance and income-tax records for the relevant public client’s direct-execution review.
That review must occur by completion.
Keep records that connect the site, work type, worker and payment period rather than retaining only one wage total.
Frequently asked questions
Must I directly pay 30% of the contract value?
No.
Contract value selects the rate band, while itemized total labor is the multiplication base.
For a KRW 500,000,000 contract with total labor of KRW 150,000,000, the minimum is KRW 45,000,000, rather than 30% of the whole contract.
What happens at exactly KRW 300 million or 7 billion?
KRW 300 million enters the 30% band.
Exactly KRW 7 billion is outside the below-7-billion threshold in Decree Article 30-2.
This does not remove conditions imposed by other provisions or by the contract.
Does a small project have no direct-execution duty?
The contract-below-KRW-40,000,000 AND duration-no-more-than-30-days condition concerns omission of plan notice.
It does not exempt the entire direct-execution obligation.
Satisfying only one condition does not qualify for this small-and-short notice exception.
Are all specialist contractors exempt from notice?
Act Article 28-2(2) distinguishes a contractor registered for professional construction undertaking professional work.
Confirm both the registration category and the actual work contracted.
This notice exception leaves the separate minimum direct-labor calculation in place.
Should written client approval make the minimum zero?
First confirm the scope and purpose of written approval or the patent/new-technology subcontracted portion.
This tool keeps the minimum pending when an exception needs review.
It neither infers a whole-contract exemption nor subtracts a selected portion from total labor.
Does a low cumulative actual amount establish a violation?
No.
During construction, compare the remaining directly performed work and payment schedule with the plan.
At completion, the client or authority still needs to assess evidence and performance.
A numerical shortfall is a review reference, not an established penalty.
What if the 30-day reference is a weekend or public holiday?
The displayed date is contract date + 30 calendar days, counting from the following day, before holiday adjustment.
Confirm the actual endpoint, submission method and receipt hours with the client and submit before the reference where possible.
A date after this reference does not itself establish legal lateness.
Does sending the saved TXT complete notice?
No.
The TXT is an input and arithmetic review.
It does not replace Rule Article 25-5 Form 22-6, itemized work costs or the planned schedule.
Use the recipient’s required submission method and keep the receipt and subsequent amendment records.
Official sources, effective dates and update scope
Verified on 2026-11-03, separately from the effective dates.
The National Law Information OPEN API returned these statutes as current, and the articles were retrieved directly.
Recheck rates, amounts and notice conditions after statutory or contractual changes.
- Framework Act on the Construction Industry, Article 28-2: MST273435, Act 21034, promulgated 2025-08-26, effective 2025-11-27.
Total-labor basis, specialist notice exception and possible contract termination.
- Enforcement Decree, Article 30-2: MST287349, Decree 36437, promulgated and effective 2026-06-23.
KRW 7 billion, 50/30/20/10%, 30 days, small-and-short omission and supervisor notice.
- Enforcement Rule, Article 25-5 and Article 25-6: MST282375, Ministry Rule 1553, promulgated 2025-12-30, effective 2026-01-02.
Official form, attachments and relevant public-client evidence review.
The tool covers contract and review dates in 2026, without reconstructing historical law or predicting future amendments.
Recheck labor classification, written exception scope, registration and work type, actual receipt and deadline, amendment starting dates and subcontracting legality.
It does not calculate sanctions, fines or damages, or guarantee compliance.
Prepare the cost breakdown and payroll
Enter confirmed contract value and total labor above, then compare the minimum with your direct-labor plan.
If notice applies, prepare itemized costs and a planned schedule and confirm the recipient and receipt hours.
Keep pending values unresolved until evidence is available, then recalculate and retain the review.