Direct answer

N = years × average monthly wage, then apply rounding, the 3×/12-year cap, and any +1 or 2N.

Step 1: confirm the exit article actually requires economic compensation. Step 2: service years — each full year is 1, six months or more counts as 1, under six months is 0.5. Step 3: average monthly wage is generally the payable wage over the 12 months before the exit, including bonuses that were wages, not only basic salary. Step 4: if that average is above three times the local prior-year average wage, cap the base at 3× and cap years at 12. Step 5: add one extra month if you are buying out Art. 40 notice (N+1). Step 6: if the dismissal is unlawful and the employee claims compensation instead of reinstatement, the figure is typically 2N, not N. City average-wage notices change every year.

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.

01

Is N due at all?

For-cause and many resignations pay zero statutory N.

Gate
02

What are the service years with rounding?

Start date, related-entity time, and the 0.5 / 1 rule.

Years
03

What is the 12-month average?

All payable wage items, then the 3× test.

Base
04

N, N+1, or 2N?

Notice buy-out versus unlawful-dismissal multiplier.

Multiplier

Working rule: Map the regulated role before marketing or launch in China.

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
Basic salary only
Did the average ignore a 13th month or regular bonus?
Under-base is the usual employee win on quantum.
Wrong city 3× figure
Did you use last year’s HQ city, not the workplace city?
The cap is local.
2N on a lawful N exit
Is the employee claiming double without an unlawfulness theory?
2N is not a negotiation default.
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.

01Service start and entity historyContracts and SI history across related companies.
0212-month payrollItemised payable wages used in the average.
03City average wage noticeThe published figure for the 3× cap.
04Exit articleWhy N versus N+1 versus 2N is the right multiplier.
Common confusions

Questions people ask before they build.

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

Is 8 months 15 days equal to 9 years of N?

No. Years of service are not the same as calendar math on the wage. 8 years 15 days is typically 8.5 units (the extra 15 days are under six months). Always apply the six-month rule to leftover months, not to a guess.

Where do I read whether N is due?

Use /china-severance-pay for when compensation is owed. This page is only how to compute it once the route is chosen.

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