How is severance pay calculated in China?

One month’s average wage per year of service (N). Service of 6 months to a year counts as one year; under 6 months counts as half a month. If your average monthly wage exceeds 3× the local average wage, the base is capped at that 3× figure and years are capped at 12. Unlawful termination pays double (2N); a non-fault dismissal without 30 days’ notice adds one month (N+1).

N is the base severance. N+1 adds one month’s pay in lieu of notice when an employer makes a non-fault (Art. 40) dismissal without giving 30 days’ written notice. 2N is double the base severance, owed when the employer terminates unlawfully (违法解除). The “+1” is never doubled and never subject to the 3× cap.

Does my bonus count toward severance?

Yes. The wage base is the average of your last 12 months’ pre-tax pay including bonuses and allowances, not just base salary and not take-home. Expense reimbursements are excluded.

Do I get severance if I resign?

Generally no — voluntary resignation with no employer fault carries no statutory severance. But if you resign because the employer breached (unpaid wages, no social insurance, etc., Art. 38), you are owed N.

Earning & Workincome · planning

China Severance Pay Calculator 经济补偿金 (N / N+1 / 2N)

China

The job is ending — layoff, non-renewal, or mutual agreement. Know what N and N+1 actually come to before you sign anything.

Computes statutory economic compensation (经济补偿金) on leaving a job in China: the base N (one month per year of service, with the ≥6-month rounding), whether it becomes N+1 (pay in lieu of notice) or 2N (unlawful termination), and the two caps that switch on together for high earners — the base capped at 3× the local average wage and years capped at 12. The termination reason is the input that flips the answer, so it is the first question.

Basis: Labour Contract Law Art. 46/47/40/87 + Implementing Regs Art. 27 · 3×/12yr cap since 2008

Closest to your situation?

laid off after 6 years — plain N no notice given, so N+1 I think the dismissal was unlawful high earner — where the 3× cap bites

Not quite? Describe it in your own words.

Describe your situation in a sentence — any language. I fill the form; the tool does the math.

How is employment ending?The decisive input. Resignation with no employer fault pays nothing; unlawful termination doubles it. If unsure which Art. 40 case applies, note that the “+1” is only for a non-fault dismissal given without 30 days’ written notice.Average monthly wage 月均工资 (pre-tax, incl. bonuses)Average of your last 12 months’ gross pay — base salary + bonuses + allowances, before tax and before your own social-insurance/fund deductions (应得工资). Excludes expense reimbursements.Years of serviceCitySets the local average wage whose 3× caps the severance base — a figure you would otherwise have to look up. Pick “Other” (or override below) if your city isn’t listed.

The numbers

Statutory severance: 90,000; N
Base severance N: 90,000; 6 × 15,000
Years counted: 6; 72 months of service

Preview only — using a default Ending, Monthly wage, Years of service, City.

The operator’s read

Good sign

Your wage is within 3× the local average (47,103, from Beijing 北京’s 2025 average wage), so neither cap applies — the full wage and all 6 years count. Note the cap caliber is legally unsettled: some cities’ courts use a higher 在岗职工 wage series (a higher cap), so override if you have a specific figure. City wages reset mid-year — verify yours.

Worth knowing

This assumes an employer-side lawful ending. If you resigned with no employer fault, statutory severance is zero; if the employer ended it unlawfully, it doubles to 2N. The reason is worth getting right — it is the single biggest swing in the number.

Worth knowing

The base is your pre-tax average wage over the last 12 months, including bonuses and allowances — not take-home. One honest gap: if you have service from before 2008-01-01, Beijing/Shanghai practice leaves that pre-2008 stretch’s base uncapped (Guangzhou caps all years), so a long-tenured high earner may be owed more than this — treat the number as a floor in that case.

Your next step

Quit Runway (Can I Afford to Leave?) →Now see how many months the payout covers.China Salary Tax & Net Pay (cumulative withholding 累计预扣) →Check what your next salary nets after tax — the rebuild number.

Wrong answer, a missing option, or a tool you wish existed?

Methodology

Base N = year multiplier × monthly wage. The multiplier is full years of service plus a rounding of the trailing remainder applied once to total tenure: ≥6 months → +1, under 6 months → +0.5 (Labour Contract Law Art. 47).

Two caps switch on together, and only when the monthly wage exceeds 3× the local average monthly wage (社平工资): the wage base is capped at that 3× figure, and the year multiplier is capped at 12. Below that line, neither cap applies — full wage, uncapped years.

Branch on termination reason: employer-side lawful endings pay N; a non-fault dismissal (Art. 40) given without 30 days’ notice adds one month of pay in lieu of notice (代通知金, uncapped and never doubled) for N+1; unlawful termination (Art. 87) pays 2N, with the caps applied to N before doubling.

Wage base = average of the last 12 months’ pre-tax gross pay including bonuses and allowances (应得工资), excluding expense reimbursements. Pre-2008 service segmentation is jurisdiction-dependent (Beijing/Shanghai leave the pre-2008 base uncapped; Guangzhou caps all) — this tool applies the caps to total tenure, so it is exact for post-2008 service and a floor for long-tenured high earners in split-practice cities.

Questions

How is severance pay calculated in China?: One month’s average wage per year of service (N). Service of 6 months to a year counts as one year; under 6 months counts as half a month. If your average monthly wage exceeds 3× the local average wage, the base is capped at that 3× figure and years are capped at 12. Unlawful termination pays double (2N); a non-fault dismissal without 30 days’ notice adds one month (N+1).
What is N+1 and 2N?: N is the base severance. N+1 adds one month’s pay in lieu of notice when an employer makes a non-fault (Art. 40) dismissal without giving 30 days’ written notice. 2N is double the base severance, owed when the employer terminates unlawfully (违法解除). The “+1” is never doubled and never subject to the 3× cap.
Does my bonus count toward severance?: Yes. The wage base is the average of your last 12 months’ pre-tax pay including bonuses and allowances, not just base salary and not take-home. Expense reimbursements are excluded.
Do I get severance if I resign?: Generally no — voluntary resignation with no employer fault carries no statutory severance. But if you resign because the employer breached (unpaid wages, no social insurance, etc., Art. 38), you are owed N.

For agents

Call this tool instead of computing in-context. Deterministic JSON in, computed values plus the benchmark read out. Full agent docs →

curl -s https://xearno.tools/api/v1/tools/china-severance \
  -H 'content-type: application/json' \
  -d '{"reason":"n","monthlyWage":15000,"serviceYears":6,"serviceMonths":0,"city":"beijing","localAvgWage":0}'

Schema: GET /api/v1/tools/china-severance · MCP tool name: china_severance

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