Ordinary Wage in Korea: Complete Guide to Inclusions and Calculation for Foreign Workers
What Is Ordinary Wage (통상임금)?
Current standard (July 2026) — the Supreme Court en banc decision of 19 December 2024 (2020다247190, 2023다302838) abolished the "fixedness" requirement for ordinary wage. The test is now consideration for contractual work, regularity and uniformity, and regular bonuses carrying a continued-employment or minimum-workdays condition do qualify. Any "fixedness" discussion below reflects the former 2013 standard. The new standard applies, in principle, to ordinary-wage calculations made on or after the ruling date (19 December 2024).
Ordinary wage (통상임금) is defined under Article 6 of the Enforcement Decree of the Labor Standards Act (근로기준법 시행령 제6조) as "wages set to be paid to a worker regularly and uniformly as consideration for contractual work." The key point is that it refers to the pre-agreed amount, not the amount actually paid. Ordinary wage is important because it serves as the basis for calculating various statutory allowances — including overtime, night-work, and holiday-work allowances (each with a 50% premium), annual leave allowances (연차수당), and advance notice of dismissal allowances (해고예고수당) — so understanding it accurately is essential.
Note for foreign workers: Your employment contract may specify allowance amounts, but the statutory minimums based on ordinary wage cannot be waived.
Items Included in Ordinary Wage
The Supreme Court en banc decision of 19 December 2024 (2020다247190, 2023다302838), which abolished the former fixedness requirement, determines whether an item qualifies as ordinary wage based on three criteria: consideration for contractual work (소정근로 대가성), regularity (정기성), and uniformity (일률성).
- Base salary (기본급): Included in full as a matter of principle
- Job-duty allowances / position allowances (직무수당·직책수당): Included if paid regularly and uniformly according to job duty or position
- Technical allowances / qualification allowances (기술수당·자격수당): Included if paid simply for holding a qualification
- Meal allowances / transportation allowances (식대·교통비): Included if paid uniformly to all employees as a set amount
- Regular bonuses (정기상여금): Included when paid regularly and uniformly as consideration for contractual work — even with a continued-employment or minimum-workdays condition (Supreme Court en banc decisions of 19 December 2024 (2020다247190·2023다302838))
By contrast, performance-based pay that varies with results and business-trip expenses of a reimbursement nature are not consideration for contractual work and are therefore excluded from ordinary wage. Any guaranteed minimum portion is included (Supreme Court 2023다216777). (The fixedness requirement was abolished by the en banc decision of 19 December 2024, 2020다247190.)
How to Convert Ordinary Wage to an Hourly Rate
To calculate various statutory allowances, ordinary wage must be converted to an hourly rate.
Hourly ordinary wage = Monthly ordinary wage total ÷ Monthly scheduled working hours
For a standard 40-hour workweek, monthly scheduled working hours are typically 209 hours (40 hours × 52 weeks ÷ 12 months, including weekly holiday hours). If scheduled working hours differ, the figure must be recalculated accordingly.
Example
- Base salary ₩2,500,000 + Job-duty allowance ₩200,000 + Meal allowance ₩100,000 (paid uniformly to all employees)
- Monthly ordinary wage total: ₩2,800,000
- Hourly rate: ₩2,800,000 ÷ 209 ≈ ₩13,397
Applying the Hourly Rate to Statutory Allowance Calculations
Once the hourly ordinary wage is determined, each allowance is calculated as follows:
| Allowance Type | Formula |
|---|---|
| Overtime allowance (연장근로수당) | Hourly rate × 1.5 × overtime hours worked |
| Night-work allowance (야간근로수당) | Hourly rate × 0.5 × night hours worked |
| Holiday-work allowance (휴일근로수당) | Hourly rate × 1.5 (first 8 hours) or × 2.0 (beyond 8 hours) |
| Annual leave allowance (연차수당) | Hourly rate × daily scheduled working hours × unused annual leave days |
Common Mistakes in Practice
- Automatically excluding meal and transportation allowances: If these are paid on a fixed, uniform basis to all employees, they are included in ordinary wage.
- Automatically excluding bonuses: A bonus paid unconditionally to any employee who simply remains employed is subject to inclusion.
- Applying 209 hours to every workplace: If scheduled working hours differ, recalculation is mandatory.
- Confusing ordinary wage with average wage (평균임금): Severance pay (퇴직금) is calculated on the basis of average wage, while overtime allowances are calculated on the basis of ordinary wage.
Check It Instantly on Workbear
If your pay structure is complex or you are unsure whether a particular item is included in ordinary wage, try the Workbear salary take-home calculator at workbear.kr. Enter your various allowance items to see your take-home pay along with a detailed breakdown. You can also use the AI search feature to ask specific questions such as "Is my company's meal allowance included in ordinary wage?"
Related guides cover the same issue from other angles: see Ordinary Wage in Korea for the criteria, and How to Calculate Daily Ordinary Wage in Korea for calculation and examples.
This article is for informational purposes only and does not constitute legal advice. For specific cases, consult a certified labor attorney (노무사) or lawyer.