Annual total wages for regular workers in South Korea exceeded 50 million won ($35,700) last year, but significant disparities between large and small businesses are fueling concerns about a deepening "K-shaped polarization" in the labor market.
The Korea Employers Federation (KEF) released a report titled "Analysis of 2025 Business Wage Increase Characteristics" on Thursday containing these findings. According to the report, annual total wages (excluding overtime pay) reached 50.61 million won last year, up 2.94% from the previous year.
The growth rate for regular pay slowed to 2.7% from 3.2% the year before. However, special bonuses surged 4.3%, compared to just 0.4% the previous year, pushing overall wage growth slightly higher than the prior year's 2.85%.
Companies with 300 or more employees saw total wages rise 3.9% to 73.96 million won. Special bonuses at these firms hit record highs, jumping 5.8% after declining 2.0% the previous year.
In contrast, businesses with fewer than 300 workers recorded wage growth of just 2.5%, down from 3.0% the year before. As a result, the wage level at smaller firms relative to larger companies fell to 61.4% last year, reversing two consecutive years of gains (61.5% in 2022, 61.7% in 2023, 62.2% in 2024).
By industry, finance and insurance topped the list with annual wages of 93.87 million won, while accommodation and food services ranked lowest at 31.75 million won—a gap of 62.12 million won. Finance and insurance also posted the highest year-on-year wage growth at 5.9%, while mining recorded the lowest at 0.1%.
"Last year marked the first time regular workers' total wages exceeded 50 million won, with special bonuses reaching an all-time high," said Ha Sang-woo, head of KEF's Economic Research Division. "We must now boost productivity through job- and performance-based pay systems and flexible working hours to address social challenges such as continued employment for older workers and reduced working hours without adverse effects."