Why 15‑Month Salaries May Be a Mirage: Evaluating Base Pay vs. Year‑End Bonus

Background

In many Chinese tech firms the advertised “15‑month salary” consists of 12 months of regular salary plus a three‑month year‑end bonus.

Conditional nature of the bonus

The bonus is often tied to company, department and individual performance, and may be reduced or omitted.

Typical calculation

Nominal package = base × 15. Effective payout = base × 12 + base × 3 × (company factor) × (department factor) × (individual factor).

Example 1

Base 22k, nominal 22k×15 = 330k. If renegotiated to 25k×13, total becomes 325k, but monthly take‑home rises by 3k.

Example 2

Base 29k, nominal 29k×15 = 435k. With 80 % performance at all three levels, effective payout = 29k×12 + 29k×3×0.8×0.8×0.8 ≈ 392k.

Example 3

Base 32k, 12‑month salary plus a single month bonus at 90 % factor: 32k×12 + 32k×0.9×0.9×0.9 ≈ 407k, which can be more reliable than a higher nominal package that may be reduced to zero.

Implications for candidates

Prioritize the guaranteed monthly base salary.

Assess the realistic probability of receiving the full bonus.

In downturns, companies may cut or eliminate the bonus or lay off staff, making a higher base more valuable.

Common practice for high total compensation

When annual compensation exceeds ~50 w, firms often split salary into a regular portion and a year‑end bonus portion, allowing them to adjust the bonus based on financial results.

Recommendation

When comparing offers, select the one with the higher guaranteed base, and treat the “15‑month” figure with skepticism unless the bonus terms are clearly defined and likely to be paid in full.

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