Based on the data of China Family Panel Studies 2016 (CFPS 2016), this study analyzed the effect of teacher wage index on students' participation in extracurricular tutoring through a two-layer linear model. We found that the wage index of elementary and middle schools teachers in China is generally low, and this index had a significant negative impact on students' participation in extracurricular tutoring, i.e., the lower the teacher's wage index, the higher the participation rate of students' extracurricular tutoring. Governments at all levels should increase financial investment in elementary and middle schools teachers' salaries. Efforts to improve the salary of elementary and middle schools teachers upon the teacher's wage index as a reference will help to reduce the supply and demand of extracurricular tutoring in the basic education in China, and will also facilitate the implementation of the policy of prohibiting in-service teachers from participating in extracurricular tutoring.