Ordinary Wage in Korea Explained: 2024 Supreme Court Ruling & 2026 Calculation Guide for Foreign Workers
What Is Ordinary Wage?
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 the base figure used to calculate overtime, night-shift, and holiday premium pay, annual leave allowances, and severance pay (퇴직금). 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 contracted work or total work performed."
Because higher ordinary wage raises all related allowances and severance pay, which items are included is critically important to both workers and employers.
Key Points of the Supreme Court en Banc Ruling
The current three criteria for determining whether an item qualifies as ordinary wage were re-established by the Supreme Court en banc decisions of 19 December 2024 (2020다247190·2023다302838); the framework that formerly applied — including the now-abolished fixedness requirement — had been set by the 2013 en banc ruling (2012다89399·2012다94643):
- Regularity (정기성): Paid continuously at fixed intervals.
- Uniformity (일률성): Paid to all workers, or to all workers who meet a specified condition.
- 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).
The "fixed nature" requirement was the central issue in that ruling. Under the former standard, regular bonuses (정기상여금) paid only to workers who remained employed at the time of payment were deemed to lack fixed nature and were therefore excluded from ordinary wage. The en banc decision of 19 December 2024 (2020다247190) abolished the fixedness requirement, and such bonuses now qualify as ordinary wage.
What Changed with the 2024 en Banc Ruling
In its December 2024 en banc ruling (2020다247190), the Supreme Court overturned the prior precedent and abolished the "fixed nature" requirement. Now, an item qualifies as ordinary wage if it is paid as consideration for contractual work with regularity and uniformity — three requirements in all.
As a result, regular bonuses subject to a continued-employment condition can now be included in ordinary wage. Even bonuses paid quarterly or semi-annually are treated as ordinary wage if they are paid on a fixed schedule and uniformly to all current employees.
Inclusion of Specific Pay Items
| Item | Included? | Notes |
|---|---|---|
| Base salary | ✅ Yes | Included as a matter of principle |
| Regular bonus | ✅ Yes | After abolition of the fixed-nature requirement |
| Position/job allowance | ✅ Yes | When paid uniformly |
| Fixed meal allowance | ✅ Yes | When paid uniformly to all employees |
| Fixed commuting allowance | ✅ Yes | When paid uniformly to all employees |
| Performance bonus (KPI-linked) | ❌ No | Varies with individual results |
| Expense-reimbursement allowances | ❌ No | Welfare/benefit in nature |
Note for foreign workers: Your employment contract or collective agreement may specify different conditions. Always compare contractual terms against these statutory standards.
How to Calculate the Hourly Ordinary Wage
For monthly-salaried workers, the hourly ordinary wage is calculated as follows:
Hourly ordinary wage = Total monthly ordinary wage ÷ Monthly ordinary wage base hours
The monthly base hours are generally calculated as 40 hours of scheduled work + 8 hours of weekly holiday = 48 hours per week, multiplied by the average number of weeks per month (4.345 weeks), giving approximately 209 hours.
For example, if a worker receives a monthly base salary of KRW 2,500,000, a fixed meal allowance of KRW 200,000, and a regular bonus converted to a monthly figure of KRW 300,000, the hourly ordinary wage is (2,500,000 + 200,000 + 300,000) ÷ 209 ≒ KRW 14,354.
Practical Points to Watch
- Review employment rules and collective agreements: Even if a bonus clause states "payable only to current employees," that bonus may now be included in ordinary wage. The entire wage structure should be re-examined.
- Possibility of retroactive claims: If ordinary wage was understated and overtime allowances were underpaid as a result, workers may claim the wage difference for up to 3 years under Article 49 of the Labor Standards Act (근로기준법 제49조).
- Narrowed scope of the good-faith defense: The employer's good-faith (신의칙) defense, which courts previously recognized, has been significantly restricted following the 2024 ruling.
Check Your Pay Quickly with Workbear
If you want to see how the ordinary wage changes affect your net annual salary or severance pay, try the Workbear net salary calculator at workbear.kr. Enter each allowance item to instantly see your after-tax take-home pay. If you suspect the allowance structure in your pay slip or employment contract may not be lawful, you can also use the AI contract review feature for a quick check.
Related guides cover the same issue from other angles: see Ordinary Wage in Korea for the criteria, and 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.