Average wage vs ordinary wage in Korean severance calculations
Learn why Korean severance calculations compare average wage with ordinary wage.
Average wage and ordinary wage serve different purposes under Korean labour law. Severance generally starts with average wage, but when the calculated daily average wage is lower than the applicable daily ordinary wage, the ordinary-wage amount may become the calculation baseline.
Average wage
Generally the wage total paid during the three months before the calculation event divided by the total calendar days in that period, subject to excluded periods and wage items.
Ordinary wage
Based on wages determined to be paid regularly and uniformly for prescribed work. The treatment of a specific allowance depends on its actual payment conditions.
Comparison for severance
MOEL states that when daily average wage is lower than daily ordinary wage, ordinary wage is used in the severance calculation.
Use pre-tax wage records
Use relevant gross wage data rather than net take-home pay.
If daily average wage is KRW 88,000 and verified daily ordinary wage is KRW 92,000, UCALX uses KRW 92,000 as the applicable daily wage. Calculating ordinary wage itself may require working-time and wage-item review.
What to check
- Prepare three months of payslips and the exact calendar-day count.
- Review the payment conditions of bonuses and allowances.
- Check periods excluded from average wage, including qualifying leave.
- Do not assume ordinary wage always equals monthly salary divided by 30.
Whether an allowance is part of average or ordinary wage is determined by substance rather than its label. Obtain professional review for a material or disputed calculation.
Official sources checked
Standards can change. These links are provided so you can verify the current primary source.
Korea Severance Pay Calculator
Apply the baseline above with your own dates and figures.