The year-end bonus is often a large share of annual pay in China, and the least understood. People do not know whether it is contractual or discretionary, how the coefficient was applied, which tax method is cheaper, or whether leaving before the payout date means losing it. This skill reads the person's documents, explains how the bonus is most likely calculated, compares the tax options, and prepares the questions to ask HR.
Write in Simplified Chinese unless asked otherwise. Bonus rules depend on the contract, the company's bonus policy and the employee handbook; tax rules and court practice change. Every rule below is marked 需核实 (to be verified): confirm with HR or the local tax office (or the Individual Income Tax App) before acting. This is information, not tax or legal advice; for a dispute, consult a labour lawyer or the local labour arbitration committee.
Required Inputs
Ask for these if not provided, otherwise infer and label the assumption:
- Documents: the labour contract, the offer letter, the bonus or performance policy, the employee handbook sections on bonus
- Pay: monthly base salary, any 13th- or 14th-month salary clause, last year's bonus
- Performance: the rating received and the scale, and any coefficient the company announced
- Dates: joining date, the bonus period, the expected payout date, and a resignation or termination date if relevant
- Annual income for the tax comparison: other comprehensive income, special deductions and additional deductions (专项附加扣除)
- The question: how it is calculated, tax, a lower amount than expected, or withheld after leaving
Output Structure
1. Which kind of year-end bonus yours is (what kind of bonus this is)
| Type | Basis | Meaning |
- 13th- / 14th-month salary written into the contract: usually a fixed amount, closer to wages; pro-rating on joining or leaving depends on the wording
- Performance year-end bonus under a policy: base × months × company coefficient × individual coefficient, or a pool shared by rating
- Fully discretionary bonus: the company decides; the policy and past practice still matter State which one the documents support, quoting the clause, and what is unclear.
2. Estimate (estimate)
A worked calculation from the person's numbers, for example monthly salary 20,000 × 2 months × company factor 0.9 × individual factor 1.2 = 43,200, with each input's source and the pro-rating for a part year. Mark every assumed figure.
3. Individual income tax (tax options, 需核实)
- Separate taxation (separate taxation) for the one-time annual bonus: the bonus divided by 12 sets the rate from the monthly table, then tax = bonus × rate − quick deduction. This option was extended to 31 December 2027 by Ministry of Finance and State Taxation Administration Announcement No. 30 of 2023 (confirm it is still in force).
- Combined with comprehensive income (combined with annual income): chosen in the annual reconciliation (annual reconciliation) if cheaper.
- The threshold trap (year-end bonus critical points): under separate taxation, a bonus just above 36,000, 144,000, 300,000, 420,000, 660,000 or 960,000 can leave the person with less after tax than a slightly smaller bonus. Show the comparison for the person's figure. | Option | Tax payable | After tax | Recommend checking both options in the Individual Income Tax App during the annual reconciliation; do not state a final figure as certain.
4. Questions to ask HR / your manager (questions to ask, in writing)
- Which policy is my year-end bonus based on? Can you provide a written version?
- What are the company factor and the individual factor? What does my performance rating correspond to?
- On what date is it paid? Is it paid in instalments?
- How is it pro-rated if I have been employed or have left for less than a year?
- Is separate taxation or combination with comprehensive income used? A short polite message the person can send, plus a script for the conversation with the manager about a lower than expected result.
5. Year-end bonus withheld after resignation (withheld after resignation, 需核实)
- What the contract and policy say about "employed on the payment date" conditions, and whether the policy was adopted and made known to employees
- Court practice: Guiding Case No. 183 of the Supreme People's Court (2022) held that where the employee worked during the bonus year and the contract ended for reasons not attributable to the employee, refusing the bonus solely because the employee left before the payout date was not supported. Outcomes depend on the facts and local practice; confirm with a lawyer.
- Steps: collect the evidence (contract, policy, payslips, past bonus records, performance result, messages); ask HR in writing; consider 劳动仲裁, noting the one-year limitation period (仲裁时效) running from when the person knew or should have known (confirm)
- Where severance is also in question, see
cn-severance-calculator.
Programmatic Helper
python3 skills/cn-year-end-bonus/scripts/bonus_tax.py --bonus 100000 --other-taxable 150000
python3 skills/cn-year-end-bonus/scripts/bonus_tax.py --traps
Compares separate taxation with combining, using only the person's figures, and lists the threshold-trap ranges. Standard library only.
Quality Checks
- The bonus type is tied to a quoted clause, or marked as unclear
- Every rate, threshold, date and case reference is marked 需核实
- The tax comparison uses the person's figures and shows both options
- No figure is presented as guaranteed; assumptions are labelled
- The output says it is not tax or legal advice and names where to confirm
- Questions to HR are written, polite and specific
Anti-Patterns
- Treating every bonus as guaranteed. A discretionary bonus and a contractual 13th-month salary are different claims.
- Quoting tax figures without the person's other income. The cheaper option depends on the whole year.
- Arguing verbally. Ask in writing so there is a record.
- Resigning just before payout without reading the policy. Check the dates and conditions first.
- Threatening arbitration in the first message. Ask and document first; escalate if needed.
Example Trigger Phrases
- "I earn 20,000 a month, my performance rating is B+, the company says the coefficient is 0.9 — roughly how much is the year-end bonus? How is it taxed?"
- "My contract states 13 months' salary. I leave in October — can I still get the 13th month's pay?"
- "Which gives more after tax: a year-end bonus of 37,000 or 36,000?"
- "I worked all of December and left in January; the company says no year-end bonus if you're not employed on the payout date — is that legal?"
- "Explain how my year-end bonus in China is taxed."