Check both monetary conditions before signing
This Korea-based subcontract price calculator checks the 82% and 64% review thresholds using Korean construction rules applicable in 2026.
It helps small main contractors and subcontractors reconcile a proposed price before negotiation or signing.
The original-contract amount attributable to the subcontracted portion can differ from the client’s estimate for that portion, so a single subcontract ratio is insufficient.
Use the portion actually being subcontracted, with matching quantities, current contract terms and tax treatment.
A change in who supplies materials or pays guarantee fees can change the comparison base even when the headline price appears unchanged.
The deduction ledger and downloadable TXT check sheet preserve those assumptions for discussion with the client.
Results identify questions and evidence to resolve; they do not set a market rate or determine the final review outcome.
82% and 64% use different denominators
82% of the original-contract portion
Start with the relevant quantities at original-contract unit prices, including direct and indirect labor, materials and expenses.
Include general overhead, profit and VAT, then remove the specified main-contractor costs.
Compare the subcontract price with 82% of this net base.
64% of the client estimate
Obtain the client’s estimate for the same subcontracted portion and calculate 64% separately.
The whole-project estimate, main-contract award price and subcontractor’s own cost estimate cannot automatically replace it.
Decree Article 34(1) uses either condition.
An 82% result without a breach can coexist with a 64% breach.
Both do not need to be below their thresholds simultaneously.
Separate shortfalls show which comparison needs further evidence or a pricing discussion.
Match scope, unit prices and VAT before entering amounts
Extract only the subcontracted work
Use the original itemized schedule for the work and quantities actually being subcontracted.
Enter direct labor, indirect labor, materials and expenses separately.
Including another trade or work retained by the main contractor inflates the denominator.
For design or quantity amendments, use the breakdown corresponding to the current contract.
Avoid double-counting overhead, profit and VAT
Enter verified general overhead, profit and VAT amounts.
The calculator does not infer a tax rate or automatically calculate VAT.
If a unit price already includes tax or profit, separate the underlying amounts before adding the same category again.
Confirm that the subcontract price and client estimate are comparable on the same tax and work-scope basis.
Keep a traceable deduction ledger
The 82% base excludes materials supplied directly by the main contractor and statutory main-contractor payment-guarantee issuance costs, among other qualifying statutory obligations.
During negotiations, material-supply responsibilities may change or a fee may have been placed in the wrong party’s cost schedule.
Separate supplied materials, guarantee issuance fees and other verified statutory main-contractor costs before making the comparison.
- Deduct an amount only if it is already included in the gross breakdown.
An amount omitted from gross must not be deducted again.
- Other deductions require a verified statutory main-contractor obligation.
A convenient contractual allocation or an unsupported estimate is insufficient.
- Do not enter the same fee under both guarantee fees and other costs.
Deductions equal to or greater than gross are rejected when the full breakdown is known.
- Reconcile the VAT treatment and scope of each deduction with the original breakdown.
These deductions are not automatically applied to the 64% client-estimate base.
Formulas and whole-KRW boundaries
Gross S = direct labor + indirect labor + materials + expenses + general overhead + profit + VAT
Deductions D = supplied materials + statutory main-contractor guarantee fees + other verified statutory costs
82% base B82 = S − D
T82 = B82 × 82% / T64 = estimate for the portion × 64%
Whole-KRW boundary C = ceil(T) / shortfall = max(0, C − subcontract price)
Actual subcontract ratio = subcontract price ÷ each comparison base × 100
A threshold may contain a fractional won and is not rounded before comparison.
For a KRW 101 base, 82% is KRW 82.82; the whole-KRW contract boundary is therefore KRW 83.
This ceiling describes a whole-KRW comparison and does not invent a statutory rounding rule.
The larger of the two whole-KRW boundaries meets both monetary comparisons, but is not a minimum fair price or a recommended quote.
Step-by-step use
- Confirm construction scope under the Act and classify the client as national government, local government, a covered public entity or private.
Leave unclear legal classifications unconfirmed.
- Extract the relevant original-contract portion and collect deduction evidence.
Leave unknown amounts blank; enter zero only for a verified absent cost.
- Enter the client estimate for the same portion and the actual or proposed subcontract price.
Confirm matching scope, VAT and deduction evidence before running the check.
- Read each threshold, signed difference, whole-KRW shortfall and the combined guidance.
Changing an input clears the previous result, so run the calculation again.
- Save the TXT sheet and take the original breakdown and estimate evidence to the client.
Confirm review requirements and prepare the actual self-assessment and execution-capability evidence, or discuss pricing and responsibilities.
Worked example: a KRW 63 million subcontract
A fictional breakdown contains direct labor 25,000,000, indirect labor 5,000,000, materials 30,000,000, expenses 10,000,000, general overhead 5,000,000, profit 5,000,000 and VAT 8,000,000, all in KRW.
Gross is 88,000,000.
Deduct supplied materials of 10,000,000 and guarantee fees of 1,000,000 to obtain an 82% base of 77,000,000.
Assume a client estimate of 100,000,000 and subcontract price of 63,000,000.
Two monetary checks for a fictional Korean subcontract, KRW| Comparison | Base | Threshold | Shortfall |
|---|
| Original-contract 82% | 77,000,000 | 63,140,000 | 140,000 |
| Client estimate 64% | 100,000,000 | 64,000,000 | 1,000,000 |
Both thresholds are breached.
