Ordinary Wage in Korea: Complete Guide to Scope, Calculation & Practical Pitfalls for Foreign Workers

What Is Ordinary Wage (통상임금)?

Ordinary wage (통상임금) refers to wages paid to a worker on a regular, uniform, and fixed basis. Article 6 of the Enforcement Decree of the Labor Standards Act (근로기준법 시행령 제6조) defines it as "the hourly, daily, weekly, monthly, or piece-rate amount agreed to be paid to a worker for prescribed work or total work performed."

Ordinary wage matters because it serves as the calculation base for various statutory allowances, including overtime, night-shift, and holiday work allowances (each with a 50% premium), advance notice pay for dismissal (해고예고수당), and unused annual-leave allowances (연차미사용수당). If ordinary wage is calculated too low, workers receive less than they are legally entitled to; if calculated too high, the employer's labor cost burden increases.

Note for foreign workers: Your employment contract may specify allowance amounts, but statutory minimums based on ordinary wage always apply — contractual terms cannot fall below the legal floor.

Criteria for Determining What Counts as Ordinary Wage

The Supreme Court's 2024 en banc ruling (2020다247190) abolished the existing "fixed nature (고정성)" requirement and changed the legal standard so that ordinary wage status is now determined by only two criteria: regularity (정기성) and uniformity (일률성).

Regularity (정기성): Wages paid continuously at fixed intervals.
Uniformity (일률성): Wages paid equally to all workers, or equally to all workers who meet a certain condition.

Under this standard, the following are included in ordinary wage: base pay (기본급), position allowances (직책수당), job-duty allowances (직무수당), qualification allowances (자격수당), seniority allowances (근속수당), meal allowances (식대) when paid as a fixed amount, and commuting allowances (교통비) when paid as a fixed amount.

The following may be excluded: expense-reimbursement payments covering actual costs incurred (e.g., business-trip expenses, actual-cost meal reimbursements), performance bonuses that vary with individual results, and special bonuses tied to business performance. However, if a performance bonus guarantees a minimum payment regardless of results, that guaranteed minimum amount may still be included in ordinary wage.

How to Convert Ordinary Wage to an Hourly Rate

For monthly-salaried workers, the hourly ordinary wage is calculated using the following formula:

Hourly Ordinary Wage = Monthly Ordinary Wage ÷ Monthly Prescribed Working Hours

For a standard 40-hour workweek, monthly prescribed working hours are typically 209 hours (40 hours/week + 8 weekly holiday hours × 4.345 weeks). This figure may differ if your contracted working hours or weekly holiday allowance (주휴수당) arrangement differs — always check your actual employment contract.

Example: If your total monthly ordinary wage is KRW 3,000,000, your hourly ordinary wage is approximately KRW 14,354 (3,000,000 ÷ 209). The allowance for one hour of overtime work would then be 1.5 times that amount, approximately KRW 21,531.

Common Disputes in Practice

Whether bonuses count as ordinary wage: Bonuses paid quarterly, semi-annually, or annually also qualify as ordinary wage if they meet the regularity and uniformity criteria. A longer payment cycle does not automatically disqualify a bonus from meeting the regularity requirement.
Meal and commuting allowances: If paid to all employees at the same fixed amount, they are included in ordinary wage. If reimbursed based on actual expenses, they are excluded.
Errors in calculating monthly prescribed working hours: A miscalculation of monthly prescribed working hours throws off every statutory allowance. Always cross-check your employment rules (취업규칙) and employment contract against your actual working pattern.

Calculate Quickly with Bylaw (바이로)

If ordinary wage calculation feels complicated, try the Bylaw (바이로) take-home pay calculator at workbylaw.com. Enter your various allowance items to instantly see your take-home pay alongside allowance amounts calculated on the basis of ordinary wage. You can also use the AI search feature to ask immediately whether specific items in your situation are included in ordinary wage.

This article is for informational purposes only and does not constitute legal advice. For specific cases, consult a certified labor attorney (노무사) or lawyer.