Bonus Disputes in China

Discretionary labels lose when the bonus was promised, formula-driven, or regularly paid.

Year-end bonuses, 13th-month pay and performance bonuses are a frequent arbitration item, especially on exit. If the contract or handbook sets a formula, or the company has paid the same bonus for years as part of remuneration, tribunals often treat it as wages. A clause that says ‘purely discretionary’ is weaker when targets were met and the employee was dismissed to avoid payment. Proration on resignation versus dismissal, and whether the person was in post on the payment date, should be written clearly and applied consistently.

The classification screen

4 questions before you choose the route.

This page identifies the right question and evidence. It does not determine the legal outcome on a reader’s facts.

Where is the bonus described?

Contract, handbook, offer letter, annual policy or only a manager email.

Source

Is there a formula or a true discretion?

KPI matrices look like wages; a board discretionary pool looks different.

Nature

What has the company actually paid in past years?

Practice can harden a ‘discretionary’ label.

Practice

Is this an exit fight?

Timing of dismissal versus bonus date is the usual allegation.

Exit

Working rule: Year-end bonuses, 13th-month pay and performance bonuses are a frequent arbitration item, especially on exit.

What changes the answer

The signal ledger.

These facts move the question beyond a label and into a product, money-flow and control analysis.

Signal

Ask the operating question

Why it changes the route

Targets met, bonus refused

Were KPIs achieved and still unpaid?

That is the core ‘it had become payable’ pattern.

Fired before payment date

Did termination land days before a customary year-end payout?

Motive and handbook timing clauses will be tested.

13th month

Is the 13th month in the contract as part of annual pay?

That is usually wages, not a gift.

Prepare before you escalate

Bring a compact evidence docket—not a pitch deck.

Give a compliance team or counsel the operating facts that reveal the perimeter.

01Bonus clause and policyAll versions in force for the relevant year.

02KPI and appraisalTargets, scores and manager comments.

03Past payoutsThree years of who got what, including leavers.

04Exit datesNotice, last day and the policy’s eligibility date.

Common confusions

Questions people ask before they build.

Short answers for orientation. The right result can change with the service model and current rules.

Can we say bonuses are not wages?

You can say it; a tribunal will still look at formula, regularity and the labor-contract wage definition. Many ‘discretionary’ bonuses are treated as wages on those facts.

Does resignation always forfeit the bonus?

Only if a lawful, publicised rule says so and it is applied even-handedly. A forfeiture aimed at one departing employee is fragile.

Primary authorities

Reviewed sources support orientation, not a fact-specific assessment.

National laws database (NPC)

PRC Labor Contract Law (gov.cn)

Ministry of Human Resources and Social Security

Supreme People’s Court