Market Update: Pay milestone in Korea masks underlying divide – Full Analysis

 

Korean workers, on average, are now earning more than 50 million won ($33,000) a year — a milestone reached not through steady raises, but through a surge in bonuses that has widened the pay gap between big business and everyone else.

 

The average total annual wage for regular employees with contracts of at least one year reached 50.61 million won in 2025, up 2.94 percent from 49.16 million won a year earlier, according to a report released Sunday by the Korea Enterprises Federation. The figure, which includes full-time and permanent contract workers, marks the first time the average has crossed the 50 million won threshold since the data series began in 2011.

 


The increase came as growth in base pay slowed but bonuses rose sharply. Fixed wages, including salaries, grew 2.7 percent, down from a 3.2 percent rise the previous year. At the same time, bonuses and other irregular payments climbed 4.3 percent, up from just 0.4 percent a year earlier.

 

The divergence was more pronounced depending on company size.

 

At companies with 300 or more employees, bonuses rose 5.8 percent, helping lift average annual wages to 73.96 million won, a 3.9 percent increase from a year earlier. At smaller firms, with fewer than 300 employees, average wages reached 45.38 million won, up 2.5 percent.

 

Smaller companies also saw weaker gains across both pay categories. Growth in fixed wages slowed to 2.5 percent from 3.1 percent, while increases in bonuses edged down to 2.3 percent from 2.6 percent. The gap in bonus payments remained wide: Workers at smaller firms received an average of 4.18 million won, less than a quarter of the 18.43 million won paid by large corporations.

 

Pedestrians walk across a crosswalk at an intersection near Gwanghwamun Square in Jongno District, central Seoul, on Feb. 19. [NEWS1]

 

The differences extended across industries. Workers in finance and insurance earned the highest average annual wages at 93.87 million won, while those in accommodation and food services earned the least, at 31.75 million won.

 

For companies, rising pay has coincided with a steady decline in working hours, adding to pressure on labor costs.

 

Average hourly wages rose 77.7 percent from 15,483 won in 2011 to 27,518 won last year, outpacing the 58.9 percent cumulative increase in annual wages over the same period, according to the report.

 

Measures that focus on annual pay alone may understate the cost burden on employers, as they do not fully capture the effects of shorter working hours, the report said.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.

BY YI WOO-LIM [[email protected]]