Ordinary Wage in Korea: Complete Calculator Guide 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 ordinary wage as "the hourly, daily, weekly, monthly, or piece-rate amount agreed to be paid for prescribed work or total work performed." In short, the defining characteristic of ordinary wage is that it is predetermined and paid regardless of whether specific work was actually performed.
Ordinary wage matters because it serves as the calculation base for various statutory allowances: overtime allowance (연장근로수당, ×1.5), night-work allowance (야간근로수당, ×0.5), holiday-work allowance (휴일근로수당, ×1.5–2.0), and annual leave allowance (연차수당). If ordinary wage is set too low, all of these allowances are reduced accordingly — directly affecting the worker's take-home pay.
Items Included in Ordinary Wage
The Supreme Court's en banc decision of 2013 (2012다89399) clarified three criteria for determining ordinary wage: regularity (정기성), uniformity (일률성), and fixedness (고정성).
Items typically included (examples)
- Base salary (기본급)
- Position allowance (직책수당), job-duty allowance (직무수당)
- Qualification allowance (자격수당), license allowance (면허수당)
- Meal allowance (식대) and commuting allowance (교통비) paid as a fixed monthly amount
- Regular bonuses (정기상여금) paid at set intervals without conditions
Items typically excluded (examples)
- Business-trip expenses and operational activity costs reimbursed as actual expenses
- Performance bonuses that vary based on work results
- Holiday bonuses (명절 상여금) conditioned on being employed at a specific point in time
- Condolence money and other welfare-purpose payments
In particular, regular bonuses that carry an "employment-at-time-of-payment" condition are considered to lack fixedness and may therefore be excluded from ordinary wage. Conversely, bonuses paid every quarter without conditions are included.
Note for foreign workers: Your employment contract or work rules (취업규칙) may specify different allowance structures. Always check whether your contractual terms meet or exceed these statutory standards.
How to Convert Ordinary Wage to an Hourly Rate
The figure actually used to calculate allowances is the hourly ordinary wage (시간급 통상임금). For monthly-salaried workers, the formula is:
Hourly Ordinary Wage = Total 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). If your prescribed working hours differ, use your actual hours.
Example
- Base salary KRW 2,500,000 + position allowance KRW 200,000 + fixed meal allowance KRW 100,000 = monthly ordinary wage KRW 2,800,000
- Hourly ordinary wage = 2,800,000 ÷ 209 = approx. KRW 13,397
- Overtime allowance for 1 hour = 13,397 × 1.5 = approx. KRW 20,096
Common Mistakes and Points to Watch
- Treating only base salary as ordinary wage: All allowances paid on a fixed basis must be included.
- Miscalculating prescribed working hours: 209 hours applies to workplaces with a 40-hour week. Part-time workers and those on alternating-week schedules must calculate their hours separately.
- Failing to check whether bonuses are included: Always review the payment conditions stated in your employment rules and employment contract.
Calculate Yours Instantly with Bylaw (바이로)
The key to calculating ordinary wage is correctly classifying each pay item and identifying your prescribed working hours. The Bylaw (바이로, workbylaw.com) annual salary take-home calculator lets you enter your base salary and various allowances to see your after-tax net pay in one step. You can also use the AI search feature to look up specific cases — such as "does my allowance count as ordinary wage?" — right away.
This article is for informational purposes only and does not constitute legal advice. For specific cases, consult a certified labor attorney (노무사) or lawyer.