Supreme Court rules Samsung should count bonus in calculating severance pay

SEOUL, Jan. 29 (Yonhap) -- The Supreme Court ruled Thursday that Samsung Electronics Co. should count bonuses as part of an employee's average wage when using it as the basis to calculate severance pay.

The ruling came almost seven years after 15 former Samsung employees sued the company, claiming it had paid them severance pay based on an average wage that excluded various bonuses they received for their performance.

The plaintiffs demanded the company pay them the remainder of their severance pay based on an average wage that included the bonuses.

The Supreme Court ruled that the "target incentives" -- a bonus paid to employees based on the performance of each project and department they belong to -- should count as pay for work, given the function, purpose and details of the assessment criteria for their payment.

However, on the "performance incentives," which are shared with employees using 20 percent of profit generated by each department, the court ruled that it had no direct correlation to the provision of labor.

With the ruling, the court sent back the case to the Suwon High Court for a retrial.

A flag bearing the logo of Samsung Electronics Co. flies outside the company's headquarters in southern Seoul on Jan. 29, 2026. (Yonhap)