Money & workIdea 4 · 2 min read

Calculate statutory severance N: one month's wages per full year, half a month for less than six months

Grade A evidenceValue: Very high
In plain language

Chinese statutory severance generally gives one month's wage per completed service year, rounding 6–under 12 months to a year and less than 6 months to half a month. Use the preceding 12-month average including bonuses and allowances. For wages above three times the locality's preceding-year employee average, use that three-times cap and at most 12 service years.

MoneyNo cost
TimeQuick and easy
EffortLittle effort

What it takes

Free; about ten minutes with a calculator.

What you may gain

Labor Contract Law Article 47 sets the commonly called N calculation: one month per year, 6–under 12 months counted as one year, and under 6 months as half a month. High earners above three times the preceding year's local average monthly employee wage have both a three-times wage cap and a 12-year service cap.

Context & considerations

Monthly wages mean the average over the 12 months before termination, including bonuses, allowances and subsidies, not just basic salary. Omitting these is a common way to understate payment.

Research & references

NPC Standing Committee (2007). Labor Contract Law, effective January 1, 2008, Article 47. http://www.gov.cn/gongbao/content/2007/content_711013.htm