Last year, the total annual wage of regular employees in Korea exceeded an average of 50 million won for the first time.
This was driven by a significant increase in special bonuses, such as performance-based pay, which led overall wage growth.
According to the "2025 Analysis of Business Wage Increase Characteristics" report released by the Korea Employers Federation on March 22,
the average total annual wage for regular employees last year was 50.61 million won, a 2.9% increase compared to the previous year.
Regular employees include contract workers with contracts of one year or more, full-time employees, and those with permanent contracts.
The total annual wage is calculated by annualizing the sum of fixed wages and special bonuses, based on the monthly average.
The main factor contributing to wage growth was special bonuses.
The rate of increase in fixed wages was 2.7%, which is lower than the previous year's 3.2%,
but the growth rate of special bonuses jumped to 4.3%, a substantial increase from 0.4% the previous year.
In particular, performance-based bonuses surged at large companies with 300 or more employees.
Special bonuses at large companies rebounded from a 2.0% decrease in 2024
to a 5.8% increase last year, reaching an all-time high of 18.43 million won.
Accordingly, the annual wage increase rate at large companies also rose from 2.2% to 3.9%.
In contrast, the upward trend slowed at small and medium-sized enterprises (SMEs).
The annual wage increase rate at businesses with fewer than 300 employees was 2.5%, down from 3.0% the previous year.
This was due to the slowdown in the growth rates of both fixed wages and special bonuses, at 2.5% and 2.3%, respectively.
As a result, the wage gap widened once again.
The average annual wage at large companies was 73.96 million won, while at SMEs it was 45.38 million won.
When the large company wage is set at 100, the SME wage stands at just 61.4.
By industry, finance and insurance had the highest average annual wage at 93.87 million won,
while accommodation and food services had the lowest at 31.75 million won, resulting in a gap of 62.12 million won.
This was followed by electricity, gas, and steam supply (91.03 million won), professional, scientific, and technical services (68.73 million won), and information and communications (63.84 million won), in descending order of wage levels.
Over the long term, wage growth has significantly outpaced inflation.
Compared to 2011, the total annual wage last year increased by 58.9%, and the hourly wage rose by 77.7%,
which is about double and 2.6 times, respectively, the inflation rate of 29.8% during the same period.
Analysts say that, due to reduced working hours, the perceived increase in hourly wages was even greater.
The Korea Employers Federation noted that if productivity improvements do not keep pace with the shift toward a performance-based wage structure,
the burden on companies could increase.
Ha Sang-woo, Director of Economic Research, stated, "The total annual wage has exceeded 50 million won for the first time, and special bonuses have reached a record high,"
"To boost productivity, it is necessary to expand job- and performance-based wage systems and introduce more flexible working hours."
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Reporter Park Hosu lake@asiae.co.kr
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Edit Maeng Jiae mjiae@asiae.co.kr
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