At 63,140,000, the 82% comparison is exactly met, but the 64% comparison is still breached.
At 64,000,000, neither price threshold is breached; capability and contract-content review remain separate questions.
These fictional figures are not market prices or a quote recommendation.
Use the example button to reproduce them.
Public and private clients receive different guidance
Government and covered public entities
Act Article 31(2) requires review when a relevant ground exists.
Decree Article 34(2) lists public corporations, quasi-governmental institutions, local public corporations and local public agencies.
When scope and relevant evidence are confirmed, the result identifies the mandatory-review trigger.
Private clients
Act Article 31(1) allows review when a relevant ground exists.
The tool does not label a private contract automatically unlawful or void because a price is below a threshold.
Ask the client about review and supporting evidence.
A client’s substantive finding about capability or contract suitability is a separate stage.
The calculator does not assess personnel, equipment, experience or reliability.
A user-confirmed ground of manifest inability to execute can trigger review independently of price.
Unknown values, errors and boundary cases
Unknown does not mean zero
An unknown deduction is different from a verified absent cost.
Missing inputs leave the affected base pending.
A confirmed breach of the other comparison may still appear, but the check remains incomplete.
Selecting evidence confirmed does not fill blank amounts.
A zero client estimate, negative values, fractional-KRW inputs and individual amounts above KRW 1 trillion are rejected.
With a fully known original breakdown, deductions must be lower than gross.
A rounded displayed ratio may appear equal to 82% even when a small shortfall exists; the monetary decision retains that breach.
If the entered scope is outside the Act, displayed arithmetic is not an applicability determination.
Use the output for negotiation and evidence preparation
Reconcile the quote before signing
If parties assumed different quantities or material-supply responsibilities, reconcile the corresponding breakdown and deductions first.
A difference from the threshold is not an automatic price-cut entitlement.
Review actual labor, materials and quality-assurance costs together with the proposed price.
Ask the client about the actual review
Prepare the contract and special conditions, itemized breakdown, schedule and applicable guarantee or exemption evidence under Rule Article 26.
Notice Article 5 allows requests for a self-assessment and supporting factual documents.
Actual review includes pricing, execution capability, reliability and project conditions; the arithmetic here covers only the monetary comparisons.
Under Decree Article 34(3), a written change request is due within 30 days of receipt of the subcontract notice or learning of the ground.
This is not automatically a period measured from contract signing.
Confirm receipt and knowledge evidence and the actual request; this tool does not calculate legal deadlines.
Payment guarantee amounts and unpaid-price interest belong to separate calculators.
Frequently asked questions
Is meeting either 82% or 64% sufficient?
No.
Either breach can trigger the monetary condition under Decree Article 34(1).
The denominators differ, so calculate both.
Meeting one does not remove a breach of the other.
Does exact equality count as a breach?
No.
The statute uses below, so exact equality does not breach that individual threshold.
A displayed rounded ratio can conceal a small monetary shortfall.
Check the other threshold and capability grounds separately.
Where do supplied materials and guarantee fees belong?
Remove verified main-contractor supplied materials and statutory main-contractor payment-guarantee issuance costs from the 82% base, only if already included in gross.
Do not deduct them twice or automatically subtract them from the client estimate.
Can the total original contract replace an unknown estimate?
No.
Obtain the client estimate for the same subcontracted portion.
Leave it blank when unconfirmed.
A known 82% breach can still be shown, but both monetary checks have not been completed.
Does every institution with a public name require mandatory review?
This calculator distinguishes public corporations, quasi-governmental institutions, local public corporations and local public agencies under Decree Article 34(2).
National and local government clients also follow Act Article 31(2).
Leave other classifications unconfirmed until verified.
Do both thresholds guarantee a fair price or exemption?
No.
These are monetary triggers only.
Manifest inability to execute, reliability, work conditions and contract terms can require separate examination.
Do not use the boundary to demand unilateral price cuts or fabricate contract amounts.
Does the 30-day period start on contract signing?
No.
Decree Article 34(3) concerns a written change request within 30 days after receipt of the subcontract notice or learning of the relevant ground.
Signing is not automatically that starting event.
This calculator does not determine dates or legal lateness.
Is the TXT sheet a complete official submission?
No.
It shares inputs, deductions and arithmetic.
Prepare the actual forms, contract and special terms, itemized breakdown, schedule, applicable guarantee or exemption evidence, and self-assessment supporting documents as required by the client.
Official sources and effective dates
Verified directly against the National Law Information OPEN API on 2026-11-06.
Framework Act on the Construction Industry, Article 31: MST273435, effective 2025-11-27.
Enforcement Decree Article 34: MST287349, effective 2026-06-23.
Enforcement Rule Article 26: MST282375, effective 2026-01-02.
Construction Subcontract Review Standards: MOLIT Notice 2020-817, identifier 2100000194600, effective 2020-11-16.
Verification dates differ from effective dates.
Recheck amendments, actual contract scope, tax and deduction evidence, institutional classification and client review requirements.
Start the discussion with a reconciled breakdown
Enter the same subcontracted portion’s original breakdown and client estimate, then compare both shortfalls.
Save the TXT check sheet, retain deduction evidence and ask the client which review documents are needed.
Negotiate contract terms using actual costs and execution plans.
Do not invent deductions or split the work artificially to avoid monetary thresholds.