It is not legal to work for anyone other than the company listed on your work permit.  The chances of getting caught is minimal (though right now they are really cracking down on it), but if you do get caught, you will most likely be deported.

So you just have to ask yourself if it is worth it.

It appears to me they are much more strict on this in the larger cities, esp Shanghai and Beijing, tbh from what I have seen in the smaller cities, (small by Chinese standards), they don't really bother that much with strict enforcement of visa regulations so long as you're not too stupid, (although this is China things change).

The biggest problem is more likely to be your contract with your university, often they have an 'exclusivity' clause meaning you can only work for them, and often all lessons you prepare belong to them. Then it is down to how rigidly the University enforces that contract. If you 'poach' their students they'll notice, I guarantee, if you're careful you'll likely get away with it. But, as Xpat says, you have to consider if it's worth it.

There are a lot of misconceptions and wrong assumptions out there.  And maybe it is so because we are thinking from our experience and background, maybe not realizing that things could and are done different in another places. 

For example, in USA, if you are an immigrant, you will either get a work permit until you have your Green Card (resident visa), and that will allow you to work at different places without new authorizations, or have more than one job.

But in China, things are different.  First, your work visa ONLY allows you to enter China for the purpose of working, it does not allow you to work at all.  Once you enter China, and within 30 days of arrival, you will visit a few Government Offices.  You will need a health certificate issued by an approved institution at the location where you will work, finish (if not already done) the FEC, and at the Labor Bureau get your work permit, and at PSB get your residence permit.  And you better have your Registration Form of Temporary ADDRESS by Visitors issued by the closest Police Station to your place of residence before doing any of the above.  once you have all of that, they you can legally start to work, not before.

Second, in China, a work permit (and the residence permit) are both tied to your employer.  So, any work you do must be originated from your employer.  Any other work will not be covered by the work permit, and thus illegal and punishable by Law.  as a result, if your employer provides the students, or your tutor services, it is legal, but if you get them yourself, then it is illegal.  Following this line of thought, offer your employer a fix monthly fee from your extra services as payment from giving you the "information" about your extra students could be a way out.
I do know of many foreigners here that do teach privately without the proper visas or permits.  I do not know of any one so far suffering any consequences.  But all you will need is a disgruntle parent, or an upset neighbor to call the Police and get you in trouble.

So, until the existing crackdown fades away, I will suggest you do everything by the book, and take no chances at all. 

I wasnt aware universities could talk,sorry but I couldnt resist..In Chinese law no,but it wiill be 99.9999999 ok,if you have z visa,just say oh,i thought i could max fine would be 100 or 200 but mostly just a slight telling off

I had two part time jobs, and I didn't get in trouble. One of them was privately owned by a teacher, the other a training school in the city. However, it's best not to talk about it with anyone, and don't advertise it in anyway. I lived in a third tier city, and I think being discreet is enough for you not to get in trouble, but it might also depend on where you plan to work. The only reason I did that is because I had so few hours at the college, I was bored, and I felt like I wasn't working enough.

Penalties for working in China without proper documentation are not 100 or 200 Rmb and a slap on the wrist, In fact, at present time it could be a combination of three things, one a maximum of 10,000 Rmb fine, two from 3 to 10 days in jail, and three deportation and not allowed to return to China for at least 10 years.

For those interested in reading the source of this information, please go to ;

 "Rules Governing the implementation of the law of the People's Republic Of China on the Entry and Exit of Aliens " .  it shows clearly what the rules are.

and for those who do not wish to take the time, I copy below Chapter VII, Articles 40 thru 47, which deals with penalties.

But please note. About 45 days ago, the rules were changed, and the monetary penalties were doubled. So, when you see "up to 5000 yuan", now is up to 10,000 yuan and so forth.

Chapter  VII - Penalties

• Article 40 Aliens who illegally enter or exit China may be fined from 1000 to 10000 Yuan(RMB)or detained from 3 to 10 days and may simultaneously be ordered to leave the country within a specified time or expelled from the country.Those whose offences are serious enough to constitute a crime shall be prosecuted for criminal responsibility according to law.
• Article 42 Aliens who illegally stay in China in contravention of the provisions of Articles 16,19 and 20 of the present Rules may be served a warning,fined 500 Yuan per day for the period of his/her illegal stay in China with the total sum of fine not exceeding 5000 Yuan,or detained from 3 to 10 days.Those whose offences are serious may at the same time be ordered to leave the country within a specified time.
• Aliens who violate Article 21 and 22 of the present Rules may be served a warning,or fined up to 500 Yuan.and those whose of fences are serious may at the same time be ordered to leave the country within a specified time.
• Aliens who violate Article 23 Of the present Rules and fail to carry out the decision of the public security organs may, while being compelled to carry out the decision,be served a warning or fined from 1000 to 10000 Yuan.Those whose offenses are serious shall be ordered to leave the country within a specified time.
• Article 43 Aliens who,in contravention of the provisions of Articles 24 and 25 of the present Rules,fail to submit their residence certificates for examination as required or to carry their passports or residence certificates with them or refuse to produce their certificates to police for examination may be served a warning or fined up to 500 Yuan,and those whose offences are serious may at the same time be ordered to leave the country within a specified time.
• Article 44 Aliens who found employment without permission from the Ministry Labor of the People's Republic of China or its authorized departments shall have their posts or employment terminated and may at the same time be fined up to 1000 Yuan,and those whose offenses are serious may at the same time be ordered to leave the country within a specified time. Units and individuals who employ aliens without permission shall terminate employment of the said aliens and may at the same time be fined from 5000 to 50000 Yuan,and be ordered to cover all the expenses of repatriating aliens whom they had employed.
• Article 45 Whoever is held responsible for failing to register accommodation or report such registration to the public security organ,or for accommodating aliens without valid certificates in contravention Of the provisions Of Chapter IV of the present Rules may be served a warning or fined from 50 to 500 Yuan.
• Article 46 Aliens who travel to areas closed to aliens without prior permission in contravention of the provisions of Articles 34,and 37 of the present Rules may be served a warning or fined up to 500 Yuan,and those whose offenses are serious may at the same time be ordered to leave the country within a specified time.
• Article 47 Aliens who forge,alter,misuse,transfer,buy or sell visas or certificate shall have the said visas, certificates and illicit income revoked or confiscated and may be fined from 1000 to 10000 Yuan or detained from 3 to 10 days, and may at the same time be ordered to leave the country within a specified time, and those who's offenses are serious enough to constitute a crime shall be prosecuted for their criminal responsibility according to law.

