What Is Ordinary Wage in Korea? 2026 Calculation Guide for Foreign Workers

What Is Ordinary Wage?

Ordinary wage (통상임금) refers to the hourly, daily, weekly, monthly, or piece-rate amount that is set to be paid to a worker on a regular and uniform basis for contractually agreed work (Article 6 of the Enforcement Decree of the Labor Standards Act / 근로기준법 시행령 제6조). In simple terms, it is the "base wage received for work performed," and it serves as the standard for calculating various statutory allowances.

Why Does Ordinary Wage Matter?

Ordinary wage is not simply another term for base pay. All of the following items are calculated based on ordinary wage:

Because a lower ordinary wage reduces all of these allowances, it is the central issue in most wage disputes.

Items Included vs. Excluded from Ordinary Wage

Included items
- Base pay
- Fixed allowances such as position allowances, job allowances, and skill allowances
- Bonuses paid on a regular and uniform basis
- Meal allowances and transportation allowances paid as a fixed amount to all employees

Excluded items
- Performance-based incentives that vary by results
- Business expense reimbursements such as travel and work-related costs
- Allowances paid in proportion to the number of days worked (see Supreme Court ruling 2013da11226, etc.)
- Congratulatory/condolence payments and optional welfare points provided as employee benefits

What Changed with the 2024 Supreme Court Ruling

In December 2024, the Supreme Court en banc (2023da302838) effectively abolished the "fixedness" (고정성) requirement that had previously been the key criterion for determining ordinary wage. Under the old standard, wages that were only payable upon meeting certain conditions were excluded from ordinary wage on the grounds that they lacked fixedness. Now, regularity and uniformity alone are sufficient for ordinary wage recognition. As a result of this ruling, conditional bonuses tied to continued employment are now far more likely to be included in ordinary wage.

How to Calculate the Ordinary Wage Hourly Rate

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

Ordinary wage hourly rate = Total monthly ordinary wage ÷ Monthly contractual working hours

Based on a 40-hour workweek, the monthly contractual working hours are 209 hours (including weekly holiday hours). For example, if a worker receives a base salary of 2,500,000 won plus a fixed position allowance of 200,000 won, the ordinary wage hourly rate is (2,500,000 + 200,000) ÷ 209 = approximately 12,919 won.

For reference, the 2026 minimum wage is 10,320 won per hour (2,156,880 won per month), so if the ordinary wage hourly rate falls below this figure, it also constitutes a violation of the Minimum Wage Act.

Note: Your employment contract may specify allowances or bonus structures that differ from the statutory minimum. Always check your contract and pay slip against the standards above.

Common Disputes in Practice

The most frequent dispute arises when a company excludes bonuses or various allowances from ordinary wage when calculating overtime pay. Workers may claim the unpaid difference within the 3-year statute of limitations (Article 49 of the Labor Standards Act / 근로기준법 제49조), and unpaid wages that remain outstanding more than 14 days after resignation accrue delay interest at an annual rate of 20%.

If you want to verify whether your wage components are correctly reflected, try the salary take-home pay calculator at Workbear (workbear.kr). You can enter your allowances and deductions directly to calculate your actual take-home pay, and use the AI search feature to quickly check whether specific items qualify as ordinary wage in your situation.

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

Frequently Asked Questions

Are bonuses included in ordinary wage?

Bonuses paid on a regular and uniform basis are included in ordinary wage. The December 2024 Supreme Court en banc ruling 2023da302838 effectively abolished the 'fixedness' requirement, holding that ordinary wage status is recognized when only the requirements of regularity and uniformity are met. Accordingly, bonuses paid in a fixed amount to all employees every month or every quarter are highly likely to qualify as ordinary wage.

Are meal allowances and transportation allowances ordinary wage?

If meal allowances and transportation allowances are paid to all employees on a regular and uniform basis and are paid as a fixed amount regardless of work performance, they are included in ordinary wage. On the other hand, if they are paid on a reimbursement basis upon submission of receipts, or paid in proportion to the number of days worked, they may be excluded from ordinary wage.

What are the consequences of miscalculating ordinary wage?

If ordinary wage is calculated too low, overtime, night, and holiday allowances, annual leave allowances, and severance pay are all underpaid. The unpaid difference constitutes wage arrears, and the employer may be subject to imprisonment of up to 3 years or a fine of up to 30 million won under Article 109 of the Labor Standards Act 근로기준법 제109조 . In addition, unpaid wages that remain outstanding more than 14 days after resignation accrue delay interest at an annual rate of 20%.