Chinese Contract Splits Salary Into Base + Allowances — Why It Hurts You

The trap

A contract says ¥18,000/month but breaks down as ¥8,000 basic + ¥10,000 allowances. Schools may argue overtime and statutory payments should use ¥8,000. Even though the law says severance uses your average total wage, litigation to prove it is expensive.

What to do

Before signing, ask: 'Can the basic salary be the majority of the package?' Get the breakdown in writing. Confirm whether the figure is 税前 (before tax) or 税后 (after tax) — the difference can be 20–30%.

Negotiation line

'I'd like the base salary to reflect the majority of my package so that overtime and severance calculations are fair. Can we adjust the split?'

Key facts / law

• Severance (经济补偿) is calculated on average wage over 12 months, including allowances — but if the contract defines 'base' as the wage, disputes arise
• Overtime pay is calculated on your normal wage
• Social insurance base uses your actual wage, not the split components

Related guides

• Is a 3-Month Probation Legal in China? (2-Year Contract = Max 2 Months)
• Is a Non-Compete Clause in a Chinese Teaching Contract Valid?
• Can My Chinese Employer Charge a Resignation Penalty? (¥20,000 to Quit?)
• Social Insurance for Foreign Teachers in China: What Your Employer Must Pay
• My China Contract Is Only in Chinese — Should I Sign?
• Labor Arbitration in China for Foreigners: How It Actually Works

Also: see what teachers actually earn in China →