So, in summary:

if you work illegally, you can get fined and be ordered to leave the country. I imagine it will be very hard to apply for a new visa to China after you were forced to leave once.

Mr chened123 :

Maybe we could both agree that while it is my right to reply to questions as I see fit, it is also your right to have an opinion about my "more ridiculously specific" answers, and / or pretending to be able to read my mind.  AND, if any of my answers bothers you, my apologies, I am sorry to hear that.

Lately, and as a result of a few posts challenging my statements by a few re-incarnated souls, I decided to be more specific with my answers, and instead of just listing facts, I am now listing facts and the sources of those facts.  With all my respects for "paulmartin", but saying here that if caught just "oh,i thought i could max fine would be 100 or 200 but mostly just a slight telling off" is a bit irresponsible in my eyes, especially with the existing crackdown going on.  And i do agree with Paul that many with a Z visa do also other private tutoring for extra income, and most of them get away with it.  But for myself, I decided to take no chances that could harm my stay in China, and my postings will reflect that clearly.

In a given situation, no two Chinese Officials will react the same way, so they are hard to predict, and the reason why you should always consider the worse of the consequences of your actions and decisions.  About 18 months ago, I was supposed to leave China lets say by May 15. 2011 (not the real date).  I assumed I had up to midnight to do so, but since I do not wait for the last minute, I took a bus from Guangzhou to the border at 9:10 am, and it was supposed to arrive at the border station 90 minutes later.  Due to a road accident of two cars and a truck, it took 3-1/2 hours to get to the border station.  Once there, and because it was during a national holiday, the waiting lines were very long, all the way out of the building and into part of parking lot.  It took me about 1-1/2 hours to get in front of Immigration Officer, who informed me to move aside since i had overstayed my visa using broken English.  They got another Officer who spoke good English who informed me that their computer said i had overstayed my visa.  I said no way, I showed him my passport, my entry stamp, counted the number of days allowed to stay, and came up that I had to leave China on May 15, 2011 , and today was May 15 and I was trying to leave, so I was not overstaying.  The Officer smiled, and pointed out that when i had entered China was 13:37 in the afternoon, and I had checked in at the booth at 14:10, and had overstayed my visa for 23 minutes.  To make a very long story short, I was taken to a room nearby, told to wait, an arm guard posted at the door, and about 4 hours later the same guy returned and told me that after consultation with higher ups it was decided that yes, I had overstayed my visa, but due to mitigating circumstances (they were aware of the traffic accident and long waiting lines), and the fact that it was only 23 minutes, no fines or letters of reprimand will be given, and I would be allowed to continue my trip.  But if in the next two years I overstayed my visa again, I would receive punishment for both instances. 

I learned my lesson then, I do pay attention to details, and do take precautions so if the unexpected occurs, I still have room to maneuver (like leaving the evening before due date, instead of the same day). 
 

This posting and the advice still applies today (March 2014) The laws pointed out may be different but more severe.

I don't suggest you do this in Nanjing. My friend was recently fined 5000 rmb for some part time work he did at a training school while he was working at a university. The university encouraged us (i worked there last year) to go out and find part-time work because our schedules had so much free time. However, when he got caught they wanted nothing to do with it and put the blame solely on him. 

The reason he go caught was mostly due to the fact that the woman running the school took all the money, closed the school and went to Canada. I still wouldn't do it though. 

Legally, the Uni. must give you written approval to do outside work but in practice they usually won't care and in smaller cities you are very unlikely to run into any difficulties. My Uni. contract specifically forbids outside work yet my boss at the Uni. is very well aware that I do outside work and in fact asked me to teach some of her friends' kids. She even asked me how much I get paid for my other outside work.

Now, if the Uni. is not satisfied you they can and will use the fact that you do outside work against you so make sure not to slack off at the Uni. job!