Average Wage Calculator
Calculate average daily wage and estimated severance from last 3 months of pay.
Overview
The Average Wage Calculator computes the average daily wage as defined by Korea's Labor Standards Act. The average wage is a critical benchmark used to calculate severance pay, industrial accident compensation, suspension allowances, and other statutory payments. It divides the total wages (base salary, bonuses, annual leave pay, etc.) earned in the 3 months prior to the triggering event by the total calendar days in that period.
Formula
Daily Average Wage = (Total wages for 3 months before separation) ÷ (Total calendar days in that period) • 3-month total wages = Base salary (3 months) + Annual bonus × 3/12 + Annual leave pay × 3/12 • Severance pay = Daily average wage × 30 days × (Total service days ÷ 365) • Industrial accident leave pay = Daily average wage × 70% Example: Monthly base KRW 3M, annual bonus KRW 6M, annual leave pay KRW 500K 3-month wages = 9M + 1.5M + 125K = KRW 10,625,000 Daily average wage = 10,625,000 ÷ 92 days ≈ KRW 115,489
How to Use
- 1Enter the monthly base salary and fixed allowances for the 3 months before separation.
- 2Enter the total annual bonus and unused annual leave pay.
- 3Enter the length of service (start date to end date).
- 4Click 'Calculate' to see the daily average wage and estimated severance pay.
Tips
- ✔The average wage is based on the 3 months immediately before the triggering event, so wages in that period are crucial.
- ✔If the ordinary wage exceeds the average wage, the ordinary wage applies instead — check both figures.
- ✔Only regularly and uniformly paid bonuses are included. Divide the annual total by 12, then multiply by 3 for the 3-month portion.
- ✔Beyond severance pay, industrial accident leave pay and dismissal notice pay are also based on the average wage.
FAQ
Q. What is the difference between average wage and ordinary wage?
Average wage is the actual total wages paid over the last 3 months divided by the calendar days in that period, including variable components like overtime and performance pay. Ordinary wage is the fixed, regular, and uniform hourly/daily/monthly rate. Severance is calculated on average wage, but if ordinary wage is higher, ordinary wage applies.
Q. How is severance pay calculated using the average wage?
Severance pay = Daily average wage × 30 days × (Total service days ÷ 365). For example, with a daily average wage of KRW 110,000 and 5 years of service: 110,000 × 30 × (1,826 ÷ 365) ≈ KRW 16,500,000.
Q. Are bonuses included in the average wage?
Regularly and uniformly paid bonuses are included. The 3-month portion (annual total × 3/12) is added to the 3-month wage total. However, irregular performance-based incentives tied to business results are excluded.
Q. How are the total calendar days for the 3-month period calculated?
Count the calendar days in the 3 months immediately before the triggering event. For example, if the separation date is March 31, the period is January 1 to March 31, totaling 90 days (31+28+31). In a leap year, it would be 91 days.
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