In Chinese employment law, the monthly wage is defined as the average earnings per month for the last twelve months of work, and is used to calculate severance payment amounts. The monthly wage includes piece rate compensation, monthly salary, commissions, and allowances. If there is not enough data, the local minimum wage applies.

If the employee’s monthly wage is higher than triple the region’s monthly salary, then the monthly wage that applies for severance payment calculations is capped at triple the region’s salary.

Learn more about Chinese employment law at our FAQ here.