SME Women's Monthly Wage Only 37.2% of Large Corporation Men's... "Need to Strengthen Performance-Based Compensation"

Wage Gap Between Large Corporations and SMEs Widens Over Five Years
Driven by Differences in Performance-Based and Special Bonuses
SMEs Need to Expand Capacity for Performance-Based Compensation and Pay

The total monthly wage of women working at small and medium-sized enterprises (SMEs) was found to be only 37.2% of that of men working at large corporations. For men working at SMEs, the figure was 55.4% of their large corporation male counterparts. The wage gap between large corporations and SMEs is mainly due to special bonuses, highlighting the need to strengthen the institutional foundation for performance-based compensation.

On June 8, the Korea Small Business Institute reported in its analysis of the "Wage Gap Between Large Corporations and SMEs" that wage levels are highest in the order of large corporation men, large corporation women, SME men, and SME women. The report also noted that the wage gap between large corporations and SMEs has widened compared to 2021.

Total Wage Share Compared to Large Company Males. Korea SMEs and Startups Agency

As of last year, the monthly total wage for women at SMEs was 2,645,000 won, which is only 37.2% of the 7,110,000 won earned by men at large corporations. The hourly wage for women at SMEs was 19,251 won, just 43.4% of the 44,315 won earned by men at large corporations.

For men working at SMEs, the monthly total wage was 3,939,000 won, which is 55.4% of the 7,110,000 won received by men at large corporations. This amount was 1,294,000 won higher than that of women at SMEs (2,645,000 won), but 1,031,000 won lower than that of women at large corporations (4,970,000 won).

The smaller the workforce size at an SME, the greater the wage gap compared to large corporations. The average monthly total wage at SMEs was 3,362,000 won, which is 53.2% of the 6,323,000 won at large corporations. By workforce size: medium-sized companies with 30–299 employees paid 4,032,000 won, which is 63.8% of large corporations; small companies with 5–29 employees paid 3,401,000 won, or 53.8% of large corporations; and micro-businesses with fewer than 5 employees paid 2,391,000 won, just 37.8% of large corporations.

Trends in salary distribution by category compared to large corporations. Korea SMEs and Startups Agency

The wage gap between large corporations and SMEs widens further due to special bonuses. The average monthly special bonus at SMEs last year was 208,000 won, only 17.4% of the 1,195,000 won at large corporations. Fixed wages, meaning base salary and allowances, fell from 65.7% of large corporations in 2022 to 64.5% last year, a decrease of 1.2 percentage points. Overtime and other extra pay decreased from 36.6% to 32.6%, a drop of 4.0 percentage points compared to large corporations.

The wage gap by years of service was also larger at large corporations. At SMEs, the monthly total wage for employees with 3–5 years of service (3,334,000 won) was 103,000 won less than that of large corporation employees with less than 1 year of service (3,447,000 won). For those with less than 1 year of service, SME employees with over 20 years of service earned 3.01 times more, while at large corporations it was 4.26 times higher.

In the past five years, the wage gap for employees with less than five years of service between large corporations and SMEs has also widened. SME employees with less than 1 year of service earned 67.6% of their large corporation counterparts in 2020, but this dropped to 63.8% in 2025, a decrease of 3.8 percentage points. The annual average wage increase rate for SME employees with less than 1 year of service was only 2.9%, 1.3 percentage points lower than the 4.2% at large corporations and 0.2 percentage points lower than the annual average minimum wage increase rate (3.1%) for the same period. For those with 1–3 years of service, the ratio dropped from 63.2% to 62.2%, a decrease of 1.0 percentage point. For those with 3–5 years of service, the ratio dropped from 61.7% to 59.7%, a decrease of 2.0 percentage points compared to large corporations.

For SME employees with 15–20 years of service, the average monthly special bonus was 587,000 won, which was even lower than the 637,000 won received by large corporation employees with just 1–3 years of service. The gap in average monthly special bonuses for SME employees with less than 5 years of service has also widened further over the past five years. Looking at the ratio of special bonuses by years of service at SMEs compared to large corporations: for those with less than 1 year, the ratio dropped from 19.2% in 2020 to 15.8% in 2025; for those with 1–3 years, from 19.2% to 16.6%; and for those with 3–5 years, from 21.4% to 18.3%.

The Korea Small Business Institute pointed out that the wage gap between large corporations and SMEs stems from excessive differences in special bonuses such as performance-based pay and bonuses, stating, "It is necessary to expand the institutional foundation for performance-based compensation at SMEs and to enhance payment capacity through innovation in work methods on the ground."

No Minseon, a research fellow at the Korea Small Business Institute, explained, "Measures should be pursued such as the realization of the budget for projects supporting the spread of performance sharing between SMEs and workers, the expansion of performance-based compensation for key personnel at SMEs, strengthening practical AI skills and establishing on-site diffusion systems for SME employees, improving the treatment of non-regular and female SME employees, and revitalizing the win-win-type Naeil Chaeum Mutual Aid between large corporations and SMEs."

This content was produced with the assistance of AI translation services.