Ordinary Wage in Korea: Definition, Included Items & Calculation Guide 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) refers to wages paid to a worker on a regular and uniform basis as consideration for contractual work. Article 6 of the Enforcement Decree of the Labor Standards Act (근로기준법 시행령 제6조) defines ordinary wage as "an hourly, daily, weekly, monthly, or piece-rate amount set to be paid to a worker regularly and uniformly for prescribed work or total work performed."

Ordinary wage matters because it serves as the baseline for calculating various statutory allowances, including overtime, night-shift, and holiday work allowances (each with a 50% premium), annual leave allowances (연차수당), and severance pay (퇴직금). The higher the ordinary wage, the higher these allowances become.

Three Criteria for Determining Ordinary Wage

Under the current standard re-established by the Supreme Court en banc decisions of 19 December 2024 (2020다247190·2023다302838), whether a wage item qualifies as ordinary wage is determined by the following three requirements (the former framework was set by the 2013 en banc decision, 2012다89399·2012다94643):

1. Regularity (정기성): Paid continuously at fixed intervals.
2. Uniformity (일률성): Paid to all workers or to all workers who meet a certain condition.
3. Consideration for contractual work (소정근로의 대가성): paid in return for the work ordinarily provided during contractual hours (Supreme Court en banc, 19 Dec 2024, 2020다247190 — the "fixedness" requirement was abolished).

All three requirements must be satisfied for a wage item to be recognized as ordinary wage. In practice, fixed nature has most often been the key point of contention.

Note: In 2024, the Supreme Court en banc effectively abolished the existing "fixed nature" requirement, ruling that a wage item qualifies as ordinary wage if it is paid regularly and uniformly as consideration for prescribed work. As a result, periodic bonuses subject to a continued-employment condition may now also be included in ordinary wage. This ruling is being broadly applied in lower courts and workplace practice.

Items Included vs. Excluded from Ordinary Wage

✅ Included Items

• Base salary (기본급)
• Job-duty allowances and position allowances (직무수당·직책수당)
• Periodic bonuses paid regularly and uniformly (regardless of whether a continued-employment condition applies)
• Family allowances (가족수당) paid uniformly to all employees
• Meal and transportation allowances (식대·교통비) paid as a fixed amount to all employees

❌ Excluded Items

• Expense-reimbursement payments (실비변상적 급여) such as business-trip expenses and fuel costs for company vehicles
• Performance-based pay that varies according to work results
• One-time welfare payments (복리후생 목적의 일시적 지급금) such as congratulatory/condolence money and gifts
• Overtime allowances themselves (since they are calculated based on ordinary wage, they are excluded)

Note for foreign workers: Your employment contract may specify allowance amounts that differ from the statutory minimums; however, the statutory rules on what counts as ordinary wage apply regardless of contract terms.

How to Convert Ordinary Wage to an Hourly Rate

Calculating various allowances requires the hourly ordinary wage (시간급 통상임금). For monthly-salaried workers, the following formula applies:

Hourly ordinary wage = Monthly ordinary wage ÷ Monthly prescribed working hours

For a standard 40-hour workweek, the monthly prescribed working hours are typically 209 hours (including weekly holiday hours).

For example, if the monthly ordinary wage is KRW 3,000,000:

3,000,000 ÷ 209 hours ≈ KRW 14,354 (hourly rate)

The allowance for one hour of overtime work would then be KRW 14,354 × 1.5 = KRW 21,531.

Common Disputes in Practice

The most frequent dispute involves whether periodic bonuses are included in ordinary wage. If a company excluded bonuses from ordinary wage when calculating allowances, a worker may claim the shortfall retroactively. However, the statute of limitations is 3 years under Article 49 of the Labor Standards Act (근로기준법 제49조), so claims can be filed within 3 years even after leaving the job.

Calculate Your Entitlements on Workbear

Once you have a clear picture of your ordinary wage, you can immediately calculate how much severance pay you are owed. The Workbear Severance Pay Calculator lets you compare average wage and ordinary wage and estimate your expected severance pay all in one place. If you suspect a shortfall in allowances, try Workbear's AI Labor Law Search or Complaint Drafting Assistant as well.

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.