Ordinary wage and average wage serve different purposes in Korean labor law. Learn how each is calculated and used for allowances, severance and leave pay.
The two definitions
Ordinary wage is the regular and uniform consideration for scheduled work, assessed under the applicable case law. Average wage is generally the total wages paid during the three months before the reason for calculation arose, divided by calendar days in that period.
Where each is used
Ordinary wage is commonly the base for overtime, night and holiday premiums and unused annual-leave pay. Average wage is used for statutory severance pay and other specified benefits. If calculated average wage falls below ordinary wage, the Labor Standards Act may require ordinary wage to be used instead.
Reference calculations
For a standard 40-hour workweek, daily ordinary wage can be estimated as monthly ordinary wage ÷ 209 paid hours × 8 hours. Daily average wage is wages paid in the preceding three months ÷ calendar days in that period. The correct wage components and excluded periods matter.
The 2024 Supreme Court ruling
The cited Supreme Court ruling changed the analysis of “fixedness” in ordinary wage. Do not exclude a regular payment solely because it was conditional without checking the current legal test and effective treatment.
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Sources
- Korean Law Information Center · Source 1 (Korean) ↗
- Korean Law Information Center · Source 2 (Korean) ↗
- Korean Law Information Center · Source 3 (Korean) ↗
- Korean Law Information Center · Source 4 (Korean) ↗
- Korean Law Information Center · Source 5 (Korean) ↗
- Korean Law Information Center · Source 6 (Korean) ↗
- Korean Law Information Center · Source 7 (Korean) ↗
- Official source · Source 8 (Korean) ↗
- Korean Law Information Center · Source 9 (Korean) ↗
- Ministry of Employment and Labor · Source 10 (Korean) ↗